Business Legal Final

The _____ requires formal rule making when an enabling statute or other legislation mandates all regulations or rules to be enacted by an agency as part of a formal hearing process that includes a complete transcript.

Administrative Procedures Act

Which of the following is generally defined as a relationship between a principal and an agent?

Agency

A corporation is a ________ corporation in the state in which it is incorporated.

Domestic

Which of the following refers to a defense that requires the defendant to demonstrate that he or she investigated the registration statement and had reasonable grounds to believe that the statement was accurate?

Due diligence

A(n) ______ power of attorney is a written document, created by a principal, expressing his or her wishes for an agent's authority not to be affected by the principal's subsequent incapacity, or for the agent's authority to become active only after a principal becomes incapacitated in any manner.

Durable

A binding decision issued by an administrative law judge (ALJ) is known as a(n) _____.

Order

________ stock has a fixed face value noted on the stock certificate.

Par-value

_____ is/are responsible for managing the business of a corporation.

The board of directors

Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

The consumer may treat the merchandise as a gift.

Which of the following references the right of a corporation or its shareholder to purchase any shares of stock offered for resale by a shareholder within a specified period of time?

The right of first refusal

A(n) _____ takes over administration of the debtor's estate.

Trustee

If a corporation acts beyond its express and implied powers, the act is called a(n) _____ act.

Ultra vires

The Age Discrimination in Employment Act (ADEA) was enacted to prohibit employers from _____ older workers.

refusing to hire, discharging, or discriminating in the terms and conditions of employment against

The United States Congress made comprehensive changes to bankruptcy law in the _____.

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

The Family and Medical Leave Act guarantees all eligible employees up to _____ weeks of unpaid leave during any _____ month period for designated family-related occurrences.

12; 12

A limited partnership is an agreement between at least _____ general partner(s) and ______ limited partner(s).

1; 1

The Fair Labor Standards Act mandates that employees who are not excluded from its coverage and who work more than _______ hours in a week be paid no less than one and one-half times their regular wage for all the hours beyond ________ that they work during a given week.

40; 40

Chocolate Chips. Molly makes great chocolate chip cookies and sells them. She calls them "Molly's Famous Chocolate Chips." Some of her friends are interested in selling her cookies. They want to use her name and identify the cookies as "Molly's Famous Chocolate Chips." Molly says, however, that she does not have enough time to bake any more cookies. She agrees, for a price, to allow her friends to use her recipe and her name. Suzette, one of Molly's friends who was selling the cookies, was not being sufficiently careful and negligently put a harmful ingredient into the cookie dough resulting in a customer, Fred, becoming ill. Fred threatens to sue both Suzette and Molly. Molly is so exasperated that she cancels all the franchise contracts on the basis of aggravation although the franchise agreements provided that so long as requirements were met, the franchise agreements were good for a period of two years, Molly took the position that the cookies involved a personal service and that she could not be held liable for discontinuation. What type of arrangement did Molly make with her friends?

A franchise that was a manufacturing arrangement

Which of the following is true regarding a secured party's interest in proceeds?

A secured party automatically has an interest in proceeds for a limited amount of time.

Which of the following is an amendment to a financing statement stating that the debtor has no obligation to the secured party?

A termination statement

A(n) ________ investor is a private investor who is allowed to accept private securities offerings under certain specific guidelines established by the Securities and Exchange Commission.

Accredited

Expressed agency is also known as agency by _______.

Agreement

Tutoring Concerns. Wally and Sally want to go into business together and plan on offering a tutoring service to high school and college students. Wally proposes that they share control of the business and split profits equally and not bother with a written agreement. Sally, however, is concerned about being able to pay their debts because they will have to rent tutoring space and purchase computers and supplies. She is also concerned about parents and students who may sue if the students' test scores do not improve. She tells Wally that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells Wally that they should form a corporation to shield their personal assets. Wally, however, says their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would likely result in double taxation. What type of arrangement, if any, would avoid double taxation for the Wally and Sally's endeavor?

An S corporation or a limited liability company, but not a corporation

Which of the following is a document a corporation files with the state explaining its organization?

Articles of incorporation

Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy proceeding?

An automatic stay

Which of the following type of agency exists when a third party reasonably believes, on the basis of the principal's actions, that an agency relationship exists between the principal and another individual?

Apparent

Which of the following is a way that a corporation can avoid double taxation?

By forming an S corporation

Which of the following are rules and regulations that govern a corporation's internal management?

Bylaws

A(n) ________ is a Federal Trade Commission order requiring that a company stop its illegal behavior.

Cease-and-desist order

Which chapter of the Bankruptcy Code is used to reorganize the debtor's financial affairs under the supervision of the bankruptcy court?

