BUL3310 Test 4
Subchapter S corporations may have a maximum of 100 shareholders.
False
A business organized as a proprietorship may have up to, but not more than, thirty-five owners.
false
A corporation can be in existence for a maximum of ninety-nine years.
false
A corporation incorporated in Delaware and doing business in New Jersey is not a foreign corporation in New Jersey.
false
A creditor must exhaust his or her judicial remedies against the principal before seeking to recover from the surety.
false
A disadvantage of the Limited Liability Company is that profits are taxed both as income to the corporation and as dividends to the members.
false
A doctor who practices as part of a professional association cannot be sued for malpractice.
false
A joint venture cannot sue or be sued.
false
A lien for the value of materials and labor used in the construction or improvement of real property is an artisan's lien.
false
A limited partnership has to have at least two general partners and at least one limited partner
false
A partnership is a taxable entity.
false
An artisan's lien is always assignable.
false
An incoming partner has unlimited personal liability for the already existing debts of the partnership.
false
Bonding companies are usually uncompensated sureties.
false
Compared to other business entities, a general partnership requires filing complex documentation with the secretary of state's office before it is authorized to do business.
false
Contracts of suretyship are legally indistinguishable from contracts of indemnity.
false
If a partner assigns his or her interest in a partnership to a creditor, the assignee steps into the shoes of the partner and becomes entitled to participate in the management of the business.
false
In a consolidation, one corporation (A) assumes the assets and liabilities of another corporation (B), and corporation B ceases to exist.
false
In a limited partnership, each limited partner has an equal right to participate in the management of the business.
false
Individual members of the LLC can never bind the LLC in a valid and enforceable contract.
false
Limited Partnerships offer a convenient way for professional and family-owned enterprises to do business.
false
Limited partnerships must have one general partner for every seven limited partners.
false
Minority shareholders have the best chance of electing someone to the board of directors under the straight method of voting.
false
Misconduct of the principal that induces a party to become a surety allows that surety to avoid the contract.
false
Partners may use partnership property for both partnership and personal reasons.
false
Stock that is issued and then repurchased by a corporation is watered stock.
false
The Statute of Limitations does not apply to surety contracts.
false
The general contractor is eligible for a mechanic's lien on the real property, but the subcontractors on the project are not.
false
The majority of states have not yet enacted Limited Liability Partnership enabling statutes.
false
Under most state corporation statutes, shareholders are entitled to be paid dividends whenever an earned surplus exists.
false
A person may become a partner without making a capital contribution.
true
A principal who is discharged in bankruptcy is released from his duty to reimburse the surety.
true
Because the LLC is a relatively new type of business entity, there are often fewer published court opinions addressing LLC issues.
true
Boards of directors normally have the power to purchase insurance to indemnify directors who are sued personally for corporation-related actions.
true
Co-sureties share joint and several liability to the creditor
true
If the principal does not default, the surety never becomes liable to the creditor.
true
Limited partners may lose the full amount their capital contribution if the limited partnership incurs debts that exceed its assets.
true
Members of professional associations and professional corporations are eligible under the Tax Code to participate in pension and profit-sharing plans.
true
One recognized advantage to a general partnership is that it allows partners to share in management and profits of the partnership.
true
Partners have unlimited personal liability for the debts incurred by the partnership.
true
Premiums paid by corporations for the health insurance it provides employees are tax-deductible expenses.
true
Shareholders may dissent from both stock-for-stock mergers and cash-for-stock mergers.
true
Shareholders of corporations pay taxes on the dividends distributed to them by the corporation.
true
State courts have the power to order that real property be sold to satisfy a mechanic's lien.
true
The bankruptcy of a partner will cause the dissolution of the partnership by operation of law.
true
The capital contribution of each partner is a liability to the partnership and must be returned to the partner when the partnership ends.
true
The manager of a manager-managed Limited Liability Company may be a non-member.
true
The surviving partner is entitled to compensation for winding up the affairs of the partnership.
true
When holders of mechanic's liens are equal in priority, and there are not sufficient funds to satisfy all their claims, they will share the funds that are available on a pro-rata basis.
true
