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Termination of an Agency
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Lee Hoffoss
Agency & Partnership Outline
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Employer a principal who employs an agent to perform service in his affairs and who controls
or has the right to control the physical conduct of the other in the performance of the service.
Employee an agent employed by a master to perform services in his affairs whose physical
conduct in the performance of the service is controlled or is subject to the right of control by the
employer (master).
Independent Contractor a person who contracts with another to do something for him but who
is not controlled by the other nor subject to the others right to control with respect to his
physical conduct in the performance of the undertaking. He may or may not be an agent.
Determinative Factors for Employees and Independent Contractors
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Extent of control the master may exercise over the details of the work
Whether the one employed is engaged in a distinct occupation or business
Whether the employer or workman supplies the tools
Length of time for which the person is employed
The skill required in the particular occupation
Whether the work is a part of the regular business of the employer
Method of payment, whether by the job or by the hour
Whether the principal is or is not in business
WORKERS COMPENSATION
Employees of contractor
Engaged to perform work that is part of the principals trade
3 Wicked Sisters
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Lee Hoffoss
Agency & Partnership Outline
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TRADE SECRETS
Trade Secret may consist of any formula, pattern, device, or compilation of information which
is used in ones business, and which gives him an opportunity to obtain an advantage over
competitors who do not know or use it.
Secrecy need not be absolute and the owner of the secret needs only to take reasonable
precautions to ensure that it would be difficult for others to discover the secret without using
improper means.
One does not need a covenant not to compete to keep trade secrets from being disclosed.
Liability of Disclosing a Trade Secret
One is liable to the other if:
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He discovered the secret by improper means
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His disclosure or use constitutes a breach of confidence reposed in him by the other
disclosing the secret to him
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He learned the secret from a third person with notice of facts that it was a secret and
that the third person discovered it by improper means or that the third persons
disclosure of it was otherwise a breach of his duty to the other
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He learned the secret with notice of the facts that it was a secret and that its disclosure
was made to him by mistake.
Trade secrets are not patented. Matters of general knowledge in an industry cannot be
appropriated by one as a trade secret.
NON-COMPETITION COVENANTS
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Easiest form of business. The only caveat is unlimited liability as to the owner.
Can use any name that one desires to be known as, but must file a Trade Name Affidavit with the
Clerk of Court in the parish of operation. This will allow the creditors to be put on notice as to
who is responsible for the debts.
Lee Hoffoss
Agency & Partnership Outline
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GENERAL PARTNERSHIP
Definition / Elements
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Name Usage
One can use any name with or without partners names in it. Can use a fictitious name, but have
to file a Trade Name Affidavit with the Parish Clerk of Court. If no name is adopted, then the
business must be conducted in the name of all the partners.
Immovable Property
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If the contract of partnership was in writing and recorded with the Secretary of State
at the time when immovable property is acquired by the partnership, then the property
is owned by the partnership and it is effective towards third parties.
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If the partnership was in writing, but not recorded with the Secretary of State, then the
partnership still owns the property, but not effective towards third parties.
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If the partnership was not in writing on the date of the acquisition, then the property is
owned by the individual partners. In order to put it in the partnership name, the
partners would have to place the partnership in writing and then transfer the property
by a separate act.
Lee Hoffoss
Agency & Partnership Outline
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A majority must agree to decisions affecting the management or operation of the partnership
unless otherwise stipulated in the partnership agreement.
Termination of a Partnership
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When a partnership terminates, the business ends except for purposes of liquidation. The
authority of the partners is also terminated except for liquidating the partnership. If a third
person is not aware that the partnership is terminated and acts in good faith with one of the
partners, then the partnership is liable for that act. If the partnership is terminated because it
goes to one member, then that person is not bound to liquidate the partnership and can continue it
as a sole proprietorship.
Division of Partnership / Paying of Creditors
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Definition / Elements
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Lee Hoffoss
Agency & Partnership Outline
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If a Limited Partner allows their name to be used in the name of the partnership, he/she assumes
liability as a general partner.
A limited partnership or partnership in commendam must be in writing and filed with the
Secretary of States office.
Until the appropriate paperwork is filed, the partnership is a general partnership and the limited
partner assumes the same liability as does the general partner.
LIMITED LIABILITY PARTNERSHIP (LLP)
Definition / Elements
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Add-on feature
To a general or limited partnership
Limits liability in torts only to partners
Lee Hoffoss
Agency & Partnership Outline
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Partners in an LLP must be natural persons (no juridical persons such as corporations)
LIMITED LIABILITY COMPANY (LLC)
Definition / Elements
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Must file articles of organization and initial report with the Secretary of State, but does not have
to include an operating agreement.
LLC can have one member and has perpetual existence even after the death of one of the
members.
Must have a majority vote of the members to pass or approve things.
Articles of Organization can either limit or eliminate liability, but not with fraud or unfair
financial gain. Members and managers are not individually liable for debts of the LLC.
Dissolution of an LLC
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Lee Hoffoss
Agency & Partnership Outline
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Upon dissolution, must file articles of dissolution with Secretary of State that are signed by one
or more managers. Certificate of dissolution must be signed by one or more of the members
stating that the company has been liquidated.