WALBCH12MC

When a court holds shareholders personally liable for corporate debts it is said to be: a. "piercing the corporate veil " b. "opening the corporate veil" c. "closing the corporate veil" d. "tearing the corporate veil" e. "cutting the corporate veil"

a. "piercing the corporate veil

______ are those with stock traded on a stock exchange and, therefore, are likely to have many shareholders. a. Publicly held corporations b. Privately held corporations c. Close corporations d. Real corporations e. Traded corporations

a. Publicly held corporations

Double taxation on profits is: a. a disadvantage to the corporate form of organization b. an advantage to the corporate form of organization c. an incentive for governments to lower sales taxes for corporations d. a driving force behind the trend of businesses moving overseas e. a clever economic strategy

a. a disadvantage to the corporate form of organization

In most circumstances, a partnership is now treated as: a. a legal entity b. a special entity with no ability to sue or be sued c. a proxy d. a sole proprietorship e. none of the other choices are correct

a. a legal entity

State regulation of franchises is typically conducted by: a. a state attorney general b. county prosecutors c. state chartering offices d. state examining boards e. state FTCs

a. a state attorney general

Electing a board of directors, enacting the corporation's bylaws, and issuing the corporation's stock are all things that occur: a. after the state has issued the corporation's certificate of incorporation b. before the state has issued the corporation's certificate of incorporation c. before the state has issued the corporation's articles of incorporation d. before the application for a certificate of incorporation e. these things can occur at anytime

a. after the state has issued the corporation's certificate of incorporation

A corporation in which the shares are held by one shareholder or a small group of shareholders and the stock is not actively traded is a: a. close corporation b. small corporation c. limited corporation d. shared corporation e. nonprofit corporation

a. close corporation

Sales of _____and ______can be difficult because determining the market value of the asset may be difficult. a. close corporation; sole proprietorship b. close corporation; double proprietorship c. close corporation; publicly traded corporation d. sole proprietorship; publicly traded corporation e. sole proprietorship; double corporation

a. close corporation; sole proprietorship

A reason the corporate status is often chosen is: a. corporations have the status of a legal person b. the Civil Rights Act of 1964 does not apply to corporations c. shareholders have the right to instruct management d. directors are immune from liability suits e. none of the other choices are true

a. corporations have the status of a legal person

With perpetual existence, the death or retirement of a shareholder: a. does not bring about the termination of the corporation b. brings about the termination of the corporation c. brings about the termination of the corporation in a five year period d. brings about the termination of the corporation if the shareholder had more than a 10% share e. brings about the termination of the corporation if the shareholder had more than a 30% share

a. does not bring about the termination of the corporation

_____requires that directors of a corporation place the interests of the corporation before their own interests. a. fiduciary duty of loyalty b. duty of care c. fiscal duty of loyalty d. real duty of loyalty e. preferential duty

a. fiduciary duty of loyalty

Compared to most other countries, to start a business in the U.S.: a. generally easier b. is easier than in low-income countries, but harder than in high-income countries c. is easier than in high-income countries, but harder than in low-income countries d. is generally more difficult e. is about the same as in other countries

a. generally easier

When a court "pierces the corporate veil" it: a. holds shareholders personally liable for corporate debts b. holds the board of directors jointly and severally liable c. provides the chief financial officer of the corporation with limited liability d. sanctions the under capitalization of the corporation e. provides partial protection from corporation debts

a. holds shareholders personally liable for corporate debts

A_____is a business organization that is treated like a corporation for liability purposes but like a partnership for federal tax purposes. a. limited liability company b. limited liability corporation c. restricted liability company d. no liability company e. nonprofit company

a. limited liability company

Dissolution of a corporation: a. may be voluntary or involuntary b. is always voluntary c. is never voluntary d. cannot be voluntary in some states e. cannot be involuntary in some states

a. may be voluntary or involuntary

The_____ , which is required by the Franchise Rule, enables prospective investors to learn about the background of the business. a. offering circular b. offering document c. offering disclosure d. circular offering e. circular document

a. offering circular

The_____of a limited liability company establishes the company's method of management, allocation of profits and losses among members, restrictions on the transfer of membership interests, and the process to be followed in dissolving the company. a. operating agreement b. licensing agreement c. management agreement d. articles of operation e. charter

a. operating agreement

The franchisee has the right to sell the product of the parent company in which category of franchise: a. product distributorship b. trademark or trade-name licensing c. business format franchising d. sale format franchising e. all of the other specific choices are correct

a. product distributorship

A ______terminates with the death or incapacity of the proprietor. a. sole proprietorship b. double corporation c. limited liability corporation d. corporate corporation e. partnership

a. sole proprietorship

Franchises may be terminated by: a. the bankruptcy of the franchisee b. the failure of the franchisor to submit to financial inspection by franchisees c. the franchisor at any time, at will d. all of the other choices e. none of the other choices

a. the bankruptcy of the franchisee

If a shareholder supplies needed material to the business then he: a. will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor b. will not officially become a creditor of the corporation, but will enjoy the same rights of recovery against the corporation as any other creditor c. will be removed from the corporation d. will be forced to sell his shares in the company e. will become a creditor of the corporation, but will not enjoy the same rights of recovery against the corporation as any other creditor

a. will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor

If a shareholder works for the business then he: a. will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor b. will not officially become a creditor of the corporation, but will enjoy the same rights of recovery against the corporation as any other creditor c. will be removed from the corporation d. will be forced to sell his shares in the company e. will become a creditor of the corporation, but will not enjoy the same rights of recovery against the corporation as any other creditor

a. will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor

Unlike a corporation: a. a partnership pays high income taxes on its income b. a partnership pays no income taxes on its income c. a partnership cannot lose money in a bankruptcy suit d. a partnership cannot have more than two partners e. a partnership has no duty to creditors before investors

b. a partnership pays no income taxes on its income

Limited liability is: a. a disadvantage to the corporate form of organization b. an advantage to the corporate form of organization c. an incentive for governments to lower sales taxes for corporations d. a driving force behind the trend of businesses moving overseas e. a clever economic strategy

b. an advantage to the corporate form of organization

The company name, the address of the company or its registered agent, the names and addresses of company members and whether any members are to be liable for company debts are all included in a limited liability company's: a. articles of institution b. articles of organization c. articles of incorporation d. articles of sale e. articles of administration

b. articles of organization

The Franchise Rule requires that the offering circular is given to prospective franchisees: a. at least 5 days before any money changes hands b. at least 10 days before any money changes hands c. on the day the contract is to be signed d. within 5 days of payment e. after 50% of the money changes hands

b. at least 10 days before any money changes hands

Directors are under a______to conduct themselves on behalf of the corporation as a reasonably prudent person in the conduct of personal business affairs. a. duty of reasonability b. duty of care c. duty of management d. duty of morality e. duty of profit

b. duty of care

A corporation is recognized under both federal and state law as a "person" and: a. enjoys all of the same rights and privileges accorded to U.S. citizens in about half the states b. enjoys some of the same rights and privileges accorded U.S. citizens c. enjoys none of the same rights and privileges accorded to U.S. citizens d. enjoys all of the same rights and privileges accorded to U.S. citizens e. none of the other choices are correct

b. enjoys some of the same rights and privileges accorded U.S. citizens

The Franchise Rule requires which of the following: a. franchisees have the right to have their money returned within 30 days b. franchisees must be given the offering circular at least 10 days before purchase c. franchisors must be registered with the FTC before selling franchises d. franchisees have the right to have their money returned within 30 days and must be given the offering circular at least 10 days before purchase e. franchisees have the right to have their money returned within 30 days and given the offering circular at least 10 days before purchase and franchisors must be registered with the FTC before selling franchises

b. franchisees must be given the offering circular at least 10 days before purchase

