LES 305 EXAM 3 QUIZZES

An LLC offers principals the same liability coverage as that of

principals in corporations with pass-through taxation

The False Claims Act allows the reporting party to file a lawsuit against the organization that is accused of the fraud and to

receive a portion of any monetary recovery

Which is not one of the exceptions provided by the courts that help to limit the harshness of the employment-at-will rule on employees?

registration of notice

The law mandates that employers provide up to ___ weeks of unpaid leave to employees for purposes related to family medical matters during any 12 month period

12

To be eligible for FMLA benefits, an employee must have worked for the company for at least 12 months and have worked _____ hours during the past 12 months

1250

The Fair Labor Standards Act imposes restrictions on hiring workers under

18 years old

LLCs were originally created by the Wyoming legislature in

1977

The Industrial Revolution is described as the time period during the ____ centuries that saw great advances in science and technology

19th and 20th century

In _, the SEC is issued a rule required by the Dodd-Frank Act that requires a company to disclose (1) the median of the annual total compensation of all its employees except the CEO, (2) the annual total compensation of its CEO, and (3) the ratio of those two amounts

2015

According to the National Whistleblower Center, approx. __ precent of the money recovered under the False Claims Act over the past decade was from cases brought by employees of contractor firms

70

The FMLA is administered by the Department of Labor and applies to employers that have 50 or more employees within ___ miles

75 miles

The Labor Management Relations Act gives the president of the United States the right to suspend a strike for up to ____ in times of national emergency

80 days

Workers at Jones Corporation have been on strike for three months due to an impasse based on salary and benefits. When the strike is concluded:

the employer is not required to rehire the employees and the employees are not entitled to back pay

Several people have decided to go into business as an LLC. To cover all contingencies, they want to specify what constitutes an act of dissociation and outline the procedures upon dissolution. This information would be included in

the operating agreement

Regarding limited partners,

they may not withdraw before the time that the partners have agreed the partnership will terminate

A name used by a sole proprietorship for a business instead of the proprietor's actual name is called a

trade name

Privately held corporations may issue a ____ in lieu of conducting a formal annual meeting

unanimous consent resolution

Which of the following statements about a franchise is correct?

A franchise faces mandatory disclosures

Which of the following doesn't require a duty of care or good faith to other principals?

A sole proprietorship

A franchisor assists the franchisee with all of the following except

Filing the articles of incorporation -They assist with financing, training, and supplies

Management is permitted to voice objections to the formation of a union under the

Labor Management Relations Act

Which of the following is also called the Taft-Hartley Act?

Labor Management Relations Act

LLC stands for

Limited Liability Corporation.

Frances wants to start a new small business and is seeking advice as to which type of entity would best suit his needs. His business has a high potential for liability and therefore he wants to protect his personal assets, but he does not want to spend a lot of time, effort or money in starting the business up or continuing the management of it. Additionally, he is looking for an entity that would give him the best tax advantages. Which type of business organization would suggest?

Limited liability company

Morton lends money as a business loan to Luisa, who is capitalizing her start-up sole proprietorship named Luisa's Things. If Morton must sue for repayment, he would sue

Luisa

In Waddell vs. Rustin, the court determined

That no implied partnership existed as that the prosperity of the business was not due to the equal contribution of the two parties

Which entity wrote the Revised Model Business Corporation Act (RMBCA)?

The American Law Institute

All of the following are generally required to be included in the articles of organization except

The bylaws of the LLC BUT the following has to be included: names of the owners, name of the LLC, the location of its principle place of business

The SOX Act specifically directs the ____ to amend sentencing guidelines to provide for harsher penalties for those convicted of securities fraud statutes.

U.S. Sentencing Commission

Which statement is accurate about Delaware as it relates to taxation treatment of out of state corporations that incorporate in Delaware?

Unless they sell products and services in Delaware, they may not benefit at all from Delaware tax treatment. - It is a myth that out-of-state corporations that incorporate in Delaware received tax breaks.

When does an initial public offering (IPO) occur?

When a privately held corporation seeks to become a publicly held corporation.

Which of the following is a time when limited liability of the personal assets of members of an LLC may be waived?

When the members engage in fraud.

