Business Entities Flashcards
6 cards from real FL BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Business Entities flashcards as text
A limited partner in a Florida limited partnership risks losing limited liability protection if they:
Answer: Actively participate in control of the partnership's business
Under FLPA, a limited partner who participates in the control of the limited partnership's business may be held liable to third parties who reasonably believed the limited partner was a general partner.
When a corporation is merged into another, the surviving corporation automatically:
Answer: Acquires all assets and assumes all liabilities of the merged entity by operation of law
In a statutory merger under Florida law, the surviving entity automatically acquires all property, rights, and liabilities of the merged entity by operation of law — no assignment is needed.
A promoter who contracts on behalf of a corporation not yet formed is personally liable on those contracts unless:
Answer: The other party agrees to look only to the corporation and releases the promoter (novation)
A promoter remains liable on pre-incorporation contracts even after the corporation adopts them — release of the promoter requires a novation where the other party expressly agrees to substitute the corporation for the promoter.
Under Florida's Revised Limited Liability Company Act, an LLC's operating agreement may NOT:
Answer: Eliminate fiduciary duties of loyalty entirely
Florida § 605.0105 permits the operating agreement to modify or restrict fiduciary duties but not eliminate them entirely — good faith and fair dealing obligations cannot be waived.
A shareholder derivative suit is brought by a shareholder to enforce a right belonging to:
Answer: The corporation
A derivative suit is filed by a shareholder on behalf of the corporation to enforce the corporation's own cause of action — any recovery goes to the corporation, not the suing shareholder.
Under Florida law, the duty of an officer or director of a nonprofit corporation is governed by a standard that generally requires:
Answer: Acting in good faith and in a manner reasonably believed to be in the organization's best interests
Florida § 617.0830 applies the same business judgment rule framework to nonprofit directors — good faith, reasonable belief the action is in the organization's best interest, and appropriate care.