A limited liability company: a. is chartered by the Securities and Exchange Commission b. has the liability of a corporation c. is taxed like a corporation d. is chartered by the Securities and Exchange Commission and has the liability of a corporation e. is taxed like and has the liability of a corporation

b. has the liability of a corporation

Shareholders of a corporation have: a. no right to see the corporation's books and records b. limited rights to see the corporation's books and records c. no rights to see the corporation's books and records in some states, but not others d. limited rights to see the corporation's books and records in some states, but not others e. none of the other choices are correct

b. limited rights to see the corporation's books and records

Usually the members of a limited liability company: a. may transfer membership interests without the consent of the other members b. may not transfer membership interests without the consent of the other members c. may not know each other d. must know each other for at least a year before the formation of the company e. none of the other choices are correct

b. may not transfer membership interests without the consent of the other members

An auto dealer or gas station franchise would have: a. fewer rights than a franchise like McDonald's b. more rights than a franchise like McDonald's c. exactly the same rights as a franchise like McDonald's d. different, but equal, rights as a franchise like McDonald's e. none of the other choices are correct

b. more rights than a franchise like McDonald's

Most limited liability companies have statues that state that: a. only one member will be personally liable for the debts of the company b. no member or manager will be personally liable for the debts of the company c. no more than two members or managers will be personally liable for the debts of the company d. all members and managers will be personally liable for the debts of the company e. none of the other choices are correct

b. no member or manager will be personally liable for the debts of the company

Unlike a corporation, a limited liability company is: a. allowed perpetual life b. not allowed perpetual life c. allowed to exist for more than five years d. not allowed to exist for more than five years e. none of the other choices are correct

b. not allowed perpetual life

The business judgment rule: a. is applied when directors of a corporation act negligently b. protects directors and managers of a corporation who have made honest mistakes in judgment c. is used by courts to impose strict liability on directors and managers when violated d. protects directors and managers of a corporation who have made honest mistakes in judgment and is used by courts to impose strict liability on directors and managers when violated e. none of the other choices

b. protects directors and managers of a corporation who have made honest mistakes in judgment

California was the first state to: a. allow franchises b. regulate franchises c. ban franchises d. tax franchises e. none of the other choices are correct

b. regulate franchises

At a shareholder meeting, important corporate business is presented to the shareholders in the form of ____ which shareholders vote to approve or disapprove. a. statements b. resolutions c. quorums d. bylaws e. contracts

b. resolutions

The board of directors of a corporation are elected by: a. top managers b. shareholders c. current board members d. the president e. all of the other choices have equal votes

b. shareholders

A corporation consists of legally distinct groups, not including: a. shareholders b. stakeholders c. directors d. managers e. all of the other choices are included

b. stakeholders

A franchise agreement may not include: a. restrictions on territorial rights b. the right of parent company to terminate agreement any time without compensation c. a fixed payment up front (all payments must be royalties based on sales) d. controls on the use of the trade name or trademarks involved e. all of the other choices may be included

b. the right of parent company to terminate agreement any time without compensation

The New York Stock Exchange is an example of a stock exchange where: a. the stock of sole proprietorships can be traded b. the stock of public corporations can be traded c. the stock of private corporations can be traded d. the stock of public corporations cannot be traded e. the stock of public corporations can be sold but not bought

b. the stock of public corporations can be traded

The profits of partnerships are taxed: a. the same as corporations b. to each partner personally as agreed upon or shared equally c. both at the partnership level and to each partner individually d. not at all, since they are exempt e. none of the other choices

b. to each partner personally as agreed upon or shared equally

The franchisee has a license to market the company's brands, such as Coca-Cola in which category of franchise: a. product distributorship b. trademark or trade-name licensing c. business format franchising d. sale format franchising e. all of the other specific choices are correct

b. trademark or trade-name licensing

The _______refers to the ability of an owner in a business venture to sell or pass that interest to others. a. immovability of ownership interests b. transferability of ownership interests c. removability of ownership interests d. redistributionability of ownership interests e. mobility of ownership interests

b. transferability of ownership interests

A(n) _______ of a corporation involves approval of the shareholders and the board of directors. a. involuntary b. voluntary c. immediate d. unwarranted e. abstract

b. voluntary

Many states now allow groups of doctors in practice together to form a particular legal entity allowed by statute called: a. a limited liability company b. a cooperative c. a professional corporation d. a limited partnership e. a physician association

c. a professional corporation

The governing committee of a corporation is the: a. board of presidents b. president c. board of directors d. board of shareholders e. board of managers

c. board of directors

Which of the following is characteristic of a successful franchise: a. a trademark b. a uniform product or service c. both a and b are correct d. neither a nor b is correct e. an international market

c. both a and b are correct

The franchisee follows the business model set out by the parent company, such as McDonald's in which category of franchise: a. product distributorship b. trademark or trade-name licensing c. business format franchising d. sale format franchising e. all of the other specific choices are correct

c. business format franchising

After reviewing a corporation's application, the state issues a: a. certificate of business b. certificate of taxes c. certificate of incorporation d. certificate of institution e. certificate of corporation

c. certificate of incorporation

Which form of business incurs double taxation: a. limited partnerships b. LLCs c. corporations d. proprietorships e. general partnerships

c. corporations

The sale of shares in a closed corporation is similar to the sale of a sole proprietorship because: a. the shares are traded on the open market b. numerous shareholders make transfers difficult c. determining a market value of the asset may be difficult d. government approval is necessary for a transfer e. duration is an important issue

c. determining a market value of the asset may be difficult

Which of the following is not true about corporate directors? a. the initial board is often specified in the articles of incorporation b. directors are subject to a fiduciary duty of loyalty c. directors must always act to preserve the corporation d. directors may be removed from office for breach of duty e. all of the other choices are true

c. directors must always act to preserve the corporation

A board of directors' fiduciary duty of loyalty requires that: a. directors are morally upstanding people in their personal lives b. directors do whatever is necessary to make a profit c. directors place the interests of the corporation before their own interests d. directors place their own interests before the interests of the corporation e. none of the other choices are correct

c. directors place the interests of the corporation before their own interests

A business's____refers to its ability to continue to operate in the event of the death, retirement, or other incapacity of an owner of the business. a. perpetuity b. lifetime c. duration d. experience e. continuation

