Uniform Bar Examination (UBE) Business Associations, Trusts, and Estates Syllabus

Business Associations, Trusts, and Estates syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Business Associations, Trusts, and Estates in Uniform Bar Examination (UBE), not a summary of it.

1. 1

   Agency and Partnership

   3 topics

   • Agency Relationships
     • Creation and types of authority (actual and apparent)
     • Principal and agent duties
     • Liability of principal in contract and tort
   • General Partnerships
     • Formation and the RUPA framework
     • Partner rights, duties, and management
     • Liability to third parties
     • Dissociation and dissolution
   • Limited Partnerships and LLCs
     • Limited partnerships and limited liability
     • Limited liability companies: formation and management
2. 2

   Corporations

   3 topics

   • Formation and Structure
     • Incorporation and de facto corporations
     • Promoters and pre-incorporation contracts
     • Piercing the corporate veil
   • Governance and Fiduciary Duties
     • Roles of directors, officers, and shareholders
     • Duty of care and the business judgment rule
     • Duty of loyalty and conflicts of interest
     • Shareholder voting and derivative suits
   • Corporate Finance and Fundamental Changes
     • Stock issuance, dividends, and distributions
     • Mergers, acquisitions, and dissolution
     • Securities liability (Rule 10b-5 and Section 16(b))
3. 3

   Trusts and Charitable Gifts

   3 topics

   • Creation of Trusts
     • Elements of a valid trust
     • Express, charitable, and resulting/constructive trusts
     • Pour-over trusts
   • Trust Administration
     • Trustee powers and fiduciary duties
     • Allocation of principal and income
     • Beneficiary rights and spendthrift provisions
   • Modification and Termination
     • Modification by settlor and beneficiaries
     • Cy pres doctrine
     • Termination of trusts
4. 4

   Wills and Estates

   4 topics

   • Intestate Succession
     • Distribution to spouse and descendants
     • Per stirpes and per capita distribution
     • Advancements and disclaimers
   • Execution and Validity of Wills
     • Formalities and attestation
     • Holographic and nuncupative wills
     • Capacity, undue influence, and fraud
   • Will Components and Changes
     • Revocation, revival, and dependent relative revocation
     • Integration, incorporation, and codicils
     • Lapse and anti-lapse statutes
     • Ademption and abatement
   • Protection of Family and Construction
     • Spousal elective share and pretermitted heirs
     • Will contests and construction issues

Business Associations, Trusts, and Estates flashcards for Uniform Bar Examination (UBE)

24 of 51 cards from the Business Associations, Trusts, and Estates deck — real questions with worked answers.

1. What are the three ways actual or apparent authority can arise for an agent to bind a principal, plus the catch-all doctrine?

   Actual express authority (principal's words to agent), actual implied authority (reasonably necessary to carry out express authority or based on prior dealings/custom), apparent authority (principal's manifestations to a third party), and ratification (principal affirms an unauthorized act). Estoppel and inherent authority are additional catch-alls.

2. In agency law, when is a principal vicariously liable for an agent's tort under respondeat superior?

   When the tortfeasor is an employee (not an independent contractor) and was acting within the scope of employment. Intentional torts are generally outside scope unless the conduct was authorized, natural to the work (e.g., bouncer), or motivated to serve the principal.

3. What duties does an agent owe the principal, and what is the principal's chief duty in return?

   Agent owes fiduciary duties of loyalty (no self-dealing, no usurping opportunities, no secret profits), obedience, and care, plus duties to account and disclose. The principal must compensate the agent and indemnify/reimburse the agent for authorized expenses and losses.

4. In a contract made by an agent, when is the agent personally liable to the third party based on disclosure of the principal?

   Disclosed principal: agent not liable (only principal bound). Partially disclosed (unidentified) principal: both agent and principal liable. Undisclosed principal: both agent and principal liable, and the third party may hold either once the principal is discovered.

5. How is a general partnership formed, and what is the key statutory presumption regarding profit-sharing?

   A partnership is formed when two or more persons associate to carry on as co-owners a business for profit, with no formal filing required. Sharing of profits raises a presumption of partnership (unless the share is payment of a debt, wages, rent, etc.).

6. What is the liability of general partners for partnership obligations under RUPA?

   General partners are jointly and severally liable for all partnership obligations (contract and tort). A creditor must generally exhaust partnership assets first before reaching individual partner assets, and an incoming partner is not personally liable for debts arising before joining.

7. Absent an agreement, how are profits, losses, and management rights allocated among general partners under RUPA?

   Profits are shared equally regardless of capital contributions; losses follow profits (also equal). Each partner has equal rights in management, and ordinary business decisions are by majority while extraordinary matters require unanimous consent.

8. What fiduciary duties do general partners owe, and to whom?

   Partners owe duties of loyalty (account for profits, refrain from competing and self-dealing) and care (no grossly negligent/reckless or intentional misconduct) to the partnership and the other partners, plus an obligation of good faith and fair dealing.

