NEW YORK LAW EXAM QUESTIONS
WITH COMPLETE SOLUTIONS
what is the business judgment rule - ANSWER -officers and director must perform their
duties in good faith and with the degree of care which an ordinarily prudent person in a
like position would use under similar circumstances and may rely on all
info/opinions/reports/statements (1) officers or employees present (2) counsel/public
accountants present (3) board committee presents
what happens if an LLC does not comply with publication requirements - ANSWER -
authority of LLC to conduct business within the state is suspended and the LLC is
unable in to maintain any action in its name. but does not preclude LLC from defending
actions brought against it/impair validity of contract or make member/manager liable for
LLC's obligations
who may form either professional service LLC with other professions - ANSWER -
professional engineering, architecture, landscape architecture, land surveying or
geology
what formation requirements to PLLCs have - ANSWER -same as those for LLC--fling
articles of org with Sec. of State with certain detailed info with proper publication and
operating agreement; also need certificates of authority for the licensed individuals
issued by the licensing authority
how does liability work for limited partners in LP - ANSWER -limited partners are not
personally liable for obligations of the partnership and may not participate in the
management of the limited partnership's business without potentially losing their limited
liability status with regard to persons who transact business with the limited partnership
reasonably believing that the limited partner is a general partner
what does due process require for agency adjudications - ANSWER -under NY and fed.
constitution--(1) short and plain statement of the matters asserted, (2) an opportunity for
a hearing within a reasonable time, (3) reasonable notice of such hearing, (4)
opportunity to present written argument on issues of law and evidence on issues of fact
(SAPA 301)
is mere assertion of a violation of a constitutional right alone enough to fit into the
exception for administrative exhaustion - ANSWER -no. if a constitutional claim hinges
on factual issues, the necessary record must be established at the administrative level
and if the underlying statute provides an exclusive administrative remedy, the futility and
irreparable injury exceptions do not apply
what are statutory exceptions for shareholder voting - ANSWER -(1) approval of an
amendment to the certificate of incorporation and authorization of a shareholders'
, petition for judicial dissolution requires the vote of a majority of all outstanding shares
entitled to vote
(2) approval of a merger or consolidation, approval of any sale, lease, exchange or
other disposition of all or substantially all of the assets of the corporation (not made in
regular course of business) requires (post 1998/in certificate) majority of votes
outstanding or (pre-1998) 2/3 of shares
what is a quorum for corporate business - ANSWER -majority of entire board unless
certificate/bylaws select something less but not less than 1/3 or more
how are officers removed - ANSWER -removed by board with or without cause; by
shared holders with or without cause if elected by shareholders but board can suspend
officer's authority
agency power to make rules - ANSWER -legislature may endow administrative
agencies with the power to fill in the gaps in the legislative product by prescribing rules
and regulations consistent with the enabling legislation
how specific must agency's power to make rules be? - ANSWER -There does not
need to be a specific and detailed legislative expression authorizing a particular
administrative
act, as long as (1) the basic policy decision has been articulated by the legislature, (2)
the administrative
rule or regulation is not inconsistent with the statutory language or its underlying
purpose, and
(3) the administrative agency is not engaging in broad-based policy determinations
Rulemaking requirements under State Administrative Procedure Act - ANSWER -(1)
submit notice of the proposed rule to the Secretary of State for Publication in the State
Register and (2) afford the public an opportunity to submit written comment
what must the notice under the SAPA include - ANSWER -(1) a statement of the
authority for the rule; (2) a complete text of the proposed rule or a description of the rule
and the website where the text is posted if too long, (3) a regulatory impact statement
and flexibility analysis and (4) the date, time, and place of any public hearings
when is a public hearing required under SAPA - ANSWER -not required before the
adoption of a rule unless a statute specifically requires a hearing
What must happen for a rule to be effective? - ANSWER -rule is not effective until it is
filed with the Secretary of State and the notice of adoption is published in the State
register
any exceptions for the process for rules to be effective? - ANSWER -if it is an
emergency rule or if it has a different statutory procedure