c. duration

The document that sets forth the rights and obligations of the franchisor and franchisee is known as the: a. franchise contract b. franchise list c. franchise agreement d. franchise document e. agreement of franchise

c. franchise agreement

With respect to transferability of ownership interests, a sole proprietor may: a. not transfer her interests b. may only transfer her interest with approval of the state c. freely transfer her interests d. transfer her interests to family members only e. transfer her interests after paying a capital gains tax

c. freely transfer her interests

The shareholders of a corporation generally have the right(s) to: a. instruct top management on corporate operations b. hire managers of the corporation c. give a third party the right to vote their shares by proxy d. instruct top management on corporate operations and hire managers of the corporation e. instruct top management on corporate operations and hire managers of the corporation and give a third party the right to vote their shares by proxy

c. give a third party the right to vote their shares by proxy

A shareholder's relation to creditors of the corporation is generally that the shareholder: a. is a secured creditor b. is an unsecured creditor c. has no relation to creditors d. is a third-party beneficiary to creditors e. none of the other choices

c. has no relation to creditors

Unless its articles of incorporation provide otherwise, a corporation: a. lasts for twenty years b. lasts for fifty years c. lasts perpetually d. lasts as long as state law allows; the life varies among the states e. lasts as long as the IRS permits

c. lasts perpetually

A corporation's board of directors hires ______to run the business. a. specialists b. lay persons c. managers d. supervisors e. directors

c. managers

The manager of a limited liability company: a. must be related to the members b. must have worked for the company for at least five years c. need not be a member of the company d. must be an American citizen e. must hold a law degree

c. need not be a member of the company

A corporation separates: a. ownership from responsibility b. ownership from profit c. ownership from control d. control from losses e. control from profits

c. ownership from control

Unless its articles of incorporation provide for a specified period of duration, a corporation has: a. total existence b. permanent existence c. perpetual existence d. final existence e. existence of perpetual duration

c. perpetual existence

Legally, the board of directors is the _____of a corporation. a. principle b. leader c. principal d. judge e. owner

c. principal

Which of the following statements about a corporation is true? Corporations are not entitled to constitutionally protected: a. free speech b. equal protection c. privileges against self-incrimination d. freedom from unreasonable searches and seizures e. none of the other choices are true

c. privileges against self-incrimination

At a shareholder meeting, there must be: a. a manager b. at least three company employees c. quorum d. at least 1/3 of the total shares present e. none of the other choices are correct

c. quorum

The owners of a corporation are called: a. partners b. officers c. shareholders d. principals e. none of the other choices

c. shareholders

The Franchise Rule requires that the following information must be provided except: a. the names and addresses of other franchisees b. an audited financial statement of the franchisor's operation c. the background and experience of all existing franchisees d. the responsibilities that the parties will have to each other under the agreement e. all of the other choices are required

c. the background and experience of all existing franchisees

The rules that regulate and govern the internal operations of a corporation are known as: a. the certificate of incorporation b. the bond c. the bylaws d. statutes of business e. the corporate constitution

c. the bylaws

A potential drawback of sole proprietorships and partnerships is that the parties involved have: a. limited financial liability b. only corporate liability c. unlimited liability d. partial protection from creditors for business debts e. only corporate liability and partial protection from creditors for business debts

c. unlimited liability

There are two types of dissolution of a corporation: a. abstract and remote b. real and abstract c. voluntary and involuntary d. finite and indefinite e. none of the other choices

c. voluntary and involuntary

Shareholders, the board of directors and the managers are the three major groups that make up: a. a limited partnership b. a sole proprietorship c. a joint partnership d. a corporation e. a nonprofit organization

d. a corporation

To hold a shareholder meeting, which criteria must be met? a. a quorum of shareholders must be represented b. advance notice of the meeting must be given c. a state representative must be in attendance d. a quorum of shareholders must be represented and advance notice of the meeting must be given e. all of the other choices

d. a quorum of shareholders must be represented and advance notice of the meeting must be given

Which of the following is a category of franchise: a. product distributorship b. trademark or trade-name licensing c. business format franchising d. all of the other specific choices are correct e. both a and b, but not c, are correct

d. all of the other specific choices are correct

Which of the following may be specified by the franchisor: a. requirements regarding record keeping b. requirements regarding operating hours c. requirements regarding advertising d. all of the other specific choices are correct e. none of the other specific choices are correct

d. all of the other specific choices are correct

Which of the following occur after the state has issued a corporation its certificate of incorporation: a. electing a board of directors b. enacting the corporation's bylaws c. issuing the corporation's stock d. all of the other specific choices are correct e. none of the other specific choices are correct

d. all of the other specific choices are correct

Whom of the following must follow a corporation's bylaws in conducting corporate activities: a. shareholders b. directors c. officer of the corporation d. all of the other specific choices are correct e. none of the other specific choices are correct

d. all of the other specific choices are correct

Involuntary dissolution of a corporation is usually caused by: a. bankruptcy b. an act of Congress c. fraud in the establishment of the corporation d. bankruptcy or fraud in the establishment of the corporation e. bankruptcy or fraud in the establishment of the corporation or an act of Congress

d. bankruptcy or fraud in the establishment of the corporation

Before franchises may be sold, the parent company must: a. register with the SEC under the 1933 Securities Act b. register with the SEC under the Investment Company Act c. register with the CFTC Franchise Offering Rule of 1990 d. comply with FTC regulations and perhaps other state regulations e. none of the other choices

d. comply with FTC regulations and perhaps other state regulations

The process of settling the accounts and liquidating the assets of a corporation is called: a. termination b. certification c. transference d. dissolution e. none of the other choices

d. dissolution

To get the right to sell goods or services associated with a franchisor's trademark, trade name or trade dress, the franchisee must pay a(n): a. legal fee b. employment fee c. corporation fee d. franchise fee e. franchise allotment

d. franchise fee

Which of the following have unlimited liability for debts of their business? a. limited partners b. general partners c. sole proprietors d. general partners and sole proprietors e. general partners, limited partners, and sole proprietors

d. general partners and sole proprietors

States regulation of the sale of franchises: a. is prohibited because of federal regulation b. is so weak as to be irrelevant c. duplicates federal regulation, allowing enforcement at the state level d. goes beyond federal requirements in California and some other states e. replaces federal requirements in the states that it exists

d. goes beyond federal requirements in California and some other states

A limited liability company: a. is taxed like a partnership b. has the liability of a corporation c. is taxed like a corporation d. is taxed like a partnership and has the liability of a corporation e. is taxed like a corporation and has the liability of a corporation

d. is taxed like a partnership and has the liability of a corporation

Which form of business incurs double taxation: a. limited partnerships b. LLCs c. proprietorships d. none of the other choices e. all of the other specific choices

d. none of the other choices

About _____of retail sales in the U.S. takes place in franchise operations. a. one fourth b. two thirds c. one half d. one third e. 90%

d. one third

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. a. charter b. shares c. resolution d. proxy e. none of the other choices

d. proxy

A close corporation is one: a. with a pending application for incorporation b. with stock that can only be traded with other corporations c. that is in the process of dissolution d. that has a small number of stockholders e. that issues only preferred stock

d. that has a small number of stockholders

The key elements of a franchise agreement include: a. the use of franchise manual b. the schedule of meal times for employees c. the fee and royalty payments d. the use of franchise manual and the fee and royalty payments e. the use of franchise manual and the fee and royalty payments and the schedule of meal times for employees

d. the use of franchise manual and the fee and royalty payments

The relation of the parties taking part in a limited liability company are: a. there are two or more members b. members have unlimited liability for business debts c. the parties have a membership interest in the business d. there are two or more members and the parties have a membership interest in the business e. there are two or more members, members have unlimited liability for business debts, and the parties have a membership interest in the business

d. there are two or more members and the parties have a membership interest in the business

