Business Law exam 2 questions

according to the Uniform Partnership Act (UPA), the distribution of liquidated assets must proceed in which order?

Payments to creditors of the partnership, payments of refunds or repayment of loans to partners for loans made to the partnership, payments to partners of the capital they invested, and payments of profits distributed on the basis of the partnership agreement

what kind of notice must a third party who had business interactions with the agent be given?

actual notice

a principal has a right to ____________ if a breach of contract occurs due to an agent's negligence

indemnification

A principal has a duty to ___________ the agent for any losses the agent incurs in the course of working on behalf of the principal

indemnify

When a partnership adds another partner, the new partner assumes _____________ liability for any obligations that occurred before the partner was added

limited

which of the following is NOT a characteristic of a corporation

non-transferability of corporate shares

which classification of corporations may earn profits, but do not distribute them to shareholders?

nonprofit

A ___________ is an association of two or more persons to carry on as co-owers a business for profit

partnership

A shareholder can authorize a third party to act as a(n) _____________ to attend shareholder meetings and vote on behalf of the shareholder who cannot attend the meeting

proxy

If a partner dies, his or her partnership property transfers to the remaining partners under the

right of survivorship

Under the Uniform Partnership ACT (UPA), if the partnership agreement does not establish the division of profits, all partners:

share equally in both profits and losses

In order for a third party to sue an employer for a tort committed by the employer's agent, the third party must establish which of the following?

that the agent did not make a substantial departure from the course of the employer's business

which of the following statements best describes a secured bond?

Secured bonds are those that have specific corporate assets to support the corporation's obligation to repay.

__________- typically approve/disapprove of major decisions of the board

Shareholders

Identify the correct statement about the inspection rights of a shareholder.

Shareholders can inspect records and books only if they ask in advance and have a proper purpose.

When an asset purchase occurs, which of the following is true regarding the acquiring corporation assuming the liabilities of the selling corporation?

The acquiring corporation will assume the liabilities of the selling corporation if the sale occurs under fraudulent circumstances.

Which of the following statements is true regarding an agent who commits a tort that injures a third party?

The agent is personally liable regardless of the principal's classification and liability of the principal

Which of the following statements is true of a consolidation?

Two or more corporations combine to form an entirely new corporation, with its own legal status.

which of the following constitute the three major groups of individuals within a corporation

directors, officers, and shareholders

If Corporation A wants to takeover Corporation B but Corporation B objects, the takeover is referred to as ________

hostile takeover

when a partnership rightfully dissolves, all the partners can do each of the following acts except:

immediately withdraw their shares of partnership property

when a partner enters into agreements necessary to carry on the partnership business, that partner has exercised his or her

implied authority

an individual who applies to the state for incorporation on behalf of a corporation is called a(n)

incorporator

Which of the following terminations occurs by act of parties

lapse of time

Once a partnership has been ______, the partners begin the process of ______________

liquidated; winding up

The process by which the board of directors converts the corporation's assets into cash and distributes them among the corporation's creditors and shareholders is referred to as ________

liquidation

The duty of ___________ is the generally considered the most important duty an agent owes to a principal

loyalty

_______ give preference to shareholders to purchase shares of a new issue of the corporation's stock before it is offered to the public.

preemptive rights

Agency contracts do not need to be in writing unless an agent has been given power of authority or if the agent will be entering into a contract that the _____________ requires to be in writing

statute of frauds

A(n) _________ corporation has made minor errors in the incorporation process but has met the substantial elements

de jure

_______________ play the role of decision makers

directors

_______ is defined as the change in the relation of the partners caused by any partner's ceasing to be associated with the carrying on, as distinguished from the winding up, of the business

dissolution

Agency laws are relevant to three types of business relationships. Which of the following is not one of those relationships

employee-independent

_____________ is perhaps the most important consideration a court makes when determining whether a worker is an employee or an independent contractor

employer control

which power of attorney is intended to continue beyond the principal's incapacitation?

Durable power of attorney

A partnership is considered______________ that may hold title to property that individual partners do not hold

a legal entity

A target corporation may defend itself by having a group within the corporation (usually management) purchase all the corporation's outstanding stock held by the public. This defense strategy is called_________

a leveraged buyout

in a general partnership, default occurs in which of the following examples

any partner stops fulfilling the role of a partner to the business

which of the following statements is true of the liquidation phase of termination?

In cases of voluntary dissolution, liquidation duties fall on the board of directors.

which of the following statements is true of the right to compensation of partners in a partnerships relationship?

Partners do not enter into a partnership relationship with a right to compensation for performing business activities

which of the following is a document providing basic information about the corporation

articles of incorporation

What percentage of the outstanding shares of a subsidiary's stock must a parent corporation own for a short-form merger?

at least 90%

if a principal ____________, a durable power of attorney given by the principal to an agent is not affected.

becomes incapacitated

which of the following is not a type of lawsuit that a shareholder may bring against the corporation?

breach of duty suit

A partner's personal creditor can obtain a(n) ___________, which entitles a creditor to a partner's profits while the partner continues to act as a partner and engage in the partnership business.

charging order

an owner of which type of stock has the right to vote in corporate elections?

common stock

Principal-agent relationships are most significant for issues that are included in the category of _______ law

contract

The aggressor offers target shareholders a price above the current market value of the stock in a ________

tender offer

Linda hires Roy to build a shed in her backyard. Before Roy begins, the city council passes a law making it illegal to build storage units on any property in the city. The new law ________ the agency agreement.

terminates

A limited partner's limited personal liability depends on all but which of the following conditions

the limited partner has education, skill, and experience in the nature of the limited partnership business

Lisa does not know that Karen is acting on behalf of a principal; thus, the principal is said to be

undisclosed

A shareholder who receives _______ stock is liable for the difference between the price he or she paid for the shares and their stated corporate value.

watered

while a principal's tort liability depends upon whether the employee/agent was acting within the scope of his or her authority, misrepresentation liability depends upon which of the following?

whether the principal authorized the agent's act

according to the revised Uniform Limited Partnership Act (RuLPA), a limited partnership can be dissolved for all but which of the following reasons?

written consent of a majority of the limited and general partners