A dissolution occurs

When triggering event that is specified in the agreement occurs

Federal employees are protected from retaliation for whistleblowing by the ____

Whistleblower Protection Act of 1989

What laws compensate employees with job-related injuries or illnesses which are paid based on a percentage of the employee's salary at the time of the occurrence?

Worker's compensation

Robert Hill Corp. (RHC) is incorporated in the state of Delaware. If it transacts business in Iowa, RHC would be characterized in Iowa as

a foreign corporation (A corporation incorporated in one state but doing business in another state is classified as foreign in that other state.)

Which of the following require(s) a formal filing to be recognized as a valid business entity?

a limited partnership

A franchise should be thought of as

a method of conducting business

After a legally sound election is held, ____ of pro-union votes is required for the NLRB to certify the collective bargaining unit as a union

a simple majority

The court in Jasper v H. Nizam, Inc., 764 N.W.2d 751 (Iowa 2009) held that ___ regulations are reliable source of public policy

administrative

What could companies require employees to sign with regard to telephone calls or voicemail at work?

consent to be monitored

Certain federal and state statutes _____ common law employment-at-will rules

displace

In the event an employee is terminated for whistleblowing, the Dodd-Frank anti-retaliation provision allows the whistleblower to sue for up to

double back pay

Pass-through taxation avoids __________ that corporations face.

double taxation

The American Recovery and Reinvestment Act of 2009 was created in order to

authorize direct government loans to corporations

The RULLCA changes the term managing member to

authorized representative

In McQueary v. The Pennsylvania State University, Pa. Ct. of Common Pleas, No. 2012-1804 (2016), what proceeding led up to McQueary being fired?

grand jury testimony

Upon approval by a(n) _______ court, the SOX Act allows the SEC to force any extraordinary corporate payouts into a government-controlled emergency escrow fund that is held pending further investigation by authorities.

federal

A responsibility to act in the best interests of a partnership by the partners is called a(n)

fiduciary duty

In June 2002, Arthur Andersen was convicted of the obstruction charges, sentenced to pay a ____ fine, and banned from performing audits for publicy traded companies.

$500,000

Morris is a nonexempt employee with a salary of $400 a week based on a 40-hour week. If he works 50 hours in a particular week, his paycheck should be for

$550 ($400+$150)

Business owners are also known as the

Principals

Which terms means to raise funds for a business?

Capitalization

An employee has the right to do which of the following?

All are correct( track websites visited by employees, count keystrokes and mouse clicks, block employees from visiting specific internet sites and limit the amount of time an employee may spend at a specific website

What profession(s) is/are subject to various state licensing regulations?

All choices (massage therapists, doctors of oriental medicine, electricians)

State licensing statutes and regulations compel workers to ____ in order to legally work in a licensed profession

All choices (pay a fee, complete a training program, pass an exam)

All of the following statements are true about double taxation EXCEPT:

An LLC cannot face double-taxation

In Whirlpool v Marshall, what did the Supreme Court conclude about an employee's right to walk off the job when faced with a hazardous workplace condition?

Despite the lack of specific authorization in the OSHA statue, an employee may walk off the job when faced with a condition that an employee reasonably believes will result in serious injury or death and the context makes it impractical for the employee to contact administration inspectors

Rocky and Paulie enter into a professional boxing partnership. Paulie, not being a very bright man, makes all partnership decisions by flipping a coin. Which of the following statements is correct?

If the court determines that Paulie's actions were grossly negligent, then he will have breached his duty of care

In AK-Feel, LLC v. NHAOCG, the court determined

In order to eliminate the fiduciary duties of the managing members the language of the operating agreement must be clear and unambiguous. (Drafters of an LLC agreement must make their intent to eliminate fiduciary duties plain and unambiguous.)

Which statement below is correct about a sole proprietorship?

It has low start up costs and minimal filing

All of the following statements about the Uniform Limited Liability Company Act are correct except

It was created by federal statute.

The expiration date of a corporate bond is also called its __________.

Maturity date

Phoenix Bookstore, LLC with four members incurs substantial debt due to a downturn in book purchases. At the end of the fiscal year they are $100,000 in debt. For how much will each of the four member be personally liable?

Nothing.

