Test 3
Which of the following is usually included in the articles of incorporation:
(A) name and address of the corporation (B) name and address of the corporation's registered agent (C) purpose of the business (D) names and addresses of the incorporators
Which of the following are usually included in a written partnership agreement:
(A) name of the partnership (B) the allocation of ownership shares (C) accounting rules (D) voting rights of the partners (E) all of the other specific choices are usually included
Which of the following are usually included in a written partnership agreement:
(A) place and date of formation (B) the distribution of profits (C) priority rights in payments (D) how partnership shares will be valued (E) all of the other specific choices are usually included
Which of the following are usually included in a written partnership agreement:
(A) state law that applies to the partnership (B) contributions of the partners (C) limits on transfers of partnership shares (D) how partnership shares will be valued (E) all of the other specific choices are usually included
Electing a board of directors, enacting the corporation's bylaws, and issuing the corporation's stock are all things that occur:
After the state has issued the corporation's certificate of incorporation
In most states a limited partnership does not have to file what information with the appropriate state official?
Bankruptcy history of each partner
Dissolution of a partnership takes place, unless otherwise provided for by contract, in the following instances except:
Bankruptcy,withdrawal or death of a partner
The governing committee of a corporation is the:
Board of Directors
After reviewing a corporation's application, the state issues a:
Certificate of incorporation
Which of the following is a decision that would most likely require the consent of all partners:
Changing the nature of the partnership's business Admitting new partners selling the business
A _____ is one whose shares are held by one shareholder or a small group of shareholders.
Close corporation
A reason the corporate status is often chosen is:
Corporations have the status of a legal person
Directors are under a _______ to conduct themselves on behalf of the corporation as a reasonably prudent person in the conduct of personal business affairs.
Duty of Care
A shareholder's relation to creditors of the corporation is generally that the shareholder:
Has no relation to creditors
The articles of incorporation usually include all of the following except:
Names of all shareholders Name of the CEO Address of the corporation and the purpose of the business and classes of stock to be issued are included
A corporation separates:
Ownership from control
Gary and Sue start a consulting firm. They are co-owners of it and have joint control over its operation and the right to share in its profits. Their organization is most likely a:
Partnership
Which of the following statements about a corporation is true? Corporations are not entitled to constitutionally protected:
Privileges against self-incrimination
Most shareholders give third parties their ____. It is a written authorization to cast their vote so they do not have to attend a shareholder meeting in person.
Proxy
_____ are those with stock traded on a stock exchange and, therefore, are likely to have many shareholders.
Publicly held corporations
The ____ provides "default rules" that determine the operation of partnerships when the partnership agreement is silent or where there is no formal agreement among the partners.
Revised Uniform Partnership Act
The board of a corporation are elected by:
Shareholders
The owners of a corporation are called:
Shareholders
Whom of the following must follow a corporation's bylaws in conducting corporate activities:
Shareholders Directors Officer of the corporation
A corporation consists of:
Shareholders, board of directors, and officers or managers
A corporation consists of legally distinct groups, not including:
Stakeholders
Today a corporation must be created according to:
State law
The rules that regulate and govern the internal operations of a corporation are known as:
The bylaws
Which of the following is a right of a limited partner in a limited partnership:
The right to see the partnership books The right to participate in the dissolution of the business
In general, if a partnership agreement does not specify what happens in case of the death or departure of a partner, one looks to:
Uniform Partnership Act
Which of the following could lead to the dissolution of a partnership:
Withdrawal of a partner Death of a partner bankruptcy of a partner
In Zhou v. Bickley, Zhou helped Bickley start a motorcycle repair shop. When they got into a dispute later, the courts held that:
Zhou and Bickley were not partners, Bickley owed Zhou for money received to start the business run by Bickley
Shareholders, the board of directors and the managers are the three major groups that make up:
a corporation
During the course of a partnership's winding-up process, the partners owe each other:
a duty to disclose all finances of the partnership
A limited partnership is usually dissolved by the bankruptcy of:
a general partner,but not a limited partner
In most circumstances, a partnership is now treated as:
a legal entity
A limited partnership is different from a general partnership because:
a limited partnership may have only one general partner
Which of the following statements is (are) true?
a limited partnership must have at least one general partner
Which of the following apply to a sole proprietorship
a person is in business for himself
At a shareholder meeting, there must be:
a quorum
To hold a shareholder meeting, which criteria must be met?
a quorum of shareholders must be represented and advance notice of the meeting must be given
A partnership can begin with:
a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of the parties doing business
Compared to the U.S., new businesses in Japan:
are created much less frequently than they are in the U.S.