9. Distinguish dissociation from dissolution in a general partnership under RUPA.

   Dissociation is a single partner ceasing to be associated (e.g., withdrawal, death, expulsion); the partnership may continue and buy out the dissociated partner's interest. Dissolution is the winding up and termination of the entire partnership business.

10. What distinguishes general partners from limited partners in a limited partnership, including liability and filing requirements?

    A limited partnership requires a filed certificate and has at least one general partner (full personal liability, manages) and at least one limited partner (liability limited to contribution, generally no management control). Under RULPA/ULPA 2001 limited partners may participate without losing limited liability.

11. What is the defining liability and management feature of an LLC, and how is it formed?

    An LLC is formed by filing articles of organization. All members enjoy limited liability (liable only up to their investment) while obtaining pass-through (partnership) tax treatment. It can be member-managed (default) or manager-managed.

12. How are profits/losses and management allocated in an LLC absent an operating agreement, under the RULLCA default?

    Under RULLCA, profits and losses are allocated per capita (equally among members), not by contribution. Management is member-managed by default, with ordinary matters decided by majority and extraordinary matters requiring unanimous consent.

13. What is an LLP and what does its liability shield protect partners from?

    A limited liability partnership is a general partnership that files a statement of qualification. The LLP shield protects each partner from personal liability for the partnership's obligations, including the malpractice/torts of other partners, though a partner remains liable for their own wrongful acts.

14. What are the steps to validly form a corporation, and what entity results from substantial but imperfect compliance?

    File articles of incorporation (incorporators, name, registered agent, authorized shares) with the state and appoint initial directors. Substantial good-faith compliance yields a de jure corporation; good-faith but defective attempts may create a de facto corporation or corporation by estoppel.

15. What is a promoter's liability on pre-incorporation contracts, and when is the corporation bound?

    A promoter is personally liable on pre-incorporation contracts and remains liable even after incorporation unless there is a novation. The corporation becomes liable only if it expressly or impliedly adopts/ratifies the contract after formation.

16. When will a court pierce the corporate veil to hold shareholders personally liable?

    When the corporation is the alter ego of the shareholders (ignoring corporate formalities, commingling funds), is undercapitalized, or is used to perpetrate fraud or injustice. Piercing is more readily applied to tort creditors and closely held corporations than in the contract context.

17. What is the difference between authorized, issued, and outstanding shares?

    Authorized shares are the maximum number the articles permit the corporation to issue. Issued shares are those actually sold/distributed. Outstanding shares are issued shares currently held by shareholders (issued minus treasury/reacquired shares).

18. State the duty of care for corporate directors and the protection of the business judgment rule.

    Directors must act in good faith with the care of an ordinarily prudent person in like circumstances. The business judgment rule presumes directors acted on an informed basis, in good faith, and in the corporation's best interest, shielding decisions absent fraud, illegality, or conflict of interest.

19. What is a director's duty of loyalty, and how can a conflicting-interest (self-dealing) transaction be upheld?

    Directors must act in the corporation's best interest, not their own. A self-dealing transaction is valid if (1) disclosed and approved by disinterested directors, (2) disclosed and approved by disinterested shareholders, or (3) the transaction was fair to the corporation when entered.

20. Under the corporate opportunity doctrine, when may a director or officer take a business opportunity for themselves?

    Only after first presenting it to the corporation and the corporation rejecting it. An opportunity belongs to the corporation if it is in the company's line of business or one the corporation has an interest/expectancy in. Taking it without disclosure breaches the duty of loyalty.

21. What is required to maintain a shareholder derivative suit, and how does it differ from a direct suit?

    A derivative suit enforces the corporation's rights: the plaintiff must have owned stock at the time of the wrong (contemporaneous ownership), make a demand on the board (or show futility), and recovery goes to the corporation. A direct suit enforces the shareholder's own rights and recovery goes to the shareholder.

22. What corporate actions are classified as fundamental changes requiring board approval plus a shareholder vote?

    Mergers, consolidations, share exchanges, sale of substantially all assets outside the ordinary course, conversions, dissolution, and amendments to the articles. These require board resolution plus shareholder approval (commonly a majority of shares entitled to vote under the MBCA).

23. What are dissenters' (appraisal) rights and when do they apply?

    Appraisal rights allow a shareholder who objects to certain fundamental changes (e.g., merger, share exchange, sale of substantially all assets) to compel the corporation to buy their shares at fair value. The shareholder must object before the vote, not vote in favor, and demand payment.

24. What are the four elements required to create a valid private express trust?

    (1) A settlor with capacity and intent to create a trust, (2) a trustee (court will appoint one if missing), (3) ascertainable beneficiaries, and (4) trust property (res). A valid trust purpose is also required, and the trust must usually be funded.

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