Shareholders of a corporation: a. manage the corporation b. delegate responsibility for management to hired managers c. elect all vice presidents of the corporation d. vote on matters that may effect a change in the corporation's structure e. issue the employment rules of a corporation

d. vote on matters that may effect a change in the corporation's structure

The articles of organization filed for a LLC must include: a. whether it will be managed by its members or by a manager b. the classes of stock to be issued c. the names and addresses of members d. whether it will be managed by its members or by a manager and the names and addresses of members e. whether it will be managed by its members or by a manager, the classes of stock to be issued, and the names and addresses of members

d. whether it will be managed by its members or by a manager and the names and addresses of members

Factors that influence the choice of a particular form of business organization may include: a. capital requirements b. duration c. tax rates d. transferability of interests e. all of the other choices

e. all of the other choices

A franchise agreement may not include: a. restrictions on territorial rights b. controls on the use of the trade name or trademarks involved c. a fixed payment up front (all payments must be royalties based on sales) d. a manual that controls the details of business operations e. all of the other choices may be included

e. all of the other choices may be included

The disclosure document that franchisors must give to prospective franchise buyers is not required to include which of the following information? a. an audited financial statement of the franchisor b. the background and experience of the key executives c. the names, addresses, and phone numbers of other franchisees d. list of responsibilities of the franchisor and the franchisee once the deal is made e. all of the other choices must be provided

e. all of the other choices must be provided

Which of the following is included in the business format category of franchises: a. restaurants b. nonfood retailers c. business services d. rental companies e. all of the other specific choices are correct

e. all of the other specific choices are correct

To create a limited liability company, creators must produce: a. a corporate charter b. a partnership agreement c. nothing; they are like sole proprietorships d. shares of stock e. articles of organization

e. articles of organization

A limited liability company may be terminated: a. by the retirement of a member b. by the death of a member c. by the consent of all members d. by the expulsion of a member e. by any of the other choices

e. by any of the other choices

The termination of a corporation: a. is conducted in two phases: dissolution and winding up b. prevents the corporation from taking on any new business c. may be brought about either voluntarily or involuntarily d. is conducted in two phases: dissolution and winding up, and prevents the corporation from taking on any new business e. is conducted in two phases: dissolution and winding up, and prevents the corporation from taking on any new business and may be brought about either voluntarily or involuntarily

e. is conducted in two phases: dissolution and winding up, and prevents the corporation from taking on any new business and may be brought about either voluntarily or involuntarily

A close corporation is one: a. with a pending application for incorporation b. with stock that can only be traded with other corporations c. that is in the process of dissolution d. that issues only preferred stock e. none of the other choices

e. none of the other choices

A franchise is sold by: a. a franchisor b. a franchisee c. a franchise director d. the Franchise Trade Association e. none of the other choices

e. none of the other choices

A shareholder's relation to creditors of the corporation is generally that the shareholder: a. is a secured creditor b. is an unsecured creditor c. holds a possessory lien d. is a third-party beneficiary to creditors e. none of the other choices

e. none of the other choices

Before franchises may be sold, the parent company must: a. register with the SEC under the 1933 Securities Act b. register with the SEC under the Investment Company Act c. register with the CFTC Franchise Offering Rule of 1990 d. be approved by the Federal Trade Commission e. none of the other choices

e. none of the other choices

Legally, shareholders of a corporation must: a. manage the corporation b. delegate responsibility for management to hired managers c. elect all vice presidents of the corporation d. issue the employment rules of a corporation e. none of the other choices

e. none of the other choices

Many states now allow groups of doctors in practice together to form a particular legal entity allowed by statute called: a. a limited liability company b. a cooperative c. a physician association d. a limited partnership e. none of the other choices

e. none of the other choices

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. a. charter b. shares c. resolution d. liens e. none of the other choices

e. none of the other choices

States regulation of the sale of franchises: a. is prohibited because of federal regulation b. is so weak as to be irrelevant c. duplicates federal regulation, allowing enforcement at the state level d. replaces federal requirements in the states that it exists e. none of the other choices

e. none of the other choices

The board of directors of a corporation are elected by: a. top managers b. the president c. current board members d. the president and current board members jointly e. none of the other choices

e. none of the other choices

The rules that regulate and govern the internal operations of a corporation are known as: a. the certificate of incorporation b. the bond c. the corporate constitution d. statutes of business e. none of the other choices

e. none of the other choices

The sale of shares in a closed corporation is similar to the sale of a sole proprietorship because: a. the shares are traded on the open market b. numerous shareholders make transfers difficult c. there is limited life in such corporations d. government approval is necessary for a transfer e. none of the other choices

e. none of the other choices

There are two types of dissolution of a corporation: a. abstract and remote b. real and abstract c. federal and state d. finite and indefinite e. none of the other choices

e. none of the other choices

To create a limited liability company, creators must produce: a. a corporate charter b. a partnership agreement c. nothing; they are like sole proprietorships d. shares of stock e. none of the other choices

e. none of the other choices

Unless its articles of incorporation provide otherwise, a corporation: a. lasts for twenty years b. lasts for fifty years c. lasts as long as the IRS permits d. lasts as long as state law allows; life varies among the states e. none of the other choices

e. none of the other choices

When a court "pierces the corporate veil" it: a. provides partial protection from corporation debts b. holds the board of directors jointly and severally liable c. provides the chief financial officer of the corporation with limited liability d. sanctions the under capitalization of the corporation e. none of the other choices

e. none of the other choices

Which of the following is not true about corporate directors? a. the initial board is often specified in the articles of incorporation b. directors are subject to a fiduciary duty of loyalty c. directors must report to the president d. directors may be removed from office for breach of duty e. none of the other choices

e. none of the other choices

With respect to transferability of ownership interests, a sole proprietor may: a. not transfer her interests b. may only transfer her interest with approval of the state c. transfer her interests after paying a capital gains tax d. transfer her interests to family members only e. none of the other choices

e. none of the other choices

A business's_____refers to its ability to continue to operate in the event of the death, retirement, or other incapacity of an owner of the business. a. perpetuity b. lifetime c. continuation d. experience e. none of the other choices are correct