Chapter 11

Which chapter of the Bankruptcy Code is used for the sale of a debtor's assets by a trustee and the distribution of money to creditors?

Chapter 7

Which of the following consists of negotiations between an employer and a group of employees so as to determine the conditions of employment?

Collective bargaining

Owners of _____________ stock own a portion of a corporation but do not enjoy any preferences.

Common

A(n) ______ trust is an equitable trust imposed on one who wrongfully obtains or holds legal right to property he or she should not possess.

Constructive

________ is a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue.

Corrective advertising

Which of the following are examples of securities?

Debentures, stocks, bonds, and warrants

________ is the practice of advertising with claims that mislead or could mislead a reasonable consumer.

Deceptive advertising

When a principal is classified as a ______ principal, a third party is aware that an agent is making an agreement on behalf of the principal and the third party also knows the identity of the principal.

Disclosed

Which of the following is a correct statement regarding law governing the incorporation process and corporate taxation?

Each state has different laws governing the incorporation process and different corporate tax rates.

Which of the following is true regarding the tort liability of employers for the actions of their employees and independent contractors?

Employers are generally liable in tort for the actions of their employees, while they are generally not liable for the actions of independent contractors.

Which of the following is the form that verifies the identity and eligibility of all individuals hired in the United States?

Employment Eligibility Verification Form I-9

The duration of one's ownership interest and the power one has over using the land depends on the type of ______ one is said to hold.

Estate

The two classifications of agencies are:

Executive and independent.

The _________ Act governs the issuance of credit reports.

Fair Credit Reporting

The _____ Act is a federal law regulating the payment of wages and overtime.

Fair Labor Standards

Which of the following are the types of rule making done by agencies?

Formal, informal, and hybrid

A ________ is a business that exists because of an arrangement between the owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark.

Franchise

Tangible property includes:

Furniture and cars

In a limited partnership, who assumes unlimited personal liability for the debts of the partnership?

General partners

Which of the following are examples of collateral?

Goods, indispensable paper, intangibles, and proceeds

Agencies that have characteristics of both executive and independent agencies are known as _____ agencies.

Hybrid

Which of the following is true regarding the Securities Exchange Act of 1934?

It regulates the subsequent trading of securities, it requires that certain issuers file periodic reports with the Securities and Exchange Commission, and it permits the Securities and Exchange Commission to monitor securities markets for fraud and market manipulation.

Chocolate Chips. Molly makes great chocolate chip cookies and sells them. She calls them "Molly's Famous Chocolate Chips." Some of her friends are interested in selling her cookies. They want to use her name and identify the cookies as "Molly's Famous Chocolate Chips." Molly says, however, that she does not have enough time to bake any more cookies. She agrees, for a price, to allow her friends to use her recipe and her name. Suzette, one of Molly's friends who was selling the cookies, was not being sufficiently careful and negligently put a harmful ingredient into the cookie dough resulting in a customer, Fred, becoming ill. Fred threatens to sue both Suzette and Molly. Molly is so exasperated that she cancels all the franchise contracts on the basis of aggravation although the franchise agreements provided that so long as requirements were met, the franchise agreements were good for a period of two years, Molly took the position that the cookies involved a personal service and that she could not be held liable for discontinuation. Will Molly likely be held liable to Fred?

It is unclear and depends on whether she exercised too much authority in the day-to-day affairs of Suzette's business.

_____ is the right of a principal to sue an agent to recover any amount assessed against the principal for a breach of contract caused by the agent's negligence.

Indemnification

Persons who are not employees but who are hired by employers to perform certain tasks are known as:

Independent contractors

Which of the following is an incorrect statement regarding the Freedom of Information Act (FOIA)?

Information regarding the agency's personnel records may be obtained under the FOIA.

Which of the following is generally defined as a relationship between a principal and an agent?

Inside

To be protected in ____________ use, a trademark must be registered with the United States Patent Office under the Lanham Act of 1947.

Interstate

Which of the following is a false statement regarding the Federal Unemployment Tax Act?

It provides a federal system to provide unemployment compensation to qualified employees who lose their jobs.

What types of powers do administrative agencies have?

Legislative, judicial, and executive

Securities which do not have to go through the registration process include:

Limited offers, intrastate issues, and resales of securities

In a limited partnership, who has no part in the management of the business?

Limited partners

Which of the following types of bankruptcy occurs when a debtor turns over all assets to a trustee?

Liquidation

Which of the following describes property that the true owner has intentionally placed somewhere but has forgotten its location?

Mislaid

The _____ interprets and enforces the National Labor Relations Act.

National Labor Relations Board

Which of the following is a way in which a gift differs from a purchase as a way of transferring ownership?

