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I. Course Summary and Class Structure
This course generally will offer a basic introduction to business law, both for those with no exposure to business at all and for those with business background who need to understand how the law regulates structured economic activity. As a crucial prelude to our exploration of how corporations operate, we will examine how the law of agency regulates business actors doing business through their employee and non-employee representatives. Then, using a casebook with thoroughly modern cases and illustrations, we will explore how multiple business partners combine to do business using various legal forms. Brief introduction to partnerships will precede a deeper exploration of the formation and operation of corporations, especially the differing roles and powers of shareholders, officers, and directors. We will conclude with a brief comparison and contrast with the most modern business form, limited liability companies, and a discussion of business planning; i.e, how business owners and their lawyers might choose among the variety of available business forms. Along the way, we will become comfortable with a dizzying array of corporate business terms to ensure that each of us can comfortably converse about business matters in a variety of settings.
I intend to spend class time in a balance of lecture and dialogue with you about the statutes and cases that we will read and a series of problems that we will work through. I will try to limit the length of assignments, and you should be thoroughly prepared to discuss the materials assigned. My purpose in asking for class participation is not to make anyone uncomfortable, of course, but to continue to develop the skills of thinking on one's feet and clearly expressing legal thought orally. If, for whatever reason, you feel as though you are not able to participate effectively in class discussion, please let me know (with a note or quick comment) before class. You may excuse yourself from class discussion as often as necessary, but keep in mind 1) I will focus on those who have opted out of the previous class discussion in the next class meeting, and 2) your grade for this class may be affected by your performance in class discussion (see below in “Evaluation”).
II. Course Goals
One central purpose of this course is simply to acquaint those with no business background with the context in which business operates, to sensitize future lawyers to the mindset of business entrepreneurs and how that mindset often differs from (indeed, clashes with) that of lawyers. Beyond this, by the end of this course, you should be able to do the following:
apply agency and business associations law to determine a business entrepreneur-client's legal exposure to liability for the acts of others associated with the various forms of business, both in contract and in tort;
assess and advise a business client regarding the precise roles of partners, shareholders, directors, officers, and members of the various business entities and the formalities for how these actors take legally sufficient action with respect to their business entities;
evaluate the potential for legal action--in terms of both substantive and procedural elements--against partners, shareholders, officers, directors, and members for breaches of their duties with respect to each other and their business entities, especially fiduciary duties;
and ultimately, synthesize the creation and governance rules for the various business entities and explain to a business entrepreneur-client the general advantages and disadvantages of conducting business through a sole proprietorship, partnership, corporation, or LLC.
III. Required Materials
Eric A. Chiappinelli, Cases and Materials on Business Entities(3rd ed. 2014), Aspen, ISBN 978-1-4548-3767-1. We will not use a statutory supplement in this class; instead, I will refer you to online sources for statutes where the book does not contain the necessary excerpts (see the hyperlinked sections in "Assignments," below).
You will be evaluated primarily based on your performance on one final examination consisting of a series of essay, short answer, and multiple-choice problems (to increase the scope of material tested). You may bring with you and refer to during the exam anything that is neither alive nor disturbing to other students. Class participation is especially important to me, however, so I reserve the right to adjust your final grade up or down by as much as a full letter grade, though most likely no more than a + or - based on the quality (not necessarily quantity) of your contribution. You do not necessarily have to announce the "correct answer" immediately to receive an upward adjustment--concerted and reasoned efforts to grasp the materials, and especially voluntary and well-reasoned responses to questions posed in class, may lead to an upward adjustment. Extreme absenteeism, frequent requests to be excused from class discussion, and failure to be prepared for the next class after being excused from class discussion, will provide the basis for a downward adjustment.
One assignment per class meeting, 26 assignments over 13 weeks:
24. Limited Liability Companies (LLCs) Extract the relevant LLC rules by reading 823-28, 832-40, 844-46, 854-58, and apply the IL LLC Act to rework Partnership Review Problem (substitute "LLC" for "partnership" throughout and assume proper formation paperwork was filed) and work LLC Review Problems