e. none of the other choices are correct

A corporation in which the shares are held by one shareholder or a small group of shareholders and the stock is not actively traded is a: a. nonprofit corporation b. small corporation c. limited corporation d. shared corporation e. none of the other choices are correct

e. none of the other choices are correct

A_______is a business organization that is treated like a corporation for liability purposes but like a partnership for federal tax purposes. a. nonprofit company b. limited liability corporation c. restricted liability company d. no liability company e. none of the other choices are correct

e. none of the other choices are correct

About _____of retail sales in the U.S. takes place in franchise operations. a. one fifth b. two thirds c. one half d. 90% e. none of the other choices are correct

e. none of the other choices are correct

After reviewing a corporation's application, the state issues a: a. certificate of business b. certificate of taxes c. certificate of corporation d. certificate of institution e. none of the other choices are correct

e. none of the other choices are correct

At a shareholder meeting, important corporate business is presented to the shareholders in the form of______ which shareholders vote to approve or disapprove. a. statements b. contracts c. quorums d. bylaws e. none of the other choices are correct

e. none of the other choices are correct

Directors are under a____ to conduct themselves on behalf of the corporation as a reasonably prudent person in the conduct of personal business affairs. a. duty of reasonability b. duty of profit c. duty of management d. duty of morality e. none of the other choices are correct

e. none of the other choices are correct

Dissolution of a corporation: a. cannot be involuntary in some states b. is always voluntary c. is never voluntary d. cannot be voluntary in some states e. none of the other choices are correct

e. none of the other choices are correct

Electing a board of directors, enacting the corporation's bylaws, and issuing the corporation's stock are all things that occur: a. these things can occur at anytime b. before the state has issued the corporation's certificate of incorporation c. before the state has issued the corporation's articles of incorporation d. before the application for a certificate of incorporation e. none of the other choices are correct

e. none of the other choices are correct

If a shareholder supplies needed material to the business then he: a. will become a creditor of the corporation, but will not enjoy the same rights of recovery against the corporation as any other creditor b. will not officially become a creditor of the corporation, but will enjoy the same rights of recovery against the corporation as any other creditor c. will be removed from the corporation d. will be forced to sell his shares in the company e. none of the other choices are correct

e. none of the other choices are correct

Professional corporations are now allowed: a. in all states b. in about half the states c. in some states d. in a few of the more business friendly states e. none of the other choices are correct

e. none of the other choices are correct

Sales of _____and ______can be difficult because determining the market value of the asset may be difficult. a. sole proprietorship; double corporation b. close corporation; double proprietorship c. close corporation; publicly traded corporation d. sole proprietorship; publicly traded corporation e. none of the other choices are correct

e. none of the other choices are correct

Shareholders, the board of directors and the managers are the three major groups that make up: a. a limited partnership b. a sole proprietorship c. a joint partnership d. a nonprofit organization e. none of the other choices are correct

e. none of the other choices are correct

The New York Stock Exchange is an example of a stock exchange where: a. the stock of sole proprietorships can be traded b. the stock of public corporations can be sold but not bought c. the stock of private corporations can be traded d. the stock of public corporations cannot be traded e. none of the other choices are correct

e. none of the other choices are correct

The _______refers to the ability of an owner in a business venture to sell or pass that interest to others. a. immovability of ownership interests b. mobility of ownership interests c. removability of ownership interests d. redistributionability of ownership interests e. none of the other choices are correct

e. none of the other choices are correct

The company name, the address of the company or its registered agent, the names and addresses of company members and whether any members are to be liable for company debts are all included in a limited liability company's: a. articles of institution b. articles of administration c. articles of incorporation d. articles of sale e. none of the other choices are correct

e. none of the other choices are correct

The governing committee of a corporation is the: a. board of presidents b. president c. board of managers d. board of shareholders e. none of the other choices are correct

e. none of the other choices are correct

The manager of a limited liability company: a. must be related to the members b. must have worked for the company for at least five years c. must hold a law degree d. must be an American citizen e. none of the other choices are correct

e. none of the other choices are correct

The______of a limited liability company establishes the company's method of management, allocation of profits and losses among members, restrictions on the transfer of membership interests, and the process to be followed in dissolving the company. a. charter b. licensing agreement c. management agreement d. articles of operation e. none of the other choices are correct

e. none of the other choices are correct

Unless its articles of incorporation provide for a specified period of duration, a corporation has: a. total existence b. permanent existence c. existence of perpetual duration d. final existence e. none of the other choices are correct

e. none of the other choices are correct

With perpetual existence, the death or retirement of a shareholder: a. brings about the termination of the corporation if the shareholder had more than a 30% share b. brings about the termination of the corporation c. brings about the termination of the corporation in a five year period d. brings about the termination of the corporation if the shareholder had more than a 10% share e. none of the other choices are correct

e. none of the other choices are correct

______ are those with stock traded on a stock exchange and, therefore, are likely to have many shareholders. a. Traded corporations b. Privately held corporations c. Close corporations d. Real corporations e. none of the other choices are correct

e. none of the other choices are correct

_______requires that directors of a corporation place the interests of the corporation before their own interests. a. preferential duty b. duty of care c. fiscal duty of loyalty d. real duty of loyalty e. none of the other choices are correct

e. none of the other choices are correct

According to the IRS, a limited liability company must exist: a. in perpetuity b. only for ten years c. only for twenty years d. for no longer than fifty years e. none of these

e. none of these

Directors of a corporation may be: a. removed for cause b. reprimanded but not removed during term in office c. liable for a breach of duty d. reprimanded but not removed during term in office but held liable for breach of duty e. removed for cause and be liable for a breach of duty

e. removed for cause and be liable for a breach of duty

A corporation consists of: a. shareholders b. board of directors c. officers or managers d. shareholders and board of directors e. shareholders, board of directors, and officers or managers

e. shareholders, board of directors, and officers or managers

If a partner assigns his interests in a partnership: a. the partnership is terminated b. the new person does not automatically become a partner c. the partnership continues d. the partnership is terminated and the new person does not automatically become a partner e. the new person does not automatically become a partner and the partnership continues

e. the new person does not automatically become a partner and the partnership continues

The articles of organization filed for a LLC must include: a. whether it will be managed by its members or by a manager b. the address of the company or its registered agent c. whether any members are to be liable for company debts d. whether it will be managed by its members or by a manager and the address of the company or its registered agent e. whether it will be managed by its members or by a manager and the address of the company or its registered agent and whether any members are to be liable for company debts

e. whether it will be managed by its members or by a manager and the address of the company or its registered agent and whether any members are to be liable for company debts