Unsafe workplace conditions are monitored and regulated under

OSHA

A public outcry and a growing lack of investor confidence in corporate financial disclosures caused Congress to overhaul the entire corporate governance regulatory structure by passing the

Sarbanes-Oxley Act of 2002

Which of the following is NOT a right enjoyed by shareholders of a corporation?

The right to elect and remove officers BUT shareholders have the right to veto a board decision to pursue venture capital financing, issue more capital stock and the right to approve structural changes in the corporation through the amending of the articles

In the case of Lewis v Moore the court ruled

The sole proprietor has the right to dissolve the proprietorship at any time

What is the function of an LLC operating agreement?

To set out the structure and internal rules for the entity.

The loan program created by the American Recovery and Reinvestment Act of 2009, established the ___ to administer the loans

Troubled Assets Relief Program

The employment-at-will rule is decidedly ____ toward protecting the interests of the employer

biased

Which terms means to raise funds for a business?

capitalization

What is an advantage of a Subchapter S corporation that a standard corporation does not have?

it does not face double taxation

The FMLA affords employees certain protections related to

job security

General partners' personal assets are at risk both together and separately for all debts and liabilities of the partnership regardless of the source of the debt or liability is called

joint and several liability

LLCs members have

limited liability

A corporation formed to maintain a charitable operation is called a

non profit corporation

Which group of a corporation is responsible for running the day to day matters of the corporation?

officers

In an LLP, any income is taxed

only when distributed to it's partners

LLCs are frequently governed by an agreement of the parties called an LLC agreement or

operating agreement

A partnership where the partners have not agreed to remain partners until the expiration of a definite term or event is known as

partnership at will

With regard to taxation, LLP's are treated as

pass-through entities

The ability to flow through to the investors the tax deductions and losses that are typically generated by an emerging company or a company with significant up-front debt is an advantage of a

pass-through entity

A person who preforms pre-incorporation duties on behalf of the forming corporation is called a

promoter

The most widely used exception that displaces the employment-at-will rule recognizes that allowing employers to terminate an employee for certain reasons may contradict

public policy

The type of corporation that generally has the highest number of shareholders is the

publicly held corporation. - Publicly held corporations sell stock to the public on the public markets and often have many thousands of shareholders.

All of the following are methods that a sole proprietor can raise money except

sell ownership in the business -they can raise money by: line of credit, private and commercial loans

An owner of a corporation is called

shareholder

Employee protection from the use of regular or random drug or alcohol tests in the workplace is governed by

state law

In what court was the following case decided in : Jasper v H. Nizam, Inc., 764 N.W.2d 751 (Iowa 2009)

supreme

The SOX Act imposed stricter regulations on how corporations do business through regulations in each of the following areas except

tax compliance ( the regulations were auditing, corporate governance and financial reporting)

Under the emergency escrow provisions created by the SOX

the SEC may require corporate payouts into a government-controlled emergency escrow fund during its investigation and before the SEC has uncovered wrongdoing by the corporation

In Smith v. Van Gorkom, the court considered whether the business judgment rule protected board members who permitted the sale of a significant amount of stock by the retiring chairman of the board at an undervalued price, devaluing the company. Regarding the board's liability in this case, the court stated each of the following except

the board in this case had the expertise to make decisions without consulting outside experts but made a poor decision. (The board lacked general expertise and failed to seek expert advice that was available to them, making the business judgment rule inapplicable.)

Which body of a corporation has the duty to appoint and to remove the corporation's officers?

the board of directors

Sonya and Davi are going to open a sporting goods store. They sign a written limited partnership agreement naming Davi as a limited partner and Sonya as the general partner. Sonya files a certificate of limited partnership with the state. Sonya contributes $100,000 toward the start-up, while Davi contributes $200,000. They agree to split profits evenly because Sonya will be working in the store and operating the day-to-day business. About a month after they open, the business is not doing well, so Davi starts becoming more involved. Soon he is requiring that Sonya approve all purchases with him, and Davi is actively directing Jack, the sole employee. One day, Geoff, a customer, is injured when a bowling ball falls off a shelf and shatters his foot. Geoff sues and is awarded a judgment of $1 million.

under the circumstances, Sonya and Davi are both jointly and severally liable for the full $1 million