Bus Law Final 3

Electric, gas, and water companies are examples of

c. public service corporations.

The most often used form of business organizations is the

c. sole proprietorship.

A corporation wanting to be taxed as an S corporation must file the appropriate form indicating such an election with the IRS before ____________________ of the tax year in which the election is to be effective.

March 15

May 2, 2016 began Teacher Appreciation ______________ where students are legally bound to appreciate their teachers.

Month

The number of shareholders in an S corporation must be

a. 100 or less.

Which of the following statements regarding a limited partnership is not true?

a. One partner must be a general partner with limited liability.

Which of the following statements regarding a corporation is not true?

a. They can attract large sums of capital due to increased investor liability.

When two corporations cease to exist and a new corporation is formed, it is called

a. a consolidation.

The application for incorporation filed with a state government is termed the

a. articles of incorporation.

The basic type of stock carrying the right to one vote per share owned is termed

a. common stock.

Tess, Constance, and Jessica want to establish a partnership for their law firm whose expressed purpose is to provide legal advice and legal representation. Each partner has agreed to assume full personal responsibility for all debts and the management of the firm. The type of partnership they want to establish is a

a. general partnership.

Dexter and Desiree would like to organize a ballet company whose purpose would be ballet education and charitable performances in their community. If their revenues from this corporation exceed its expenses, these revenues will not be distributed to the corporate owners. If Dexter and Desiree follow through with their plans, what specific type of corporation will they organize?

a. nonprofit corporation

A minor entering into a partnership agreement

a. retains all the rights and privileges of a minor.

Double taxation means that

a. the corporation is taxed on corporate income and corporate shareholders are taxed on dividends.

In a limited partnership, a limited partner's exposure to liability cannot exceed the amount of capital the partner has invested in the business as long as

a. the partner does not participate in the managerial control of the business.

What is the limitation on the number of members or stockholders for an LLC?

a. there is no limit

Which of the following is an advantage of the corporate form?

b. ability to attract large sums of capital

Which type of business organization offers perpetual life as well as limited liability?

b. corporation

The normal sequence of steps in ending a partnership is

b. dissolution, winding-up period, termination.

S corporation earnings are

b. only taxed at the individual owner's level.

Shareholders do not have the right to

b. possess any corporate property.

Corporations established for a governmental purpose are legally termed

b. public corporations.

Which type of business organization is subject to double taxation?

c. C corporation

A corporation doing business in one state but chartered in another state is called

c. a foreign corporation.

Which of the following basic forms of business organization is looked upon as an artificial person by the law?

c. corporation

S corporations can have only one class of stock, but shareholders

c. do not all have to have the same voting rights.

Henry and Madelyn own and operate a small court-reporting school and have often considered incorporating their business. Which of the following is a disadvantage of a corporation?

c. domestic corporation.

Melvin and Larry individually each owned two restaurants in Oklahoma City. The two decided to form a corporation, Southern Restaurant Management Group, Inc., to collectively manage their combined four restaurants. Although the four restaurants are in Oklahoma, Melvin and Larry incorporated outside the United States in the Cayman Islands. Their new corporation is termed a(n)

d. alien corporation.

A corporation has the power

d. all of these.

Under extreme conditions, courts will disregard the corporation's limited liability protection and make the stockholders _______________ in a practice called "piercing the corporate veil."

d. personally responsible for the debts

Mazher invested $10,000 and purchased 200 shares of stock in Trans Pacific Exporting, Inc. His 200 shares of stock do not entitle him to vote in the corporation's affairs, but he is guaranteed to receive $10 per share each year of the distribution of the corporation's profits. Mazher is a

d. preferred stockholder.

Which of the following is not an advantage of the LLC?

d. taxation problems are encountered when transferring assets into an LLC

A(n) ____________________ partner is neither known to the public as a partner nor active in management.

dormant

Stock may or many not have a(n) ____________________, which is the dollar amount printed on the face of the stock certificate.

par value

The stockholder's right to purchase additional shares of a new stock issue so as to maintain her or his percentage of ownership interest in the corporation is termed the ____________________.

preemptive right

A(n) ____________________ partner is not known to the public as a partner yet participates in management.

secret

A(n) ____________________ partner may be known to the public as a partner but takes no active part in management.

silent

A(n) _________________ partnership is formed by some or all members of a general partnership to undertake a unique venture in the same area of business as the general partnership.

special

A(n) ____________________ partnership buys and sells goods and services commercially.

trading

The sole proprietor has ____________________ personal responsibility for all debts and for other liabilities that the business may incur.

unlimited