During the course of a partnership's winding-up process, the partners owe each other: a. a duty to disclose all finances of the partnership b. a duty to compete fully c. a duty to refrain from termination d. a duty of discounting e. a duty to mitigate

a. a duty to disclose all finances of the partnership

A limited partnership is usually dissolved by the bankruptcy of: a. a general partner, but not a limited partner b. either a general partner or a limited partner c. a limited partner, but not a general partner d. the secretary of state e. neither a general partner nor a limited partner

a. a general partner, but not a limited partner

Which of the following apply to a sole proprietorship: a. a person is in business for himself b. no government license usually required c. no tax return required in the name of the business d. a person is in business for himself and no government license usually required e. none of the other choices

a. a person is in business for himself

A general partnership is: a. an association of two or more persons to carry on a business as co-owners for a profit b. an association of two or more companies that help each other with business, but do not share profits c. an understanding between a supplier and a distributor d. a merger of two corporations e. none of the other choices are correct

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

A complete termination comes about only after the partnership has been ______and its affairs have been wound up. a. dissolved b. disillusioned c. standardized d. reorganized e. finalized

a. dissolved

Limited partners are investors who: a. may not participate in management of the business b. are liable for all debts of the limited partnership c. may take an active role in the management of the business d. all of the other specific choices e. none of the other choices

a. may not participate in management of the business

IIn a sole proprietorship, the capital usually: a. must come from the owner's own resources or be borrowed b. comes from the government c. comes from investors d. comes from the stock market e. comes from taxes

a. must come from the owner's own resources or be borrowed

The articles of incorporation usually include all of the following except: a. name of the CEO b. address of the corporation c. purpose of the business d. classes of stock to be issued e. all of the other choices are included

a. name of the CEO

A partnership can begin with either a(n) ______or a(n) _____ a. oral agreement; implied agreement b. oral agreement; false agreement c. oral agreement; forced agreement d. implied agreement; default agreement e. implied agreement; loan agreement

a. oral agreement; implied agreement

There are _____ businesses in the United States. a. over 30 million b. under 20 million c. over 50 million d. less than 500,000 e. too many

a. over 30 million

The majority of businesses in the United States are: a. sole proprietorships b. non-taxable c. corporations d. non-profit e. partnerships

a. sole proprietorships

Today a corporation must be created according to: a. state law b. common law c. the Uniform Incorporation Act d. the U.P.A. e. federal statutory provisions

a. state law

Under traditional common law rules, if you wanted to sue a partnership you had to: a. sue each partner individually b. sue the partnership as a group c. sue the state on behalf of the partnership d. have the state sue the partnership e. wait until the partnership was incorporated to sue

a. sue each partner individually

The name and address of a corporation, the name and address of the corporation's registered agent, and the purpose of the business are all examples of things that are generally included in: a. the articles of incorporation b. the articles of sale c. the articles of business d. the articles of legitimacy e. the articles of profit

a. the articles of incorporation

In a sole proprietorship, the owner is: a. the business b. a corporation c. a subsidiary d. a partnership e. an amalgamation

a. the business

Which of the following is a right of a limited partner in a limited partnership: a. the right to see the partnership books b. the right to make hiring decisions c. the right to take an active role in managing the business d. both a and b are rights of a limited partner e. none of the other specific choices are rights of a limited partner

a. the right to see the partnership books

The dissolution of a partnership occurs: a. when an event takes place that precludes the partners from continuing in business b. during the process of completing any unfinished business of the partnership c. during the collection and distribution of the partnership's assets d. when a certificate of limited partnership is executed e. none of the other choices

a. when an event takes place that precludes the partners from continuing in business

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. a. Revised Uniform Proprietorship Act b. Revised Uniform Partnership Act c. Revised Real Partnership Act d. Revised Unified Partnership Act e. Revised Universal Partnership Act

b. Revised Uniform Partnership Act

Under traditional common law rules, a partnership: a. was always treated as a single legal entity b. generally was not treated as a single legal entity c. had the same legal personality as a corporation d. was forbidden under the law e. could only be formed with the consent of the state

b. generally was not treated as a single legal entity

In a sole proprietorship, profits are taxed to the: a. corporate owner of the proprietorship b. individual owner of the proprietorship c. general partners d. state e. none of the other choices

b. individual owner of the proprietorship

A certification of incorporation from the government: a. gives a business monopoly privileges b. is necessary for a corporation to be recognized legally c. must be obtained by all limited partnerships d. is necessary or a corporation to be recognized legally and must be obtained by all limited partnerships e. none of the other choices

b. is necessary for a corporation to be recognized legally

Which of the following is not true about a partnership? a. it must be owned by two or more people b. it is always an independent legal entity c. partners co-own the business d. partners share control over the business operation e. all of the other choices are true

b. it is always an independent legal entity

A business organization in which some of the partners are not liable for partnership debts is called a: a. no liability partnership b. limited liability partnership c. partial liability partnership d. local liability partnership e. unlimited liability partnership

b. limited liability partnership

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: a. proprietorship b. limited partnership c. cooperative d. general partnership e. none of the other choices

b. limited partnership

The articles of incorporation usually provide all of the following except: a. name of the corporation b. names of all shareholder c. name of the registered agent d. classes of stock being issued e. all of the other choices must be provided

b. names of all shareholder

In the final dispersal of the assets of the limited partnership, creditors' rights: a. do not precede partners' rights b. precede partners' rights c. are immaterial d. precede some precede partners' rights, but not others e. only precede general partners' rights

b. precede partners' rights

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. a. finalization b. termination c. composition d. revitalization e. retaliation

b. termination

A written partnership agreement typically specifies the following except: a. the ownership interests of the partners b. that the partnership will be established under federal or state law c. the name of the partnership business d. the procedures for dissolution of the partnership e. the method of accounting to be used

b. that the partnership will be established under federal or state law

Which of the following are not required to be in a certificate of limited partnership: a. the type or character of the business b. the business positions to be held by each partner c. the proportion of profits to be earned by each partner d. the business positions to be held by each partner and the proportion of profits to be earned by each partner e. the business positions to be held by each partner and the proportion of profits to be earned by each partner and the proportion of profits to be earned by each partner

b. the business positions to be held by each partner

Corporations have existed for centuries, but the modern "liberal" general incorporation statutes were first passed in: a. the late 1700s b. the late 1800s c. the 1930s d. the 1950s e. the 1960s

b. the late 1800s

A disadvantage of the sole proprietorship form is often: a. business profits are taxed to the owner personally b. the limited alternatives for raising financial capital c. the owner has sole responsibility for control, liabilities, and management d. the record keeping formalities of the business are within the owner's discretion e. none of the other choices

b. the limited alternatives for raising financial capital

A disadvantage of the sole proprietorship form is often: a. business profits are taxed to the owner personally b. the owner is personally liable for all the business debts c. the owner has sole responsibility for control, liabilities, and management d. the record keeping formalities of the business are within the owner's discretion e. none of the other choices

b. the owner is personally liable for all the business debts

Which of the following is a right of a limited partner in a limited partnership: a. the right to make hiring decisions b. the right to participate in the dissolution of the business c. the right to take an active role in managing the business d. both a and b are rights of a limited partner e. none of the other specific choices are rights of a limited partner

b. 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: a. Federal Partnership Act b. Robinson-Patman Act c. Uniform Partnership Act d. Partnership Termination Act e. Partnership Operation Act