No consideration is needed for a gift.

Tutoring Concerns. Wally and Sally want to go into business together and plan on offering a tutoring service to high school and college students. Wally proposes that they share control of the business and split profits equally and not bother with a written agreement. Sally, however, is concerned about being able to pay their debts since they will have to rent tutoring space and purchase computers and supplies. She is also concerned about parents and students who may sue if the students' test scores do not improve. She tells Wally that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells Wally that they should form a corporation to shield their personal assets. Wally, however, says their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would likely result in double taxation. Is Wally correct that with his proposal that because they share control of the business and split profits equally, they will not have any personal liability for debts?

No, he is incorrect because partners have personal liability for debt.

The _____ Act regulates workplace safety.

Occupational Safety and Health

________ is/are responsible for running the day-to-day business of a corporation.

Officers

A voluntary association between two or more persons who co-own a business for a profit is a(n) ________.

Partnership

An agent's duty of _____ to the principal includes the agent's obligation to perform the duties as specified in the agency agreement.

Performance

A document that gives an agent the authority to sign legal documents on behalf of the principal is known as a(n) _____.

Power of attorney

When a debtor uses borrowed money from the secured party to buy the collateral, a(n) _____ interest is formed.

Purchase-money security

he bona fide occupational qualification (BFOQ) defense does not apply to which of the following types of discrimination?

Race and Color

Land and everything permanently attached to it are known as _____ property.

Real

A _____ letter is provided to a plaintiff if the Equal Employment Opportunity Commission decides not to sue on behalf of the plaintiff.

Right-to-sue

A _____ transaction is a transaction in which the payment of a debt is guaranteed by the debtor's personal property owned by the debtor.

Secured

________ are financial instruments such as stocks or bonds which are issued by corporations to raise capital for corporate expansion.

Securities

An agreement in which the debtor gives a secured interest to the secured party is a(n) _____.

Security agreement

Men and women may be paid different wages under the Equal Pay Act when payment is made pursuant to a ____.

Seniority system, a merit system, or a system that measures earnings by quantity or quality of production

General credit information is considered obsolete after _____ years.

Seven

If corporate directors fail to sue when the corporation has been harmed by an individual, another corporation, or a director, individual shareholders can file a _____ on behalf of the corporation.

Shareholder's derivative suit

In which of the following situations would a court likely to pierce the corporate veil?

Shareholders attempt to commit fraud through a corporation.

When a person decides to go into business on his or her own and is solely responsible for management and profits, a(n) ________ is formed.

Sole proprietorship

To properly register a trademark with the United States Patent and Trademark Office, one must:

Submit a drawing of the mark, indicate when it was first used in interstate commerce, and indicate how it is used.

The issuance of a(n) _____ is an example of an administrative agency's investigative powers.

Subpoena

In order to be upheld in court, an agency's fact finding must be supported by which of the following?

Substantial evidence

_____ enables employees who lose their jobs or have their hours reduced to a level at which they are no longer eligible to receive medical, dental or optical benefits have the right to pay to continue receiving benefits for themselves and their dependents under the employer's policy.

The Consolidated Omnibus Budget Reconciliation Act

Which of the following legislation directed Securities and Exchange Commission oversight of the Public Company Accounting Oversight Board to regulate public accounting firms?

The Sarbanes-Oxley Act of 2002

Which of the following legislation regulates how companies issue corporate securities?

The Securities Act of 1933

________ regulate(s) securities transactions.

The Securities Act of 1933 and the Securities Exchange Act of 1934, but not the Anti-Fraud Securities Act of 2001

Which of the following is/are federal law(s) regulating the credit industry?

The Truth in Lending Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act

In a dispute between two secured parties with unperfected security interests, which of the following is true?

The party who attached its interest first will prevail.

The term ______ refers to the overall appearance and image of a product.

Trade dress

What is a distinctive mark, word, design, picture, or arrangement that is used by a producer in conjunction with a product and tends to cause consumers to identify the product with the producer?

Trademark

The principal-employer holds _____ liability for any harm caused by the agent-employee during the time that the agent-employee is working for the principal.

Vicarious

A corporation may distribute its income to shareholders through _____.

dividends

Under the Privacy Act, an individual may have the right to:

see and amend federal agency records, as well as sue the government for Privacy Act violations.

According to the Uniform Commercial Code, a financing statement should include _____.

the names and addresses of all the parties involved, a description of the collateral, and the signature of the debtor

The Federal Trade Commission considers ________ abusive action by telemarketers.

using profane or obscene language toward a customer, calling a person who has previously requested to be taken off the particular seller's calling list, and calling a residence before 8 a.m.