Corporations Test
A corporation can be sued . A limited liability company can be sued.
Both statements are true.
Which of the following statements is true?
A partnership can be sued.
In order for respondeat superior to apply, the negligence must normally occur:
During the scope of employment
Which of the following statements is true?
Agency law is about creating legal relationships.
The agency relationship is formed between who?
The principle and the agent
Within agency law, apparent authority is predicated on what?
The reasonable belief of the third party.
Ron and Jane attempt to create a corporation. Ron and Jane have never created a corporation before. They fail to follow certain statutory requirements that are needed to effectively create a corporation. What legal issue should at least be considered, based solely on the above facts that you have been provided?
A potential de facto corporation
If you are looking at whether the principle is liable for acts undertaken by someone else, which body of law are you likely examining?
Agency Law
John is a shareholder of Corporation XYZ. John personally has $75,000 in a Roth IRA retirement fund and $30,000 in a college savings fund. Corporation XYZ has $250,000 in assets. If Corporation XYZ is successfully sued and $25,000 of John's Roth IRA is removed by a judgment, which of the following legal concepts would most likely explain why this happened?
Alter Ego
Agency law is typically concerned with what legal issue?
Can the third party sue the principle, based on the actions of the agent?
If you are examining whether a shareholder can be personally liable, what type of law are you examining?
Corporate Law
Piercing the corporate veil is a concept from:
Corporate Law
A board of directors is found in what kind of legal entity?
Corporation
Bob owes $30,000 in personal debt. Bob creates Corporation XYZ and fills out the corporate paperwork perfectly. Corporation XYZ becomes a legitimate corporation with a board of directors, officers, and Bob as the sole shareholder. Which of the following is true?
Corporation XYZ cannot absorb Bob's personal debt
A corporation formed in accordance with state law is called what?
De Jure Corporation
The duty of loyalty states that a officer is not, under any circumstances, allowed to take any other business opportunities.
False
A corporation can only be one kind, a public corporation.
False
A employee of Hudl sign a contract with Gerryman LLC for Gerryman LLC to build an addition on their property headquarters. In this scenario, who is the third party?
Gerryman LLC
What is a true statement regarding respondeat superior?
It normally does not apply to intentional torts, only negligence.
John is a shareholder of Corporation XYZ. The general rule regarding John's liability as being a shareholder of Corporation XYZ is most accurately stated as what?
John is generally not personally liable for actions by Corporation XYZ
If you hear a reference to the concept 'alter ego' in a business setting, what doctrine is potentially implicated?
Piercing the corporate veil
The general rule regarding when there is personal liability, strictly within the context of corporations, is known as what?
Piercing the corporate veil
The concept of corporation by estoppel is primarily geared toward what objective?
Preventing a party from backing out of a contract
Which of the following is a true statement?
Respondeat superior is a tort doctrine, which is applied in agency law
The owners of a corporation are called:
Shareholders
What is the general rule about shareholder liability?
Shareholders are not personally liable
A employee of Hudl sign a contract with Gerryman LLC for Gerryman LLC to build an addition on their property headquarters. In this scenario, who is the agent?
The employee of Hudl
In agency law, the principle is typically who?
The employer
What is one of the main reasons to incorporate (or form a corporation)?
To avoid personal liability
A corporation can be sued.
True
State statutes are responsible for the formation of LLC's. State statutes are responsible for the formation of a corporation. However, federal statutes technically process the paperwork of LLC's and corporations in order for formation to be official.
Two of the statements are true.
If you are a attorney arguing that your client was acting outside the scope of employment, what is a strong, favorable piece of evidence?
Your client was a independent contractor
The shareholders are ________________.
owners