c. Uniform Partnership Act

Partners in a partnership owe each other: a. direct interest responsibility b. a duty to contribute direct assets c. a fiduciary duty d. a duty of ordinary care e. none of the other choices

c. a fiduciary duty

Which of the following statement(s) is (are) true? a. a partnership may consist entirely of limited partners b. a limited partner may exercise control over the business in proportion to his interest in it c. a limited partnership must have at least one general partner d. all of the other specific choices are true e. none of the other choices

c. a limited partnership must have at least one general partner

General partners in a limited partnership: a. have no liability b. have limited liability c. are personally liable to the partnership's creditors d. are personally liable to the secretary of state e. are personally liable to the partnership's creditors only if they choose to be

c. are personally liable to the partnership's creditors

In most states a limited partnership does not have to file what information with the appropriate state official? a. name of the business b. names and addresses of all partners c. bankruptcy history of each partner d. the share of profits to be paid to each partner e. all of the other choices must be filed

c. bankruptcy history of each partner

The duty of partners to a partnership is: a. to elect one partner as managing partner b. to place the assets in a blind trust c. based on extraordinary trust and loyalty to the partnership d. to elect one partner as managing partner and is based on extraordinary trust and loyalty to the partnership e. to elect one partner as managing partner and to place the assets in a blind trust and is based on extraordinary trust and loyalty to the partnership

c. 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: a. after the general partners get theirs b. after the general partners, but before the creditors c. before general partners receive anything d. before creditors receive anything e. none of the other choices are correct

c. before general partners receive anything

Limited partners are similar to corporate shareholders in that: a. both have unlimited liability b. there is no liability for either c. both are liable to the extent of their investment d. there must be one general partner e. none of the other choices

c. both are liable to the extent of their investment

Dissolution of a partnership takes place, unless otherwise provided for by contract, in the following instances except: a. bankruptcy of a partner b. withdrawal of a partner c. change in financial condition of a partner d. death of a partner e. all of the other choices would require dissolution

c. change in financial condition of a partner

A _____requires that each partner act in good faith for the benefit of the partnership. a. partnership relationship b. contractual relationship c. fiduciary relationship d. contractual promise e. none of the other choices are correct

c. fiduciary relationship

The modern corporation was developed: a. in England in the Middle Ages b. in Italy during the Renaissance c. in the United States during the eighteenth century d. in Germany during the nineteenth century e. in New York during the early twentieth century

c. in the United States during the eighteenth century

In a limited partnership the______are investors who may not participate in managing the business. a. restricted partners b. general partners c. limited partners d. nonvoting partners e. real partners

c. limited partners

The business organization that has at least one general partner and other investors who have limited liability is a: a. corporation b. general partnership c. limited partnership d. limited liability company e. proprietorship

c. limited partnership

Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true? a. each partner has an equal voice in partnership management b. a majority vote controls ordinary business decisions c. only managing partners are fully responsible for debts of the partnership d. regardless of the amount invested in the partnership, each partner has an equal vote e. all of the other choices are true

c. only managing partners are fully responsible for debts of the partnership

In general, limited partners lose their limited liability status by: a. being a limited partner in another partnership b. denying association with the partnership c. participating in managerial decisions in the partnership d. being a partner in another partnership or by participating in managerial decisions in the partnership e. being a partner in another partnership or by participating in managerial decisions in the partnership or by denying association with the partnership

c. participating in managerial decisions in the partnership

The most common form of business organization is: a. joint venture b. partnership c. proprietorship d. corporation e. none of the other choices

c. proprietorship

The of partnership affairs involves completing any unfinished business and then collecting and distributing the partnership's assets. a. winding down b. resetting c. winding up d. terminating e. dissolution

c. winding up

A limited partnership is different from a general partnership because: a. a limited partnership can have only two people in active management b. there are limits to annual capital gains in limited partnership c. all partners in a limited partnership must actively participate in major managerial decisions d. a limited partnership may have only one general partner e. none of the other choices

d. a limited partnership may have only one general partner

A sole proprietorship comes into existence when: a. a person in business hires at least one employee b. two or more persons join together to work at a business c. a charter is received from the secretary of state d. a person begins to do business for herself e. when a federal tax identification number is issued for the business

d. a person begins to do business for herself

Which of the following could lead to the dissolution of a partnership: a. withdrawal of a partner b. death of a partner c. bankruptcy of a partner d. all of the other specific choices are correct e. none of the other specific choices are correct

d. all of the other specific choices are correct

Which of the following is a decision that would most likely require the consent of all partners: a. changing the nature of the partnership's business b. admitting new partners c. selling the business d. all of the other specific choices are correct e. none of the other specific choices are correct

d. all of the other specific choices are correct

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. a. certificate of incorporation b. proof of funding c. certificate of credit d. articles of incorporation e. documents of incorporation

d. articles of incorporation

Which of the following is a right of a limited partner in a limited partnership: a. the right to see the partnership books b. the right to participate in the dissolution of the business c. the right to take an active role in managing the business d. both a and b are rights of a limited partner e. none of the other specific choices are rights of a limited partner

d. both a and b are rights of a limited partner

Which of the following is a disadvantage of a sole proprietorship: a. business profits are taxed to the owner personally b. the owner is personally liable for all the business debts c. the limited alternatives for raising financial capital d. both b and c are disadvantages of a sole proprietorship e. both a and c are disadvantages of a sole proprietorship

d. both b and c are disadvantages of a sole proprietorship

A(n) _______is any name other than the name of the individual who owns the business. a. fake name b. illegitimate name c. false name d. fictitious name e. confusing name

d. fictitious name

Which of the following is not true about the termination of a limited partnership? a. the bankruptcy of a limited partner does not force termination b. the business may continue to operate during dissolution c. creditors' rights come before partners' rights to funds d. limited and general partners share assets equally at the same time after the creditors are paid e. all of the other choices are true

d. limited and general partners share assets equally at the same time after the creditors are paid

To create a corporation: a. articles of incorporation and an application must first be filed with the federal government b. the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states c. the incorporators must hold a public organization meeting, then file articles of incorporation d. the corporation's articles of incorporation are filed with the appropriate officer of the state e. none of the other choices

d. the corporation's articles of incorporation are filed with the appropriate officer of the state

A partnership can begin with: a. an implied agreement that can be inferred from the conduct of the parties doing business b. a written agreement c. an oral agreement d. a written agreement or an oral agreement only e. a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of the parties doing business

e. a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of the parties doing business

The articles of incorporation usually include all of the following except: a. classes of stock to be issued b. address of the corporation c. purpose of the business d. address of the corporation and the purpose of the business only are included e. address of the corporation and the purpose of the business and classes of stock to be issued are included

e. address of the corporation and the purpose of the business and classes of stock to be issued are included

