Business Law Exam 2
Merrick and stanley corporation have 28,000 outstanding shares. during a proposal for a merger, the shaareholders decide to increase the quorum of the vote of shareholders to 75% using the supermajority voting rule. how many minimum affirmative votes are needed to pass the supermajority voting requirements
21,000 because 28,000*.75=21,000
the water glove corporation issues ________ preferred stock that required payment of a quarterly dividend of $5 per share. the water glove corporation falls behind with 4 quarterly payments, $20 per share of preferred stock. the next quarter, the corporation makes a profit of $25 per share. the corporation must pay $20 per share of arrearages to the preferred share holders plus this quarter's payment of $5 per share
Cumulative
An association of 2 or more people to carry on as co owners of a business for profit us known as a?
General Partnership
______ are powers beyond express powers that allow a corporation to accomplish its corporate purpose
Implies powers
a plaintiff must name the partnership and all of the partners as a defendants in a lawsuit in order to pursue a claim for _____
Joint Liability
consistency is 1 of the 2 important principles of ____ upon which its universal laws are based
Kantian ethics
A _______ is a partnership created for a fixed duration
Partnership for a term
which of the following must be in writing even if it is below the time stipulation of the statute of frauds?
Partnerships authorized to deal real estate
in most states, the formation, operation, and termination of limited partnerships are regulated by the ___
RULPA
________ is a moral theory which asserts fairness is the essence of justice
Rawl's social justice theory
which of the following is a right to which every general partner is entitles under the uniform partnership act?
Right to return of capital
the ______ act is a federal statute enacted by congress to improve corporate governance
Sarbanes-Oxley
the _______ act prohibits public companies from making personal loans to their directors or executive officers
Sarbanes-Oxley
Interference of the existence of a general partnership is drawn only if profits are received as __________
Share in a partnership
the _______ is a model act that codifies general partnership law
Uniform partnership act (UPA)
which of the following is true of tort liability of a general partnership?
a partner can be sued even if they didn't participate in the commission of that tort
reversibility is a principle of Kantian ethics which says that
a person must abide by the rule they use to judge the morality of someone else's conduct
instead of suing the partnerships or other partners at law, general partners are given the right to bring a _________ against other partners
action for an accounting
Involuntary dissolution of a corporation that is ordered by the secretary of the state if a corporation has failed to comply with certain procedures required by law is known as ______
administrative dissolution
which of the following is true of the liability of an incoming partner?
an incoming partner is liable for the debts of the existing debts of the partnership
which of the following activities is permissible for limited partners?
being a contractor of the partnership
shareholders elect a panel of decision makers known as the ____
board of directors
a long term debt security that is secured by some form of collateral is referred to as ___
bond
how are profits and losses shared in the absence of a limited partnership agreement?
both profits and losses are shared on the basis of value of each partner;s capital contribution
a detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing a corporation are referred to as ______
bylaws
Bilkis brans has 20,000 outstanding shares with 4 shareholders. Ester owns 9,000 shares, mendez owns 4,000 shares, judy owns 4,000 shares and aaron owns 3,000 shares. assume that 2 directors of the corporation are to be elected from a potential pool of 5 candidates. Ester votes for candidates 1 and 5, mendez votes for candidates 2 and 4, judy votes for candidates 4 and 3, and aaron voted for candidates 2 and 3. if the voting is done by straight voting then which 2 candidates are likely to wiN?
candidates 1 and 4
a ____ is a document that is filed with the secretary of state upon the dissolution of a limited partnership.
certificate of cancelation
a limited partnership is formed when the ______ is filed
certificate of limited partnership
which of the following documents does a domestic limited partnership require to be allowed to operate in another state?
certificate of registration
according to priority, which of the following claimants is the last to be paid after assets have been liquidated of a corporation
common stockholders
Conch corporation, a global oil and gas company, has plans to build a subsidized postsecondary vocational school in the town of cristen. the plan was put to vote and approved . the school is being built in collaberation with the local government. the goal is to help the youth and dropouts of the neighborhood learn vocational skills. what social responsibility theory describes Conch corporation's initiative to build the school
corporate citizenship
_______ are employees of a corporation who are appointed by the board of directors to manage the day to day operations of the corporation
corporate officers
which of the following is a major form of conducting business?
corporation
stocks for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as
cumulative preferred stocks
a system which a shareholder can accumulate all of their votes and vote them all for one candidate or split them among several candidates is known as
cumulative voting
derek has 2,000 shares of Unistone corporation, which is planning to vote for 2 new directors. through a special voting provision in the corporation's articles of incorporation, derek was able to vote for both of his preferred candidates with 2,000 shares, which gave him virtual voting count of 4,000 shares. what voting rule in the articles of incorporation allows derek to achieve this?
cumulative voting
the designation of _____ is used for businesses that are operating under a trade name
d.b.a.
