BLAW 371 - Ch. 12
D
A(n) ____ is an 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
A
Coca-Cola, Microsoft and General Motors are all examples of: (A) corporations (B) limited partnerships (C) legal partnerships (D) sole proprietorships (E) none of the other choices are correct
C
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
E
The oldest and simplest form of business organization is the: (A) joint venture (B) limited partnership (C) syndicate (D) cooperative (E) proprietorship
B
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
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
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
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
D
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
A
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
B
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
E
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
A
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
B
A corporation is recognized under both federal and state law as a "person" and: (A) enjoys all of the same rights and privileges afforded to U.S. citizens in about half the states (B) enjoys only some of the same rights and privileges afforded U.S. citizens (C) enjoys none of the same rights and privileges afforded to U.S. citizens (D) enjoys all of the same rights and privileges afforded to U.S. citizens (E) none of the other choices are correct
C
A corporation separates: (A) ownership from responsibility (B) ownership from profit (C) ownership from control (D) control from losses (E) control from profits
A
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
D
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
A
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
E
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 onl (E) a written agreement or an oral agreement or an implied agreement that can be inferred from the conduct of the parties doing business
C
A person doing business for herself is a ____; the business is a ____. (A) partner; partnership (B) general partner; limited partnership (C) sole proprietor; proprietorship (D) shareholder; corporation (E) member; syndicate
B
A person doing business for himself or herself is a(n): (A) single proprietor (B) sole proprietor (C) onl proprietor (D) partner (E) general proprietor
A
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
C
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
E
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
C
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
B
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
Compared to the U.S., new businesses in Japan: (A) are created more frequently than the are in the U.S. (B) are created much less frequently than the are in the U.S. (C) are greatly encouraged by banking regulations (D) are greatly encouraged by japanese tax rates (E) may operate with less money than U.S. businesses
B
Corporations have existed for centuries, but the modern "liberal" general incorporation statutes were first passed in: (A) the late 1700s (B) the 1930s (C) the 1950s (D) the 1960s (E) none of the other choices
B
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) dut of management (D) dut of morality (E) duty of profit
E
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
C
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
A
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 full (C) a duty to refrain from termination (D) a duty of discounting (E) a duty to mitigate
A
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 an time
B
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: (A) proprietorship (B) partnership (C) business trust (D) corporation (E) syndicate
C
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 the choose to be
A
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 an other creditor (B) will not officially become a creditor of the corporation, but will enjoy the same rights of recovery against the corporation as an 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 an other creditor
A
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 an other creditor (B) will not officially become a creditor of the corporation, but will eno the same rights of recovery against the corporation as an 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 an other creditor
D
In Japan, small businesses are: (A) greatly favored by the government (B) exempt from most taxes (C) considered desirable places to work (D) considered less desirable places to work (E) formed at a much faster rate than in the United States
D
In Japan, small businesses are: (A) greatly favored by the government (B) exempt from most taxes (C) considered desirable places to work (D) discriminated against by government policy (E) formed at a much faster rate than in the United States
C
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) non voting partners (E) real partners
B
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
A
In 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
C
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
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 b participating in managerial decisions in the partnership or b den ing association with the partnership
A
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 prox (D) a sole proprietorship (E) none of the other choices are correct
C
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
E
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
B
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) onl precede general partners' rights
C
Legally, the board of directors is the ____ of a corporation. (A) principle (B) leader (C) principal (D) judge (E) owner
A
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
C
Limited partners are similar to corporate shareholders in that: (A) both have unlimited liability (B) there is no liability for either (C) both have liability, but only to the extent of their investment (D) there must be one general partner (E) none of the other choices
D
Most shareholders give third parties their ____. It is a written authorization to cast their vote so the do not have to attend a shareholder meeting in person. (A) charter (B) shares (C) resolution (D) proxy (E) none of the other choices
C
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
B
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
D
Shareholders of a corporation: (A) manage the corporation (B) delegate responsibility for management to hired managers (C) elect all ice presidents of the corporation (D) vote on matters that may affect a change in the corporation's structure (E) issue the employment rules of a corporation
D
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
C
The ____ of partnership affairs involves completing an unfinished business and then collecting and distributing the partnership's assets. (A) winding down (B) resetting (C) winding up (D) terminating (E) dissolution
B
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 ct (B) Revised Uniform Partnership act (C) Revised Real Partnership ct (D) Revised Unified Partnership act (E) Revised Universal Partnership ct
B
The articles of incorporation usual provide all of the following except: (A) name of the corporation (B) names of all shareholders (C) name of the registered agent (D) classes of stock being issued (E) all of the other choices must be provide
A
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
B
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
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 isolated (D) protects directors and managers of a corporation who have made honest mistakes in judgment and is used b courts to impose strict liability on directors and managers when isolated (E) none of the other choices
E
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) A & C (E) A, B & C
A
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 an 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
C
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 extraordinar 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
A
The majority of businesses in the United States are: (A) sole proprietorships (B) non-taxable (C) corporations (D) non-profit (E) partnerships
C
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 German during the nineteenth century (E) in New york during the early twentieth century
E
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 an 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 an number of employees
C
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 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 gi e a third part the right to vote their shares b prox
A
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
D
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
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
A
Today, a corporation must be created according to: (A) state law (B) common law (C) the Uniform Incorporation ct (D) the U.P. . (E) federal statutory provisions
E
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) only a & b (E) a, b & c
B
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
A
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
C
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
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 an thing (D) before creditors receive an thing (E) none of the other choices are correct
B
Which of the following are NOT required to be in a certificate of limited partnership: (A) the type of business (B) the business positions to be held by each partner (C) the proportion of profits to be earned by each partner (D) a & c (E) a,b & c
E
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
D
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
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
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
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
B
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
C
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
D
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 after the creditors are paid (E) all of the other choices are true
E
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
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
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
C
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
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
D
Whom of the following must follow a corporation's btlaws 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
A
____ 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
____ is an artificial person or legal entity created under state law. (A) corporation (B) limited partnership (C) legal partnership (D) sole proprietorship (E) business
C
____ is an association of two or more persons to carry on a business as co-owners for profit. (A) proprietorship (B) corporation (C) partnership (D) cooperative (E) all of the other choices
A
____ 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
C
____ 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
D
n 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
