business law II ultimate study pack

Any security must be registered before it can be sold, unless: (Choose 2 answer choices.) ------------------------------- Which of the following issuers must register with the SEC under the Securities Exchange Act of 1934? Choose 2 answer choices.

- the security qualifies for an exemption. - the transaction qualifies for an exemption. ----------------------------------------------------- - Companies who trade on a national exchange - Companies who complete a public offering

Puffery includes what kinds of activities? ------------------------------- What is the difference between deceptive advertising and puffery? Choose 2 answer choices.

Ads with exaggerated statements ----------------------------------------------------- - Reasonable people realize puffery is not meant to be taken literally, but they could be fooled by deceptive advertising. - Deceptive advertising is prohibited; puffery is allowed.

One of Jenna's favorite things to do is relax by the lake on her neighbor Brad's property. One day, Jenna is sitting by Brad's lake reading a book when she discovers a diamond ring near the water's edge. Jenna shows the ring to Brad, but Brad doesn't know who the owner is. Jenna and Brad post notices around the small town they live in, hoping someone will come forward to claim the ring. After a reasonable amount of time, if the real owner does not claim the ring: ------------------------------- Quinn and Anna have been friends for many years. They have discussed many times that when Quinn dies, Anna will inherit Quinn's prized antique, a beautiful hand-carved writing desk. One day, to make sure that Quinn's wishes are actually carried out when he dies, he tells Anna again that she will inherit the antique desk, this time in the presence of his three adult children. Quinn states that he wants to enjoy the desk while he is still living, so it will remain in his house until his death. Quinn's will states that the antique desk will go to his sister Analise. When Quinn dies, the antique desk: ------------------------------- Digger lives in Memphis and wants to visit his girlfriend Sarah in Nashville. Digger asks his friend Trevor if he can borrow Trevor's new convertible for the trip so he can impress Sarah. Trevor agrees, and Digger sets off on a road trip to Nashville. Unfortunately, Digger has a few beers first and ends up driving the convertible off the highway into a ditch. The convertible was brand new, and Trevor had not yet purchased insurance on the car. When Trevor asks Digger to pay for the repairs, Digger declines, saying "It's not my car, it's yours! You pay for the damages!" If Trevor sues Digger for the damage to the car, the court will likely: ------------------------------- Joe's Garage specializes in repairing foreign cars. Malcolm brings his Alpha Romeo to Joe's Garage for repair. Malcolm explains to Joe, the owner of the garage, that there is a strange sound under the hood and the left front tire is wobbling. Joe is about to leave town to go to Italy for three weeks and tells Malcolm that he cannot accept the repair job and Malcolm should remove the car from Joe's property. Malcolm is worried about driving the car, so he leaves it on Joe's property behind the building. Joe leaves for vacation, not realizing that Malcolm's Alpha Romeo is parked out back. While Joe is in Italy, someone vandalizes the car and causes thousands of dollars of damage. When Malcolm returns for his car and finds out the car has been vandalized, Malcolm sues Joe. Malcolm claims the car was Joe's responsibility because they had a valid bailment. The court will likely find that Joe and Malcolm: ------------------------------- Yvonne and Rolanda are good friends. One day, they are on the way to the market together when they are hit by a car whose driver runs a stop sign. Yvonne is barely injured, but Rolanda sustains life-threatening injuries. In the hospital, just before they wheel Rolanda away to surgery, Rolanda tells Yvonne that she wants Yvonne to have her diamond necklace. Rolanda directs Yvonne to get the diamond necklace out of Rolanda's purse, where they had put it after the accident, so Yvonne does. The surgery is successful, and Rolanda makes a full recovery. If Rolanda asks for her necklace back:

Brad owns the ring. ----------------------------------------------------- goes to his sister Analise. ----------------------------------------------------- require Digger to pay because this was a bailment for the sole benefit of the bailee. ----------------------------------------------------- had no valid bailment, and Joe is not responsible for the damage to the car. ----------------------------------------------------- Yvonne must return the necklace to her.

You attend a university in a city that has four colleges. You buy your lunches at your university cafeteria. You think the prices at the cafeteria are high. You recently saw in the news that the food vendors at your university and the other three colleges in the area are being prosecuted by the Department of Justice for the antitrust violation of market division. You wonder what they allegedly did wrong. What is market division and is it a per se violation of the Sherman Act?

Market division means dividing up or allocating territories or customers among competitors. The outcome is that each competitor is freed from competition in its assigned area. It is a per se violation.

