BA Midterm Misc.

Congress may tax activities and property that it might not be authorized to regulate under any of the enumerated regulated powers. True False

True

The sales of securities in the secondary market does not raise capital for the business whose stock is sold. True False

True

An advantage of operating as a sole proprietorship is that personal liability for any business losses is limited to the owner's investment in the business True False

False

Which of the following is not a major part of the Foreign Corrupt Practices Act? Requiring that corporations refrain from committing copyright violations abroad. Requiring that issuers registered with the Securities and Exchange Commission maintain a responsible internal accounting control system. Prohibiting bribery of foreign officials by American corporations. Requiring that corporations keep accurate records, books, and accounts.

Requiring that corporations refrain from committing copyright violations abroad.

The Revised Model Business Corporation Act provides that a self-dealing transaction is not a breach of the duty of loyalty if a majority of disinterested parties approve the transaction after disclosure of the conflict. True False

True

In 2002, Australia's highest court ruled on a defamation case in which an Australian citizen claimed to have been defamed by a Dow Jones article published on the defendant's website. The court found that the citizen was defamed and publication of the article occurred when the article appeared and could be read on a user's computer screen, establishing jurisdiction in Australia. But jurisdiction over Dow Jones couldn't be established because the defendant's servers were in America and the article had been uploaded in the United States, so it was considered published in the United States and not subject to Australian law. But jurisdiction over Dow Jones couldn't be established because the defendant had no physical presence in Australia. And jurisdiction over Dow Jones was established because under American law, the defendant's website was interactive and sufficiently established minimum contacts, creating jurisdiction.

and publication of the article occurred when the article appeared and could be read on a user's computer screen, establishing jurisdiction in Australia.

The Due Process Clause is found in the Fifth Amendment only. both the Fifth and Fourteenth Amendments. the Fourteenth Amendment only. neither the Fifth nor Fourteenth Amendment.

both the Fifth and Fourteenth Amendments.

Creation and internal governance of corporations is governed by common law. the Revised Model Business Corporation Act. federal laws. state laws.

federal laws.

The Sarbanes-Oxley Act imposed stricter regulations on how corporations do business through regulations in each of the following areas except corporate governance. auditing. tax compliance. financial reporting.

tax compliance.

Voting rights of LLC members are governed by the operating agreement. IRS regulations. the laws of the state in which the LLC is filed. the Uniform Limited Liability Company Act.

the operating agreement.

The management structure of a member-managed LLC is similar to that of a general partnership. True False

True

JR Winery grows grapes and produces wine in the state of Delaware. It purchases its corks from Cork Masters, a California cork importer. Despite a written contract, Cork Masters has informed JR Winery that it will immediately be raising the cost of corks 20 percent. JR Winery disputes the added charges and claims a breach of contract. Both companies agree that they want to resolve the dispute through binding arbitration. The arbitrator finds in favor of JR Winery. What, if anything, can Cork Masters do if it wants to dispute the arbitrator's decision? Have an expert evaluation conducted. It can ask JR Winery if it would agree to have the case reopened. File a court action under the Federal Arbitration Act because arbitration cannot be binding. Appeal the arbitrator's decision to a federal or state court.

??

General partnerships are pass-through entities regarding taxation; however, limited partnerships are not pass-through entities for taxes. True False

False

In National Football League Management Council v. Brady, the appellate court overturned the arbitrator's ruling because football player Tom Brady had not been provided adequate notice that suspension was within the League's range of punishments. True False

False

Laws requiring that the police show reasonable cause and obtain a search warrant before entering a place of business to search for evidence are examples of substantive laws. True False

False

Only two states provide liability protection to general partnerships in the form of a LLP. True False

False

The Supreme Court has held that agencies have very narrow discretion regarding when and whom to regulate. True False

False

A state's appellate court has made a decision in a particular case. That decision becomes case precedent in all cases except the cases heard in Federal Courts hearing cases in the state. the state's family and probate courts. the state's small-claims court. the state's trial court.

Federal Courts hearing cases in the state.

Which body of law governs the rules regarding the offering or trading of ownership interests in corporations? Common law. State law. The Revised Model Business Corporation Act. Federal law.

Federal law.

The Equal Protection Clause is contained in the Fifth Amendment. Sixth Amendment. Fourteenth Amendment. First Amendment.

Fourteenth Amendment.

In 2002, Martha Stewart, the media mogul and CEO of Martha Stewart Living, was prosecuted for insider trading regarding her sale of ImClone stock. Her stockbroker had informed her that Samuel Waksal, the CEO and chairman of ImClone, was selling substantial amounts of his stock in the company, so she then sold her ImClone holdings. What was Martha's fate? Since she "saved" only $45,000 by selling her stock, her dealings were deemed too insignificant and the matter was not pursued. She was found guilty of insider trading as a tippee and went to jail. She was found guilty of obstructing justice in a securities investigation and went to jail. She claimed that she was merely acting on her broker's advice and didn't know the information provided was material and nonpublic, so she didn't qualify as a tippee.

She was found guilty of obstructing justice in a securities investigation and went to jail.

Bronwyn sues her former employer for discrimination. Which of the following information is generally not discoverable during litigation? Bronwyn's personnel file. The employer's rules and policies. The notes of Bronwyn's attorney. E-mails between Bronwyn and her former supervisor.

The notes of Bronwyn's attorney.

How are the International Court of Justice's rulings enforced? Through monetary sanctions. There are no means to enforce the judgments. Through unilateral agreement by the parties before their case is heard. Through the U.N. Security Council.

There are no means to enforce the judgments.

If a limited partner actively participates in day-to-day management of the business, he or she may forfeit limited partner status and lose limited liability for debts and liabilities. True False

True

Most of the common law that regulated administrative law has been codified in the Administrative Procedures Act. True False

True

In Arizona v. the United States, the supreme Court ruled: immigration is within the purview of federal law and the existence of these laws preclude state action in this area. weak and uneven enforcement of federal immigration laws necessitated state regulation that did not conflict with federal law. Arizona had a right to pass laws requiring verification of citizenship based on the interest of public safety. The Supremacy clause allows states to enact laws the be enforced within the state.

immigration is within the purview of federal law and the existence of these laws preclude state action in this area.

Judicial review is the power of an appellate court to reverse a decision made in a lower court. power or right of a court to hear a case. power of a state or federal court to declare a statute unconstitutional. power of a federal court to declare a state or federal statute invalid if inconsistent with the Constitution.

power of a federal court to declare a state or federal statute invalid if inconsistent with the Constitution.