________ is said to have occurred if a certificate of limited partnership was not properly filed
defective formation
a lawsuit a shareholder brings against an offending party of behalf of a corporation when the corporation itself fails to bring the lawsuit known as a
derivative action
which of the following is true of the board of directors of a corporation
directors cant vote by proxy
the change in relationship of partners in a partnership caused by any partner ceasing to be associated in the carrying on of the business is known as?
dissolution
if a corporation is a general partner to a limited partnership, which of the following would result from the dissolution of the corporation?
dissolution of the limited partnership
a limited liability limited partnership is a ______ in the state in which it is organized
domestic LLLP
a corporation in the state in which it was formed is referred to as
domestic corporation
a limited partnership is a ______ in the state in which it is organized
domestic limited partnership
Kantian ethics is also referred to as _____ ethics
duty
a director or corporate officer who usurps a corporate opportunity would be in violation of the director's fiduciary duty called _____
duty of loyalty
the ________ requires general partners to adhere to the provisions of the partnership agreement and the decisions of the partnership
duty of obedience
charlotte works as a teacher in africa. every sunday, she visits close by villages and convinces the parents to send their children to school. she arranges accommodation for the children and helps them with their education. charlotte says she looks up to mother tersea to solve ethical dilemmas. which of the following theories would support charlotte's approach to ethics?
ethical fundamentalism
______ is an ethical theory where a person adheres to rules or commands that are from an outside source, like a book or celebrity
ethical fundementalism
______ is a moral theory which holds that individuals must decide what is ethical based on their own feelings about what is right and wrong
ethical relativeism
which of the following moral theories will help anthropologists study ancient societies with an impartial and unprejudiced mindset, espically when it relates to comparing ethics and customs followed by ancient societies to those being followed by present societies
ethical relativism
the whistle blower statute is also known as
false claims act
a __________ is a document that is filed with the state that designates a trade name of a business
fictitious business name statement
guarantees that establish a debtor-creditor relationship in which the corporation borrows money from the investor to whom a debt security is issued are known as
fixed income securities
which of the following is a federal statute that deals with corporate bribery between the US companies and officials of other countries
foreign corrupt practices act
a limited partnership that was organized in alabama and operating in texas with no operations outside the us is considered a ______ in texas
foreign limited partnership
which of the following is a way of establishing ethical rules in Rawl's social justice theory
from an original position of a veil of ignorance
under partnership law, ______ have the right to manage the affairs of the limited partnership.
general partners
which of the following partners in a limited partnership invest capital, manage the business, and are personally liable for partnership debts
general partners
a limited partnership has 2 types of partners
general partners and limited partners
an ordinary partnership is also known as a?
general partnership
which of the following is true of a general partnership?
general partnerships can be oral or implied from the conduct of the parties
A _____ is a clause that can be included in the articles of incorporation that permits the corporation to engage in any activity permitted by the law
general purpose clause
which of the following is true of the management of a general partnership?
if the vote is tied, the action being voted on is considered to be defeated
the person responsible for incorporation of a corporation is known as an
incorporator
________ refers to the right of a partner to be reimbursed for expenditures incurred on behalf of the partnership
indemnification
a contract between a corporation and a holder that contains the terms of a debt security is known as a
indenture
which of the following would generally be considered and an express power of a corporation
issuing notes and bonds
which of the following is a perceived disadvantage of Rawl's social justice theory
it doesn't consider the fact that people wouldn't want to maximize benefits for the least advantaged people
which of the following is true of a shareholder voting agreement
it doesn't need to be filed by the corporation
which of the following is a perceived disadvantage if Kantian ethics?
it is based on universal rules that have no common consensus
which of the following is an apparent disadvantage of utilitarianism
it treats morality as if it were an impersonal mathematical calculation
_____ is a moral theory which states that people owe moral duties that are based on universal rules
kantian ethics
according to the RULPA, what liability does a corporation have if it is a general partner to a limited partnership?
liability restricted to debts up to its capital contributions
which of the following partners of a limited partnership invest capital but do not participate in management?
limited partners
a _______ is a clause that can be included in the articles of incorporation that stipulates that activities that the corporation can engage in. the corporation can engage in no other purposes or activities
limited purpose clause
_______ is a preferred stockholder right to be paid a stated dollar amount if a corporation is dissolved and its assets redistributed
liquidation preference
which of the following is true of profits and losses in a general partnership?
