LEGS Exam 1

A corporation that does business in states other than the state in which it is incorporated they must obtain what

a certificate of authority in each state in which it does business

If Lamar decides that it is okay to cheat on his taxes, and he believes that it is okay for everyone to cheat on their taxes, which ethical test does he believe in

The universalization test

Corporations are required to pay federal and state taxes on their income. T/F

True

The life of a corporation does not end when the lives of its owners end. T/F

True

The universalization test asks us to consider what the world would be like were our decision copied by everyone else

True

Today, criminal prosecutions of corporations are much more common than they were in the past. T/F

True

The "Who" in the WH process of ethical decision making means what

Who are the stakeholders affected by the decisions a firm makes?

Which of the following terms means that past decisions guide future decisions?

precedent

Corporations are liable for the torts and crimes committed by their agents during the scope of their employment. Courts refer to this liability as the doctrine of _____

respondeat superior

profits that a corporation keeps.

retained earnings

Because corporations are legal entities distinct from their ______, corporations are ______ for corporate actions

shareholders; liable

A plaintiff must have a concrete and actual injury in order to have __________

standing

what generally governs corporations.

state law

The state of Minnesota's legislature implemented a new law governing how much salt and sand could be distributed on the roadways when the weather turned icy. This action by the legislature is known as

statutory law

Each individual corporation's charter creates a contract between who?

that corporation and the state

Business ethics refers to standards of business conduct

True

The United States has how many courts of original jurisdiction at the federal level?

94

Can corporations sue and/or be sued by others?

yes, corporations can sue AND be sued by others.

In U.S. law, ______ are legal entities.

corporations

When managers engage in ethical reasoning, they should consider

customers, managers, owners, investors, employees, and the community

Who of the following can serve as an arbitrator?

-Qualified members of the community. -Lawyers . -Business professionals. -Professors. -All of these people can potentially be arbitrators.

Which of the following items are contained in the complaint

-The relief the plaintiff is seeking. -The basis for the court's subject-matter jurisdiction over the case. -The names of the parties to the case. -A request for a jury. -All of these are included in the complaint.

Name the characteristics of a corporation

1. separate legal entity2. status as "legal person" and "citizen"3. creature of the state4. limited liability of shareholders5. free transferability of corporate shares6. perpetual existence7. centralized management separate from owners8. unique taxation method9. corporate liability for torts and crimes of agents

Business law is the enforceable rules of conduct that govern

Commercial relationships.

Which of the following is not an advantage of arbitration

Arbitrators have to offer reasons for their decisions.

The Golden Rule is the idea that we should interact with other people in a manner that is inconsistent with the way we would like them to interact with us

False

What idea is rooted in the concept of legal realism?

Context must be considered as well as law.

what is an accurate statement about corporations and due process rights?

Corporations have due process rights under both the Fifth and the Fourteenth Amendments to the U.S. Constitution.

A school of jurisprudence in which all costs and benefits are given a monetary value is known as

Cost-benefit analysis

Corporations are required to pay federal and state taxes on their income. T/F

False

Shareholders' shares are only transferable upon their death. T/F

False

Which school of jurisprudence uses traditions as the model for future law and behavior

Historical school

what is an accurate statement about the existence of a corporation

In most states, unless the articles of incorporation provide otherwise, corporations continue to exist indefinitely

Case law is the collection of legal interpretations made by

Judges.

Rules of conduct in any organized society that are enforced by the governing authority of the community are

Laws

What type of jurisdiction do trial courts have

Original

Which of the following powers do appellate courts possess

Review previous judicial decisions

The expectation that a community places on the actions of firms inside that community's borders is known as the

Social responsibility of business

The assortment of rules and regulations put forth by legislatures is known as

Statutory law

what is one way a shareholder can recognize a profit from a stock investment

The shareholder can receive dividends from the corporation.

Which of the following is not a threshold requirement a case must meet before it makes it to court

Venue.

According to ethical guidelines, managerial decisions

affect particular stakeholders and must meet standards of action-oriented behavior.

A reply by the plaintiff is similar to a(n) _______________ by the defendant.

answer

a distribution of corporate profits or income to the shareholders.

dividend

If shareholders die, corporations ____

do not dissolve

Because corporations are separate legal ______, government ______

entities; taxes their income directly

Corporations may take whatever actions are necessary to execute their express powers. Thus, corporations have __

implied powers

A shareholder's liability for corporate actions is limited to what

limited to his or her corporate investment

A purpose of the law is to serve as a moral guide by indicating __________ expectations of citizens and organizations.

minimal

The legality of a business decision is the __________ standard that must be met

minimal

how many states have adopted at least part of the Revised Model Business Corporation Act (RMBCA)?

more than 25

In Hertz Corp. v. Friend, the United States Supreme Court set forth the "__________" test as the appropriate test for determining a corporation's principle place of business for the purposes of diversity jurisdiction

nerve center

The board of directors of a corporation selects ______ to manage the day-to-day business of the corporation

officers

State incorporation statutes establish

the requirements for corporate formation

Generally, what can shareholders can freely transfer

their corporate shares

An ethical dilemma is a problem about what a firm should do for which no clear, right decision is available

True

Who do Shareholders of a corporation elect to manage the corporation

a board of directors