B-law module 6

Ben incorporates his app products business as Clickology, Inc. Under most state corporation statutes, Clickology can have​ a.perpetual existence.​ b.only a one-year, nonrenewable existence.​ c.​only a finite, yet-to-be-determined existence. d.only a one-year, renewable existence.​

a

Bread & Brews, Inc., files its articles of incorporation with the appropriate government agency. Least likely to appear in the articles is the name of a.each of the corporation's shareholders.​ b.​each of the corporation's incorporators. c.the corporation's initial registered agent.​ d.the corporation.​

a

Custom Auto Body & Detailing, LLC, is a limited liability company. Its members include Dennis and Estelle. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as​ a.a partnership. b.a corporation. c.a proprietorship. d.a person.

a

Deepwater Dredging Company holds itself out to others as being a corporation but makes no attempt to incorporate. Estuary Marina signs a contract with Deepwater and Deepwater fails to perform. Estuary Marina files a suit against the firm. The court will likely hold that Deepwater is a.a corporation by estoppel. b.ultra vires. c.an S corporation. d.an alien corporation.

a

Farrah and Grant are shareholders of Hong Kong Restaurants, Inc. As shareholders, they must approve​ a.​conducting a merger. b.negotiating a contract between management and labor.​ c.​none of the choices. d.deciding to pursue new business opportunities.​

a

GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by a.shares of stock. b.trust certificates. c.title documents. d.partnership certificates.

a

Hudson and Ilsa want to market a new line of kayaks and related gear under the brand name Journeys as a corporation—Journeys Inc. To avoid income taxes at the corporate level, they should form a.an S corporation. b.a private corporation. c.an alien corporation. d.a C corporation.

a

Ida, Jerzy, and Kit are the directors of Liberty Convenience Stores, Inc. Liberty has nine officers and forty-six shareholders. Dividends are ordered by the firm's a.​board of directors. b.majority shareholders.​ c.officers.​ d.minority shareholders.​

a

Jeremy is considering forms of business organizations, including the limited liability company (LLC), for his concessions business—Kettle Popt-Korn. Most states require that an LLC have a.at least one non-member manager. b.at least two members. c.at least one member. d.an alter ego, but no minimum number of participants.

a

Lebron, Michael, Nolan, and O'Neill combine to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as a.a syndicate. b.a business trust. c.a joint stock company. d.a joint venture.

a

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management a.to any extent. b.to no extent. c.only to the extent that she assumes liability for the venture's debts. d.only to the extent of her investment in the venture.

a

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to a.partnerships. b.corporations. c.cooperatives. d.business trusts.

a

Romero is a member of Smooth Operators LLC, a limousine service. Romero's relationship to Smooth Operators ends, but the firm continues to do business. This is a.dissociation. b.dissolution. c.wrongful but not a violation of the law. d.a violation of the law.

a

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, decisions are made according to a.majority vote. b.members' seniority. c.the number of members. d.participation in management.

a

Aviators Source Corporation makes and sells aircraft parts. In most states, the minimum number of directors that must be present before Aviators Source's board could transact its business is a.all of the directors authorized in the articles or bylaws. b.a majority of the board of directors. c.any odd number. d.one.

b

Bea is a shareholder of Chocolate Confections Corporation. The right to inspect corporate books and records is a.held by Bea, without restrictions.​ b.held by Bea, with some restrictions.​ c.not held by Bea.​ d.​held by Bea only if she is a director.

b

David wants to go into business as Explosive Bursts to make and market fireworks. When deciding which form of business organization would be most appropriate, David would normally take into account all of the following except a.tax considerations.​ b.the forms of competitors' business organizations.​ c.the need for capital.​ d.​the liability of the owners.

b

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages and owns the property and distributes the profits to Global Shipping and Harbor Warehouse. This form of a business organization is a.a syndicate. b.a business trust. c.a joint stock company. d.a joint venture.

b

In a manager-managed LLC, the company is managed by a.all of the LLC's members. b.those designated by the members. c.the LLC's majority owners. d.the LLC's CEO.

b

Jeri and Knute are members of Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours's liabilities, as members, Jeri and Knute are shielded from a.all liability b.personal liability. c."alter ego" liability. d.no liability.

b

Outreach Security & Rescue, LLC, is a limited liability company. Under most LLC statutes, unless the members have agreed otherwise, participants in the firm's management will be considered to include a.one member. b.all members. c.no member. d.one non-member manager.

b

Rural Residential Development Company and Suburban Real Estate Corporation form a joint stock company. The longest duration a joint stock company can be formed for is a.a single activity or transaction. b.a perpetual existence. c.a stated duration of not more than one year. d.an implied duration of not more than six months.