losses are shared equally by all general partners
Marshall is the purchasing agent for Digitool art corporation. his job requires him to negotiate and execute contacts for purchasing office supplies and equipment for the corporation. a computer salesperson pays marshall a $20,000 kickback to purchase the computers needed by digitool art corporation. which of the following duties of loyalty has marshall breached in this situation
making a secret profit
A _____ is a limited partnership with liquid investment, and whose limited interests are traded on organized securities exchanges such as the new york stock exchange
master limited partnership
Ulab inc recently had a fire in one of its offices and resulted in the building being fire gutted. none of the employees were trained through fire drills and the 10 story building had no fire escape route and many employees were hospitalized. what important social responsibility theory was ulab negligent of by not training their employees through fire drills and not installing a fire exit?
moral minimum
a social responsibility theory of business which says that a corporation's duty is to make profit while avoiding causing harm to others is referred to as
moral minimum
when is the annual shareholder's meeting held?
on the dates fixed in the bylaws
general partnerships that exist for more than _____ must have their general partnership agreement in writing under the statute of frauds in order to deal in real estate
one year
____ is the doctrine that says if a share holder dominates a corporation and uses it for improper purposes, a court can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations
piercing the corporate veil
______ are rights that give existing shareholders the option of subscribing to new shares being issued in proportion to their current ownership intrests
preemptive rights
judicial dissolution of a corporation can be instituted by the attorney general of the state of incorporation if the corporation ______
procured its articles of incorporation through fraud
A _______ is a person who organizes and starts a corporation, negotiates and enters into contracts in advance of its formation, finds the initial investors to finance the corporation and so fourth
promoter
which of the following is the definition of a foreign corporation
q corporation in states other than the one in which it is incorporated
stock that permits a corporation to buy back the preferred tock at some future date is known as
redeemable preferred stock
a person or corporation that is empowered to accept service of process on behalf of a corporation is referred to as a ____
registered agent
A ____ is an agreement that requires a selling of shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else
right of first refusal
jameson works for fishy mart corporation. His job is to locate future sites for fishy mart stores. jameson finds some land near the water that would be good for a fishy mart store. jameson makes his friend purchase the land and after that they sell the property to fishy mart and split the profits. Jameson doesn't disclose his interest in the property while recommending the site to fishy mart. which of the following duties of loyalty has jameson breached in this situation?
self dealing
owners of a corporation who elect the board of directors and vote on fundamental changes in the corporation are known as
shareholders
owners of a corporation who elect the board of directors and vote on the fundamental changes in the corporation are known as
shareholders
which one of the following moral theories matches the dictum " i will keep the rules if everyone else does
social contract
jonathan lopez wants to be his own boss and ventures into retailing fruit in the neighborhood after borrowing some money from his mother. while obtaining a license to carry out a business in the city, jonathan mentions the money he borrowed but forgets to specify what type of business undertaking his store will be. Under which of the following major forms of business is jonathan's store listed by default?
sole proprietorship
limited partnerships are also known as?
special partnerships
new general partners can be admitted with only the _______
specific consent of each partner
____ is a social responsibility theory of business which says that a corporation must consider the effects its actions have on people other than its shareholders
stakeholder intrest
_________ is a system in which each shareholder votes the number of shares they own on candidates for each of the positions open
straight voting
which of the following is true of an amendment of the articles of incorporation that does not affect the rights attached to shares
the board of directors can approve the amendment without shareholder approval
which of the following is true in the creation of a general partnership?
the business name selected by the partnership cannot indicate that it is a corporation
which of the following is true of an S corporation?
the corporation can have no more than 100 share holders
courts may pierce the corporate veil if
the corporation has been formed without sufficient capital
which of the following must be true for a corporation to elect statutory close corporation status?
the corporation must have 50 or fewer shareholders
which of the following governs a limited partnership, its internal affairs, and the liability of its limited partners
the law of the state in which it is organized
if Gerald Koontz retired from being a general partner in a limited partnership, which of the following is true?
the partnership is dissolved according to RULPA norms
what is maximizing profits as a social responsibility theory in business
the theory that a corporation owes a duty to take actions that increase profits for shareholders
according to ethical relativism
there are no universal ethical rules to guide a person's conduct
which of the following is true of stock dividends
they are additional stocks distributed as dividents
which of the following is true of shareholders
they can't enter into contracts that bind the corporation
which one of the following is true of treasury shares
they cannot be voted by the corporation
the sole proprietor has _____ liability.
unlimited personal
general partners have _____ for the debts and obligations of the partnership
unlimited personal liability
which of the following types of liability do general partners of a limited partnership have for the debts and obligations of the limited partnerships?
unlimited personal liability
a share holder's authorization of another person to vote the shareholder's shares at the shareholders meetings in the event of the shareholders absence is called
voting by proxy
which of the following is a cause for the dissolution of a partnership
withdrawal of a general partner
partners who erroneously, but in good faith, believe the have become limited partners can escape liability as general partners by _____
withdrawing from any future equity participation in the enterprise
which of the following is mandatory for the addition of a new limited partner to an existing limited partnership?
written consent of all partners