General partners in a limited partnership:
are personally liable to the partnerships creditors
In general, a corporation's ____, along with an application, must be filed with the appropriate state office, along with payment of a fee to create a corporation.
articles of incorporation
The duty of partners to a partnership is:
based on extraordinary trust and loyalty to the partnership
Unless the limited partnership agreement holds otherwise, when a limited partnership is dissolved the limited partners receive their share of the profits and their capital contributions:
before general partners receive anything
Limited partners are similar to corporate shareholders in that:
both are liable to the extent of their investment
In Japan small businesses are:
considered less desirable places to work, Discriminated against by government policy
A ____ is an artificial person,or legal entity, created under state law.
corporation
Coca-Cola,Microsoft and General Motors are all examples of:
corporations
A complete termination comes about only after the partnership has been ___ and its affairs have been wound up.
dissolved
A corporation is recognized under both federal and state law as a "person" and:
enjoys some of the same rights and privileges accorded U.S. citizens
A(n) ____ is any name other than the name of the individual who owns the business.
fictitious name
Partners in a partnership owe each other:
fiduciary duty
A ____ requires that each partner act in good faith for the benefit of the partnership.
fiduciary relationship
Under traditional common law rules, a partnership:
generally was not treated as a single legal entity
The shareholders of a corporation generally have the right(s) to:
give a third party the right to vote their shares by proxy
The dissolution of a partnership may occur
if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful
The modern corporation was developed:
in the United States during the eighteenth century
in a sole proprietorship, profits are taxed to the:
individual owner of the proprietorship
The owner of a sole proprietorship
is legally the same as the business and is taxed the same as the business and may hire any number of employees
A certification of incorporation from the government:
is necessary for a corporation to be recognized legally
Which of the following is not true about a partnership?
it is always an independent legal entity
Which of the following is not true about the termination of a limited partnership?
limited and general partners share assets equally at the same time after the creditors are paid
A business organization in which some of the partners are not liable for partnership debts is called a :
limited liability partnership
In a limited partnership the ___ are investors who may not participate in managing the business.
limited partners
A business organization made up of two or more persons who have entered into an agreement to carry on a business venture for a profit, and not all persons have the right to participate in management decisions is a:
limited partnership
The business organization that has at least one general partner and other investors who have limited liability is a:
limited partnership
Shareholders of a corporation have:
limited rights to see the corporation's books and records
In a sole proprietorship, the capital usually:
must come from the owners own resources or be borrowed
Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true?
only managing partners are fully responsible for debts of the partnership
There are ____ businesses in the United States.
over 30 million
In general, limited partners lose their limited liability status by:
participating in managerial decisions in the partnership
A ____ is an association of two or more persons to carry on a business as co-owners for profit.
partnership
In the final dispersal of the assets of the limited partnership, creditors rights:
precede partners rights
Legally, the board of directors is the _____ of a corporation
principal
The most common form of business organization is:
proprietorship
The oldest and simplest form of business organization is the:
proprietorship
Directors of a corporation may be:
removed for cause and be liable for a breach of duty
At a shareholder meeting,important corporate business is presented to the shareholders in the form of ____, which shareholders vote to approve or disapprove.
resolutions
A person doing business for himself or herself is a(n):
sole proprietor
A person doing business for herself is a _____ the business is a ____
sole proprietor, proprietorship
The majority of businesses in the United States are:
sole proprietorships
Under traditional common law rules, if you wanted to sue a partnership you had to:
sue each partner individually
A change in the relationship of the partners that shows an unwillingness or an inability to continue with business may bring about __ of the partnership.
termination
A close corporation is one:
that has a small number of stockholders
A written partnership agreement typically specifies the following except:
that the partnership will be established under federal or state law
In a sole proprietorship, the owner is:
the business
Which of the following are not required to be in a certificate of limited partnership:
the business positions to be held by each partner
To create a corporation:
the corporations articles of incorporation are filed with the appropriate officer of the state
Corporations have existed for centuries, but the modern "liberal" general incorporation statues were first passed in:
the late 1800's the 1930s
A disadvantage of the sole proprietorship form is often:
the limited alternatives for raising financial capital
Under the Uniform Limited Partnership Act, a written partnership agreement must include
the name of the business and the type or character of the business and the contribution of each partner
A disadvantage of the sole proprietorship form is often:
the owner is personally liable for all the business debts
In Ironite Products v. Samuel's, Where a major shareholder (Samuel) of Ironite sued, contending the bylaws had been violated, the appeals court held that:
there was no fraud, the directors followed the rules, so he had no suit The bylaws had not been violated because the companies bylaws clearly sanctioned the board of directors to manage the business and affairs of the company
Shareholders of a corporation:
vote on matters that may effect a change in the corporation's structure
The dissolution of a partnership occurs:
when an event takes place that precludes the partners from continuing in business
If a shareholder supplies needed material to the business then he:
will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor
The ____ of partnerships affairs involves completing any unfinished business and then collecting and distributing the partnerships assets.
winding up
