I-8BLAW Exam 3

Investors Holdings, Inc., attempts to acquire a substantial number of the shares of Jack's Seed Company through a public offer to Jack's shareholders. This is

A Tender Offer

Dreen Land Corporation and Earthbound Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and Earthbound. This form of a business organization is

A business trust

Licensed fishing outfits in Bayou City form a business organization to provide, without profit, an economic service to its members. This is

A cooperative

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, at common law Wings2Go is most likely

A de facto corporation

Hollywood Lights, Inc. substantially complies with all conditions precedent to incorporation. Hollywood is most likely

A de jure corporation

Transworld Import Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This organization is

A joint stock company

Lightspeed Corporation and Mindful, Inc., two game creators, wish to combine their capabilities to make and market Nanoworld, a special limited-edition online game, the appropriate legal entity for this project is most likely

A joint venture

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with

A prospectus

Lebron, Michael, Nolan, and O'Neill combine to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as

A syndicate

A corporation in another in another country

Alien Corporation

Thor Power Products Corporation permits its directors to be elected by cumulative voting. This inspection rights

Allows minority shareholders to be represented on the board

NuTrend Clothing Corporation is a public company whose securities are traded among investors. Under the Securities Act of 1933, a security is

Almost any stake in the ownership or debt of a company

Music Makers Inc. has a stated purpose to sell musical instruments. If chief executive officer Ned contracts with Open Carry Firearms in Music's name to sell a shotgun, he has likely committed

An ultra vires act

This is created by a written trust agreement. Legal ownership and management of the property of the business are in one or more trustees, and profits are distributed to beneficiaries

Business Trust

Kari owns and operated Living Earth Garden Shop, an outdoor tool and landscaping supplies retail store, as a sole proprietorship. When Kari dies, Living Earth will automatically

Cease to continue

Narib and Olivia are limited partners in Physicians Medical Center, a limited partnership. In terms of the firm's books and information regarding partnership business, Narib and Olivia are entitled to

Complete access

Shale Oil Processing Corporation combines its assets and debts with those of Tierra Frakking Company to form United Resources, Inc. Shale and Tierra cease to exist. The formation of United Resources is

Consolidation

An association organized to provide an economic service without profit to its members

Cooperative

A corporation in its home state

Domestic Corporation

Broncobuster BarBq Company and Cowpuncher Cuisine, Inc. decide to combine. Deanna, a Cowpuncher shareholder, is dissatisfied with the price that she will receive for her stock. In the absence of fraud or other illegal conduct, Deanna's exclusive remedy is to

Exercise an appraisal right

A short-form merger requires the approval of the shareholders of both corporations

False

An acquiring corporation deals directly with a target corporation's management in seeking to purchase the target's stock by making a tender offer

False

Corporate "outsiders" may not be held liable for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

False

If no fixed duration of the partnership is specified, the partnership is a partnership in perpetuity, which means that the partnership cannot be dissolved.

False

In a general partnership, the senior partner controls decisions on ordinary matters connected with partnership business

False

The day-to-day operation of the franchise business normally is under the control of the franchisor

False

To pierce the corporate veil means to shield the shareholders from personal liability

False

When a corporation earns profits, it must pass them on to shareholders in the form of dividends

False

When a limited liability company is dissolved, any member who did not wrongfully dissociate may participate in the winding up process.

False

A corporation in another state

Foreign Corporation

Any arrangement in which the owner of a trademark, a trade name, or a copy right has licensed others to use it in selling goods or services

Franchise

A hybrid of a partnership and a corporation where ownership is in shares of stock

Joint Stock Company

A relationship in which two or more persons combine their efforts or their property for a single transaction or project, or a related series of transactions or projects.

Joint Venture

Kristin and Lindsey are partners in Mobile Devise, an online marketing firm. Kristin signs a contract with Nature's Best Chocolate, a candy maker and seller apparently on Mobile's behalf. The contract is binding on

Kristin, Lindsey, and Mobile

Nora is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nora's decisions must be informed and

Made after reasonable investigation

Nature Laminate Corporation and Oak Wood Flooring Company combine so that all that remains after the papers have been signed is Natural Laminate. This is

Merger

An association of two or more persons to carry on as co-owners a business for profit

Partnership

Certain corporations qualify under the IRS to avoid the imposition of income taxes at the corporate level.

S corporation

The simplest form of business ownership

Sole Proprietorship

A group of individuals getting together to finance a particular project, such as the building of a shopping center of the purchase of a professional basketball franchise

Syndicate

Esperanza is interested in buying a franchise from Fire Mountain Gemstones, Inc,. Fire Mountain must disclose material facts that Esperanza needs to make an informed decision concerning this purchase, according to

The Federal Trade Commission's Franchise Rule

Brad and Carolyn are partners in Doctors for Children, a medical clinic. Brad dissociation from the firm results in

The partnership's buyout of Brad's interest in the firm

A corporation has perpetual existence in most states unless the articles of incorporation state otherwise

True

A court can dissolve a corporation for committing fraud or misrepresentation

True

A director can be elected by the other members of the board

True

A sole proprietor is free to make any decision he or she wishes concerning the business

True

For shareholders to act during a shareholders' meeting, a quorum must be present

True

In winding up a general partnership, creditors are paid before partners receive their capital contributions

True

Members of a limited liability company can stipulate in their operating agreement provisions relating to dissolution

True

The sale and transfer of securities are heavily regulated by federal and state and statutes and by government agencies

True

Traditionally, the three major forms entrepreneurs have used to structure their business enterprises are the sole proprietorship, partnership and corporation

True

Under the Sarbanes-Oxley Act of 2002, chief corporate executives must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission

True

Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership.

True

Foster enters into an agreement with Grab n' Eat Burger, Inc., to operate a franchise in Home Town. Later Grab n' Eat grants franchises to others within the same territory, causing Foster to suffer a significant loss in profits. In Foster's suit against Grab n's Eat, Foster's best argument is that the franchisor

Violated the implied covenant of good faith and fair dealing

Lewis is a director of Mines & Refineries, Inc. Using information that is not available to the public, Lewis makes a profit trading in Mines & Refineries stock. Lewis is most likely liable for breach of

the duty of loyalty