b

Speculative Business Corporation can be compelled to dissolve by a.dissatisfied clients and customers.​ b.a court order.​ c.its competitors.​ d.​any of the choices.

b

Transworld Import Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This organization is a.a joint venture. b.a joint stock company. c.a business trust. d.a syndicate.

b

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts a.in proportion to her profit derived from the company. b.to the full extent. c.to the extent of her investment in the company. d.in proportion to the total number of members.

c

Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is a.a natural person. b.a tangible thing. c.an artificial person. d.a visible radiance.

c

Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to a.obtain an exemption from state laws governing corporations. b.avoid personal liability for the acts of the cooperative. c.pool their resources to gain an advantage in the marketplace. d.pay no taxes on their business income.

c

Lauren, Marcella, and Norell form a syndicate to buy a professional soccer franchise. This syndicate could be set up as a.a limited liability company. b.a sole proprietorship. c.a corporation. d.a joint venture.

c

Licensed fishing outfits in Bayou City form a business organization to provide an economic service to its members. This is a.a business trust. b.a joint stock company. c.a cooperative. d.a corporation.

c

Oil Reserves, Inc., and Petro Refining Corporation form a joint venture to design and test petroleum storage facilities and equipment. When a dispute arises, Oil files a suit against Petro. The court is most likely to apply the same principles to this joint venture as it applies to a.sole proprietorships. b.limited liability companies. c.partnerships. d.corporations.

c

Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf. Refer to Fact Pattern 29-1. Any damages recovered by Ray's suit will go to a.​Ray. b.the state in which SBC is incorporated.​ c.SBC.​ d.SBC's directors.​

c

Rob owns Solar Fuel Corporation. Rob uses Solar Fuel's funds to pay his personal expenses, creates Thermal Power Corporation to engage in the same business as Solar Fuel, transfers Solar Fuel's assets to Thermal Power, and petitions Solar Fuel into bankruptcy. This most likely warrants​ a.​a bonus to Rob for financial maneuvers. b.a review of Thermal Power's articles of incorporation.​ c.​a pierce of the corporate veil. d.a discharge for Solar Fuel in bankruptcy.​

c

Shannon is an officer for Turista Shirts Corporation. Due to a bad business decision, made on a reasonable basis, on Shannon's part, the company's sales decrease. Shannon is most likely liable for breach of a.the duty of care. b.the duty of loyalty. c.none of the choices. d.the business judgment rule.

c

A firm named Biometric Research Corporation makes an attempt to incorporate for a purpose other than making a profit. Biometric is​ a.an alien corporation. ​b.not a corporation.​ c.​a foreign corporation. d.a nonprofit corporation.​

d

Arnie is a member of Bowling & Billiards, LLC. Arnie can participate in the firm's management a.to no extent. b.only to the extent of his investment in the firm. c.only to the extent that he assumes liability for the firm's debts. d.to any extent.

d

As the trustee of a business trust, Bertoldi is required to a.assume responsibility for the trust's debts. b.none of the choices. c.draft a written trust agreement. d.distribute the trust's profits.

d

Bret and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with Delite's​ a.shareholders.​ b.officers.​ c.incorporators.​ d.​board of directors.

d

Dante and Eden want to form and do business as Farm-to-Fork Restaurant Corporation. Its existence depends generally on​ a.​the federal Administrative Procedure Act. b.​city or county corporate codes. c.state law.​ d.​the Entrepreneur's Corporate Handbook.

d

Doris wants to go into business as eBeats to market a new fitness app. Organizational fees are required to form all of the following business organizations except ormal' except​ a.a limited liability company.​ b.a limited partnership.​ c.a corporation.​ d.​a sole proprietorship.

d

Fact Pattern 29-1 Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf. Refer to Fact Pattern 29-1. Any damages recovered by Ray's suit will go to a.SBC's directors.​ b.the state in which SBC is incorporated.​ c.​Ray. d.SBC.​

d

Medical Professionals Supply Source is an unincorporated cooperative. Unincorporated cooperatives are often treated like a.joint stock companies. b.corporations. c.business trusts. d.partnerships.

d

Miracle Mobile Devices, Inc., is a private, for-profit corporation that is owned by five shareholders who are members of the same family. Miracle is a.none of the choices. b.a nonprofit corporation. c.a publicly traded corporation. d.a close corporation.

d

Nora is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nora's decisions must be informed and a.perfect. b.unquestionable. c.indefensible. d.made after reasonable investigation.

d