B-Law Final

The law that prohibits employment discrimination against qualified people with disabilities.

ADA

A temporary contract of insurance issued by an insurance agent.

Binder

The bankruptcy chapter that applies to farmers.

Chapter 12

The bankruptcy chapter that applies to municipalities.

Chapter 9

A corporation with a very small number of shareholders

Closely held corporation

Stock on which all dividends must be paid before common stock receives any dividends.

Cumulative preferred stock

A fair policy that disproportionately and negatively affects a specially treated group of employees.

Disparate Impact

Intentional discrimination against a particular person.

Disparate Treatment

A corporation in the state where it received its charter.

Domestic corporation

A corporation can only be used to run really large businesses.

False

A corporation may declare a stock dividend even if the corporation has no capital surplus.

False

A corporation's powers are only limited by its bylaws.

False

A guarantor's obligation is always primary just like the primary debtor's.

False

A partner has a right to withdraw half of their original investment without the consent of the other partners.

False

A partnership can exist only if the parties have a written agreement.

False

A stock option is beneficial because the price at which stock may be bought is always less than the fair market value.

False

All debts of debtors are fully paid under Chapter 13 plans.

False

Common stockholders hire the individuals who manage and operate the corporation.

False

In order to prove a hostile work environment an employee need only show that the employee found the environment hostile.

False

No property acquired by the debtor after the bankruptcy proceedings have been instituted is included in the debtor's estate for the payment of creditors.

False

Reorganization proceedings under the bankruptcy code are always voluntary.

False

States are not permitted to require DNA samples from felons.

False

The Securities Investor Protection Act of 1970 prevents fraud through the sale of worthless stock.

False

The law requires a partnership to have a firm name.

False

The majority of the partners bind the firm on all matters in the scope of the partnership business.

False

The purpose of Fictitious Name Registration Statutes is to collect tax.

False

Warranties and representations are the same in contracts of insurance.

False

A corporation organized to run a business and earn money.

For profit corporation

A corporation in all the states from which it did not receive its charter.

Foreign corporation

A partner actively and openly engaged in the business and held out to everyone as a partner.

General partner

Using DNA test results when making hiring, promotion or salary decisions.

Genetic Discrimination

A person responsible for the debt of another, but whose obligation is secondary.

Guarantor

The right of a party who pays the debt of another to be reimbursed by that other person.

Indemnity

An interest in the nonoccurrence of the risk insured against.

Insurable interest

A partnership in which one or more partners' maximum liability for the firm's debts is the amount of their investment.

Limited partnership

An insurance company in which the policyholders are the members and owners.

Mutual insurance company

Stock to which no face value has been assigned.

No-par-value stock

Stock to which a face value has been assigned and that has this value printed on the stock.

Par-value stock

Stock that shares with common stock in any extra dividends.

Participating preferred stock

A corporation set up to perform a nongovernmental function.

Private corporation

A group given protection by anti-discrimination laws.

Protected class

An addition to an insurance policy that modifies, extends or limits the base contract.

Rider

A person who is an active partner but is unknown to the public as a partner.

Secret partner

A creditor's claim that can be satisfied from the proceeds of assets used as collateral.

Secured claim

A written agreement signed by the buyer stating the creditor has an interest in the collateral.

Security agreement

A partner who takes no active part in the management of the business, but might be known to the public as a partner.

Silent partner

Preventing a creditor from suing the debtor to recover a debt.

Stay

An insurance company for which the original investment was made by stockholders and whose business is conducted by a board of directors.

Stock insurance company

The right to purchase shares of stock at a set price.

Stock option

The transfer of the creditor's claim to the guarantor after the guarantor pays the debt.

Subrogation

A person responsible for the debt of another, and whose obligation is primary just like the primary debtor's.

Surety

A partnership engaged in buying and selling merchandise.

Trading partnership

A holder of a certified check drawn by the debtor may assert a claim against the drawee bank rather than the debtor.

True

A partner has a duty to put the firm's interest above personal advantage.

True

A partner has an insurable interest in the property owned by the partnership to the extent of the possible loss.

True

A partnership can only be formed to run a lawful business.

True

A partnership has liability for the torts committed by a partner in the course of partnership business and in furtherance of partnership interests.

True

A very large percentage of employers have some kind of smoking restrictions in effect.

True

A withdrawing partner has liability for all partnership debts incurred up to the time of withdrawal unless the creditors have expressly released the partner.

True

An ultra vires contract generally is binding on the parties to the contract.

True

Any person competent to make a contract has the competence to be a partner.

True

Federal Law allows employer to discriminate on the basis of age when age is a true occupational qualification.

True

For the most part the law of suretyship applies with equal force to both paid sureties and accommodation sureties.

True

Guarantors who have paid more than their proportionate share of a debt are entitled to recover from the other guarantors the amount in excess of their pro rata share of loss.

True

If a debtor has fewer than 12 creditors just one of them may petition for involuntary bankruptcy.

True

If the sale of collateral after default does not cover all the amount owed the buyer has liability for the deficiency.

True

Insurance is a contract whereby a party transfers a risk of financial loss to the insurance company for a fee.

True

Some corporations can have their profits taxed only once.

True

The Securities Act of 1933 does not apply to the issuance of securities under $5 million.

True

The basis on which profits and losses are to be shared cannot be changed by a majority of the partners.

True

The death of a stockholder does not dissolve a corporation.

True

The main disadvantage of a corporation is that the people who own or control a majority of the voting stock have the sole voice in management.

True

The partnership is not liable for unauthorized acts both the actual and apparent authority of one partner.

True

The willful concealment of a material fact renders an insurance policy voidable in most states.

True

There are no formalities to being and operating a sole proprietorship.

True

Three persons who agree to contribute property to the running of a business as co-owners for the purpose of making a profit have formed a partnership even though they do not call themselves partners.

True

Under the Equal Pay Act, an employer is not required to pay employees at the same rate if the payments are made on the basis of a merit system.

True

Warranties are part of the actual contract of insurance.

True

When a guaranty is conditional, the guarantor has liability only if the other party cannot pay.

True

A creditor's claim for which the creditor has no lien on specific assests.

Unsecured claim