After a day at the lake, you stop on the way home to gas up your car and discover your debit card is missing. Because it is late in the day on a Sunday, you wait until the next morning to contact the bank. The bank employee checks your account and discovers that $600 in purchases have been made overnight! Do you think you will be responsible for the $600 in unauthorized charges on your account?

No, you will be responsible for only $50.

Which of the following is required to create a sole proprietorship?

Nothing

Shawn is creating a negotiable instrument to give to Craig and Shawn does not want to involve a financial institution. Which type of negotiable instrument will Shawn make? ------------------------------- Shawn will pay Craig with a negotiable instrument, and Shawn plans to involve a third party in that process. What instrument should he use? Choose 2 answer choices.

Promissory Note ----------------------------------------------------- - Check - Draft

Which of the following does the SEC evaluate in a registration statement? ------------------------------- During the registration waiting period, an issuer may: (Choose 2 answer choices.)

Whether appropriate disclosures have been made ----------------------------------------------------- - offer to sell securities. - distribute a preliminary prospectus

Your son recently moved back home and wants to drive the family vehicle. You are concerned, though, because your son has a bad drinking problem, and has wrecked multiple automobiles. Your son's name is not on your insurance policy, and you worry that if he is covered by your insurance, your rates will go sky high. Do you think there is anything you can do to make sure your son's driving record doesn't affect your insurance rates?

Yes, you could have him excluded from coverage.

Ramona sells her bar, Ramona's Tavern, to Izabella. Three weeks later, Ramona's Tavern burns to the ground. Ramona realizes that she forgot to cancel the insurance on the bar, so she files an insurance claim. The insurance company investigates the fire and determines that it was an accident, so the claim is proper. As the insurance company is processing the check, however, they discover that Ramona no longer owns the bar. The insurance company: ------------------------------- Ryder plans to meet with his attorney to begin the preparation of a will. He wants to make sure that his children aren't faced with a lot of decisions once he's gone, so he plans to set out in detail what his wishes are. Ryder wants his automobile to go to his daughter Karen, his home to go to his son Caleb, the rest of his property to be split equally between Karen and Caleb, and he wants to make sure he is not kept on life support if he develops a terminal medical condition where his quality of life is severely impaired. All of these concerns are valid items to include in a will except the decision to: ------------------------------- Kyle and Rhonda have their wills prepared by their attorney. Rhonda has many specific provisions included in her will, including family heirlooms that she wishes to leave to specific friends and relatives, the establishment of a testamentary trust to provide for Kyle and Rhonda's three children, and a provision that anything left over after the specific provisions are taken care of should go to her husband Kyle. She does not, however, appoint an executor in the will to make sure that all these provisions are carried out. When Rhonda's will is probated, the court will appoint a(n): ------------------------------- Mikail is married to Laila, and they have no children. For years, Mikail has told his friends and family that when he dies, he wants his original Picasso painting to go to Nadia, his best friend since childhood. When Mikail dies, his friends and family discover that he never executed a will. Since Mikail died without a valid will, the Picasso painting will: ------------------------------- Joshua has his attorney create a will for him. When it is done, Joshua meets with the attorney and witnesses to execute the will. Joshua signs the will in front of the witnesses and a notary. The witnesses then each sign the document in the presence of the other: first Beth, who is seventeen, and then Barbara, who is thirty-two. Then, the notary notarizes the signatures. When the will is probated after Joshua dies, Joshua's daughter Angelica is upset because she does not receive as much of Joshua's estate as she expected to receive. If Angelica petitions to have the will invalidated based on Beth and Barbara witnessing the will, her efforts will:

does not have to pay Ramona's claim, because, at the time of the fire, Ramona had no insurable interest in the bar. ----------------------------------------------------- not be kept on life support. ----------------------------------------------------- administrator to carry out the provisions of Rhonda's will. ----------------------------------------------------- go to Laila. ----------------------------------------------------- fail because the witness requirements for validating a will were fulfilled.

A tenancy for years will last: ------------------------------- When a tenant wrongfully holds over from the term of their lease, it is called:

for a definite period of time. ----------------------------------------------------- a tenancy at sufferance.

Who may certify financial filings for the SEC? Choose 2 answer choices. ------------------------------- Willful violation under Section 807 of the Sarbanes-Oxley Act may result in: (Choose 2 answer choices.)

- A CFO - A CEO ----------------------------------------------------- - imprisonment up to 25 years. - fines

To whom does the Electronic Funds Transfer Act apply? ------------------------------- What does the EFTA require banks to do? Choose 2 answer choices.

