BUS Week 6.
Which of the following statements accurately differentiates between the management of a limited liability company (LLC) and a limited liability partnership (LLP)?
An LLC may be member-managed or manager-managed; an LLP is managed by managing partners or an executive committee.
_____ occurs when an individual member of a limited liability company (LLC) decides to exercise the right to withdraw from the partnership.
Dissociation
Which of the following is true of taxation in a C corporation?
In a C corporation, both the entity and individuals pay tax through a system of double taxation.
Which of the following statements accurately differentiates between a general partnership and a limited partnership?
In a general partnership, the partners are permitted to bind the partnership; in a limited partnership, the limited partners do not have the authority to bind the partnership.
Which of the following is the authority that oversees the regulation of franchisors?
The Federal Trade Commission (FTC)
According to the modern application of the Howey test, which of the following statements is true of what constitutes a securities offering?
The expectation of a return on investment must be the primary reason for the investment.
Which of the following sentences best describes the term quorum requirement during the election of a corporation's board of directors?
The minimum number of shareholders who must be present to hold a vote
Which of the following statements is true of sole proprietorships?
They are not subject to corporate income taxation.
Which of the following statements is NOT true about the capitalization of general partnerships?
They may sell ownership rights through public markets.
Which of the following is true of privately held corporations?
They often use the unanimous consent resolution to issue stock
One who has experience, business savvy, and knowledge of a market to the extent that the law imputes a certain cognizance of investment risk and the ability to protect his or her own interests is referred to as a(n):
accredited investor.
A limited liability company (LLC) is formed by filing _____ with the state public filing official in the secretary of state's corporation bureau.
articles of organization
Section 16(b) of the Securities Act of 1934 includes a provision that allows a corporation to recapture any profits earned by an insider on a purchase or sale of the company's stock that occurred within a six-month period. This is known as the _____.
clawback provision
The five members of the Securities and Exchange Commission (SEC) are called:
commissioners.
Equity payments made to common stock owners based on the profitability of the company they own stock in are called:
dividends.
When a corporation is converted from privately held to publicly held, it is likely to have done so by:
engaging in an initial public offering.
According to the Revised Uniform Partnership Act (RUPA), when a partner exercises a rightful dissociation, the partner:
is no longer liable for debts incurred by the partnership.
A _____ has the greatest variance of liability protection under state law.
limited liability partnership (LLP)
Matthew Granger is a member of the board of directors at Produxicore Inc. Over a period of one year, Matthew failed to attend most of the board meetings claiming that he was unaware of their occurrence. During the meetings that he did attend, he was not up-to-date with the company's developments. He did not read the reports he was presented and was unfamiliar with the company's financial records. In this scenario, Matthew Granger breached his duty of care primarily through _____.
negligence
In cases where a partner has engaged in some misconduct or tortious conduct, a limited liability partnership (LLP) acts to shield:
only the personal assets of other partners, not those of the partner who committed the misconduct.