Which of the following must be contained in a certificate of limited partnership under the Uniform Limited Partnership Act: a. contributions of each partner b. names and addresses of each general and limited partner c. the address of an agent who is designated to receive legal process d. the proportion of the profits that each partner is entitled to receive e. all of the other choices are correct

e. all of the other choices are correct

Which of the following must be contained in a certificate of limited partnership under the Uniform Limited Partnership Act: a. name of the business b. type or character of the business c. the address of an agent who is designated to receive legal process d. duration of the limited partnership e. all of the other choices are correct

e. all of the other choices are correct

Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true? a. each partner has an equal voice in partnership management b. a majority vote controls ordinary business decisions c. profits are to be divided among the partners d. regardless of the amount invested in the partnership, each partner has an equal vote e. all of the other choices are true

e. all of the other choices are true

A written partnership agreement typically specifies the following except: a. the ownership interests of the partners b. the method of accounting to be used c. the name of the partnership business d. the procedures for dissolution of the partnership e. all of the other choices are usually included in the agreement

e. all of the other choices are usually included in the agreement

In most states a limited partnership does not have to file what information with the appropriate state official? a. name of the business b. names and addresses of all partners c. contributions each partner has made d. the share of profits to be paid to each partner e. all of the other choices must be filed

e. all of the other choices must be filed

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 e. all of the other specific choices are correct

e. all of the other specific choices are correct

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

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

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

e. all of the other specific choices are usually included

Dissolution of a partnership takes place, unless otherwise provided for by contract, in the following instances except: a. bankruptcy of a partner b. withdrawal of a partner c. death of a partner d. withdrawal or death of a partner only e. bankruptcy, withdrawal or death of a partner

e. bankruptcy, withdrawal or death of a partner

The dissolution of a partnership may occur: a. if a partner is found to be bankrupt b. if the business of the partnership is made unlawful c. if a partner dies d. if a partner is found to be bankrupt or if a partner dies e. if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful

e. if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful

The owner of a sole proprietorship: a. is legally the same as the business b. is taxed the same as the business c. may hire any number of employees d. is legally the same as the business and is taxed the same as the business e. is legally the same as the business and is taxed the same as the business and may hire any number of employees

e. is legally the same as the business and is taxed the same as the business and may hire any number of employees

During the course of a partnership's winding-up process, the partners owe each other: a. a duty to mitigate b. a duty to compete fully c. a duty to refrain from termination d. a duty of discounting e. none of the other choices

e. none of the other choices

In general, if a partnership agreement does not specify what happens in case of the death or departure of a partner, one looks to: a. Federal Partnership Act b. Robinson-Patman Act c. Partnership Operation Act d. Partnership Termination Act e. none of the other choices

e. none of the other choices

Limited partners are investors who: a. must have a net worth of at least $200,000 b. are liable for all debts of the limited partnership c. may take an active role in the management of the business d. all of the other specific choices e. none of the other choices

e. none of the other choices

Limited partners are similar to corporate shareholders in that: a. both have unlimited liability b. there is no liability for either c. tax rates are the same d. there must be one general partner e. none of the other choices

e. none of the other choices

The modern corporation was developed: a. in England in the Middle Ages b. in Italy during the Renaissance c. in New York during the early twentieth century d. in Germany during the nineteenth century e. none of the other choices

e. none of the other choices

The oldest and simplest form of business organization is: a. joint venture b. partnership c. syndicate d. cooperative e. none of the other choices

e. none of the other choices

To create a corporation: a. articles of incorporation and an application must first be filed with the federal government b. the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states c. the incorporators must hold a public organization meeting, then file articles of incorporation d. the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states, and the incorporators must hold a public organization meeting, then file articles of incorporation e. none of the other choices

e. none of the other choices

Under traditional common law rules, a partnership: a. was always treated as a single legal entity b. could only be formed with the consent of the state c. had the same legal personality as a corporation d. was forbidden under the law e. none of the other choices

e. none of the other choices

Under traditional common law rules, if you wanted to sue a partnership you had to: a. wait until the partnership was incorporated to sue b. sue the partnership as a group c. sue the state on behalf of the partnership d. have the state sue the partnership e. none of the other choices

e. none of the other choices

Which of the following statement(s) is (are) true? a. a partnership may consist entirely of limited partners b. a limited partner may exercise control over the business in proportion to his interest in it c. a partnership must obtain a charter from the state to be recognized as a legal entity d. all of the other specific choices are true e. none of the other choices

e. none of the other choices

A business organization in which some of the partners are not liable for partnership debts is called a: a. no liability partnership b. unlimited liability partnership c. partial liability partnership d. local liability partnership e. none of the other choices are correct

e. none of the other choices are correct

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. a. finalization b. retaliation c. composition d. revitalization e. none of the other choices are correct

e. none of the other choices are correct

A complete termination comes about only after the partnership has been _____ and its affairs have been wound up. a. finalized b. disillusioned c. standardized d. reorganized e. none of the other choices are correct

e. none of the other choices are correct

General partners in a limited partnership: a. have no liability b. have limited liability c. are personally liable to the partnership's creditors only if they choose to be d. are personally liable to the secretary of state e. none of the other choices are correct

e. none of the other choices are correct

In a limited partnership the _____are investors who may not participate in managing the business. a. restricted partners b. general partners c. investment partners d. nonvoting partners e. none of the other choices are correct

e. none of the other choices are correct

In a sole proprietorship, the capital usually: a. comes from taxes b. comes from the government c. comes from investors d. comes from the stock market e. none of the other choices are correct

e. none of the other choices are correct

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. a. certificate of incorporation b. proof of funding c. certificate of credit d. needs of incorporation e. none of the other choices are correct

e. none of the other choices are correct

The majority of businesses in the United States are: a. partnerships b. non-taxable c. corporations d. non-profit e. none of the other choices are correct

e. none of the other choices are correct

The name and address of a corporation, the name and address of the corporation's registered agent, and the purpose of the business are all examples of things that are generally included in: a. the articles of profit b. the articles of sale c. the articles of business d. the articles of legitimacy e. none of the other choices are correct

e. none of the other choices are correct

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. a. Revised Uniform Proprietorship Act b. Revised Universal Partnership Act c. Revised Real Partnership Act d. Revised Unified Partnership Act e. none of the other choices are correct

e. none of the other choices are correct

A sole proprietorship comes into existence when: a. a person in business hires at least one employee b. two or more persons join together to work at a business c. a charter is received from the secretary of state d. when a federal tax identification number is issued for the business e. none of the other choices

e. none of the other choicese

Which of the following is a right of a limited partner in a limited partnership: a. the right to make hiring decisions b. the right to give performance reviews to employees c. the right to take an active role in managing the business d. both a and b are rights of a limited partner e. none of the other specific choices are rights of a limited partner

e. none of the other specific choices are rights of a limited partner

The oldest and simplest form of business organization is the: a. joint venture b. limited partnership c. syndicate d. cooperative e. proprietorship

e. proprietorship

Under the Uniform Limited Partnership Act, a written partnership agreement must include: a. the name of the business b. the type or character of the business c. the contributions of each partner d. the name of the business and the type or character of the business e. the name of the business and the type or character of the business and the contributions of each partner

e. the name of the business and the type or character of the business and the contributions of each partner