The EFTA applies to financial institutions and customers. ----------------------------------------------------- - Make available receipts for ETF transactions on terminals - Provide statements for each month an EFT transaction occurs

You lost your high-paying corporate job six months ago when the company went out of business. After being out of work for four months, you finally find a job, but make much less money than you did before. At the same time, your debts have been rising dramatically due to some medical issues that resulted in large doctor and hospital bills. You start to consider filing for bankruptcy but are concerned that if you file for bankruptcy, you will lose your car. How would you get to work then? Do you think there is anything you can do to ensure that you don't lose your car if you file for bankruptcy?

Yes, you can reaffirm the debt.

Any partner: ------------------------------- Partners have which of the following duties?

may act as an agent who binds the partnership. ----------------------------------------------------- - Record keeping - Capital contribution - Fiduciary duties

If a secured party has perfected its interest, it has a legal interest against: ------------------------------- Which of the following is a PMSI?

the debtor and other creditors ----------------------------------------------------- A bank provides John a loan to purchase a refrigerator and retains a security interest in the refrigerator.

What parties could have a right to enforce a negotiable instrument? Choose 3 answer choices. ------------------------------- What party can enforce a negotiable instrument?

- An owner of the instrument who is not in possession of the instrument - A holder who lost a check - Anyone who falls under the Shelter Rule, even if he or she is a non-holder ----------------------------------------------------- An ordinary holder

Which activity is a duty or responsibility of a bank? Choose 2 answer choices. ------------------------------- Which of a bank's duties pertain to a properly signed and valid check? Choose 3 answer choices.

- Duty to report transactions to customers - Duty to detect forged signatures ----------------------------------------------------- - Stale Checks - Death of a Customer - Stop-Payment Orders

What duty of care does a bailee owe a bailor when the bailment is for the sole benefit of the bailee? ------------------------------- From each of the following bailments, select those in which the bailee will be strictly liable: (Select 2 answers)

The utmost care ----------------------------------------------------- - A freight moving company carrying goods for a company - A hotel which fails to provide a safe for guests

A finder of lost property: ------------------------------- Which of the following is true of mislaid property? Select 2 answers.

may claim title to the property against all others except the true owner. ----------------------------------------------------- - It is property that was inadvertently forgotten by the true owner. - The finder has a constructive bailment.

The board of directors manages: ------------------------------- The Board of Directors may conduct business: (Choose 2 answer choices)

the business and affairs of the corporation. ----------------------------------------------------- - at special meetings. - at regular meetings.

Consumer goods include which of the following? Choose 2 answer choices. ------------------------------- When does a PMSI perfect?

- a sofa - a stove for a residential kitchen ----------------------------------------------------- - automatically at the time of sale

Real property consists of which of the following? Select 3 answers. ------------------------------- Which of the following does NOT qualify an object as a fixture?

- fixtures - land - buildings ----------------------------------------------------- The object was in or on the property at the time of sale.

A debtor who wishes to file a voluntary petition must: (Choose 3 answer choices) ------------------------------- Creditors wishing to file an involuntary petition for a debtor may do so under:

- meet eligibility requirements for the Chapter under which they wish to file. - undergo credit counseling. - file the petition and required schedules ----------------------------------------------------- Chapter 7 or Chapter 11.

Nicole transferred a negotiable instrument to Andy. Andy later sues Nicole alleging a breach of presentation warranty. What could Andy claim Nicole has violated? ------------------------------- Millie did not sign a negotiable instrument. How could Millie be liable for an instrument without having signed it? Choose 3 answer choices.

Andy could allege that Nicole was aware of an unauthorized signature. ----------------------------------------------------- - Millie's authorized agent signed the instrument. - Millie was negligent by allowing people to think that she may have signed the instrument. - Millie decided she liked the terms of the negotiable instrument and ratified the instrument.

In order to form a bailment, the bailor must: ------------------------------- Which of the following scenarios represents an example of an involuntary bailment? Select 2 answers.

Deliver actual possession of personal property to the bailee. ----------------------------------------------------- - A customer mislaying a phone in a restaurant - A person forgetting to take home their cooler from their friend's cookout

Emily is a customer at First National Bank. Emily examined her bank statements closely and promptly, and Emily found that the bank paid a check she had not signed. Emily notifies the bank of this. Who would now be safe from liability in this situation? ------------------------------- What customer activity can override the liability of a bank for making incorrect payments on a customer's account? Choose 2 answer choices.

Emily ----------------------------------------------------- - A violation of a customer's duty to review bank statements - Customer negligence

You are running low on funds, so you ask your best friend for a loan. To show him how serious you are, you offer your Rolex watch as collateral. Your friend gives you $500, and you give him your Rolex to hold until you repay him, which you promise to do within three months. What do you think will happen if you refuse to repay the $500 to your friend?