WITH COMPLETE SOLUTIONS
what is the business judgment rule - ANSWER -officers and director must perform their
duties in good faith and with the degree of care which an ordinarily prudent person in a
like position would use under similar circumstances and may rely on all
info/opinions/reports/statements (1) officers or employees present (2) counsel/public
accountants present (3) board committee presents
what happens if an LLC does not comply with publication requirements - ANSWER -
authority of LLC to conduct business within the state is suspended and the LLC is
unable in to maintain any action in its name. but does not preclude LLC from defending
actions brought against it/impair validity of contract or make member/manager liable for
LLC's obligations
who may form either professional service LLC with other professions - ANSWER -
professional engineering, architecture, landscape architecture, land surveying or
geology
what formation requirements to PLLCs have - ANSWER -same as those for LLC--fling
articles of org with Sec. of State with certain detailed info with proper publication and
operating agreement; also need certificates of authority for the licensed individuals
issued by the licensing authority
how does liability work for limited partners in LP - ANSWER -limited partners are not
personally liable for obligations of the partnership and may not participate in the
management of the limited partnership's business without potentially losing their limited
liability status with regard to persons who transact business with the limited partnership
reasonably believing that the limited partner is a general partner
what does due process require for agency adjudications - ANSWER -under NY and fed.
constitution--(1) short and plain statement of the matters asserted, (2) an opportunity for
a hearing within a reasonable time, (3) reasonable notice of such hearing, (4)
opportunity to present written argument on issues of law and evidence on issues of fact
(SAPA 301)
is mere assertion of a violation of a constitutional right alone enough to fit into the
exception for administrative exhaustion - ANSWER -no. if a constitutional claim hinges
on factual issues, the necessary record must be established at the administrative level
and if the underlying statute provides an exclusive administrative remedy, the futility and
irreparable injury exceptions do not apply
what are statutory exceptions for shareholder voting - ANSWER -(1) approval of an
amendment to the certificate of incorporation and authorization of a shareholders'
, petition for judicial dissolution requires the vote of a majority of all outstanding shares
entitled to vote
(2) approval of a merger or consolidation, approval of any sale, lease, exchange or
other disposition of all or substantially all of the assets of the corporation (not made in
regular course of business) requires (post 1998/in certificate) majority of votes
outstanding or (pre-1998) 2/3 of shares
what is a quorum for corporate business - ANSWER -majority of entire board unless
certificate/bylaws select something less but not less than 1/3 or more
how are officers removed - ANSWER -removed by board with or without cause; by
shared holders with or without cause if elected by shareholders but board can suspend
officer's authority
agency power to make rules - ANSWER -legislature may endow administrative
agencies with the power to fill in the gaps in the legislative product by prescribing rules
and regulations consistent with the enabling legislation
how specific must agency's power to make rules be? - ANSWER -There does not
need to be a specific and detailed legislative expression authorizing a particular
administrative
act, as long as (1) the basic policy decision has been articulated by the legislature, (2)
the administrative
rule or regulation is not inconsistent with the statutory language or its underlying
purpose, and
(3) the administrative agency is not engaging in broad-based policy determinations
Rulemaking requirements under State Administrative Procedure Act - ANSWER -(1)
submit notice of the proposed rule to the Secretary of State for Publication in the State
Register and (2) afford the public an opportunity to submit written comment
what must the notice under the SAPA include - ANSWER -(1) a statement of the
authority for the rule; (2) a complete text of the proposed rule or a description of the rule
and the website where the text is posted if too long, (3) a regulatory impact statement
and flexibility analysis and (4) the date, time, and place of any public hearings
when is a public hearing required under SAPA - ANSWER -not required before the
adoption of a rule unless a statute specifically requires a hearing
What must happen for a rule to be effective? - ANSWER -rule is not effective until it is
filed with the Secretary of State and the notice of adoption is published in the State
register
any exceptions for the process for rules to be effective? - ANSWER -if it is an
emergency rule or if it has a different statutory procedure