He can keep the watch

A pledge has occurred in which of the following situations? ------------------------------- An attached security interest will legally protect a creditor against:

Sarah allowed her bank to hold a valuable painting that she owns, in exchange for the bank loaning her money. ----------------------------------------------------- the debtor.

You and your buddy want to start a new landscaping business. You equally invest in the equipment you need to get started. You will both be equally responsible for the work and will share the profits equally. After investigating the possible forms of business entities available, you decide a partnership would be the best for your landscaping business.' What do you think you might need to do to form a partnership?

You and your buddy just need to agree to be partners.

You are shopping for a new car. You find the perfect vehicle and are now applying for a loan from your local bank. Unfortunately, the bank rejects your application. You are surprised, because you have always paid your bills on time. You decide to examine your credit report. You discover that the credit agency is wrongly reporting that you are delinquent on a credit card bill. You have asked the agency to remove the inaccurate entry, but it has failed to do so. What liability does the credit agency face for its incorrect reporting?

Your actual damages, plus an additional amount not to exceed $1,000, plus attorney's fees.

Your friend just bought a new sports car, and it has to be picked up in Detroit. Your friend asks you to fly to Detroit and drive the car home for him. Because you are such good friends, you agree. On the way home from Detroit, even though you were driving carefully, you have an accident. Your friend has not even had time to get the car insured yet. Who do you think will be responsible for paying to repair the car?

Your friend

An involuntary dissolution may be brought about by: ------------------------------- During the winding up phase, which of the following is paid first?

a court order as the result of fraudulent acts by management. ----------------------------------------------------- creditors of the corporation

A written agreement outlining the roles of partners, their rights, and their duties are called: ------------------------------- The formation of a partnership without a partnership agreement requires which of the following? Select 2 answers.

a partnership agreement. ----------------------------------------------------- - Sharing of profits and losses - Sharing of management duties

To meet the standard for the duty of care, a person must: ------------------------------- Officers and directors owe which of the following duties to the corporation? Choose 2 answer choices.

act in good faith and with the judgment of an ordinarily prudent person. ----------------------------------------------------- - Duty of Loyalty - Duty of Care

A member-managed LLC means: ------------------------------- In a manager-managed LLC, the designated manager may: (Select 2 answers)

all members participate, and decisions are made by majority vote. ----------------------------------------------------- - be from within the members of the company. - be from outside the members of the company.

If an action is permitted expressly by the corporate bylaws, but is prohibited by state law, a corporation: ------------------------------- Which of the following defines the "implied powers" of a corporation?

does not have the power to act. ----------------------------------------------------- The right to perform all acts reasonably necessary to accomplish a corporate purpose

You live with your parents in a house they own. You are planning an outside barbecue and have invited numerous people. Three days before the event, the local power company begins work to replace underground pipelines in your front yard. The workers have dug up part of the ground. You are unhappy not only because the yard looks ugly, but also because the portion of the yard you intended to use for the party is now unusable. What interest does the power company have in your parents' property that allows the company to work on the pipes?

easement

A shareholder has the right to inspect the corporate books, if done: ------------------------------- Which of the following should be approved by shareholders? Choose 2 answers.

in good faith and for a proper purpose. ----------------------------------------------------- - An acquisition of the company by another company - A dissolution of the corporation

A will must be: ------------------------------- Select all of the requirements listed below that indicate whether a person has the mental capacity to make a will: (Select 2 answers)

in writing, signed, and witnessed. ----------------------------------------------------- - understanding the disposition of property that they are making through the will. - knowing the nature and extent of their property.

If an individual owns a piece of property and has the unlimited authority to use and sell the property, they: ------------------------------- In a tenancy in common: (Select 2 answers)

own the property in fee simple absolute. ----------------------------------------------------- - two or more people own the same piece of property. - co-owners may ask the court for a partition.

The formation of LLCs is governed by: ------------------------------- Which of the following is required in the Articles of Organization for an LLC? Select 2 answers.

the laws of the state in which the LLC is created. ----------------------------------------------------- - The name of the business - The principal place of business

When a person dies intestate, it means: ------------------------------- The person responsible for collecting assets and distributing them in accordance with a decedent's will is known as a(n):

the person did not leave a will. ----------------------------------------------------- executor

What is the required number of shareholder votes to seat a new director? ------------------------------- A proxy: (Choose 2 answer choices.)

It depends on the voting method used. ----------------------------------------------------- - allows shareholders' votes to be cast by another person or entity. - allows minority shareholders more control.

Marvin places his telephone number on the national do-not-call list. After six months, Marvin is still receiving telemarketing calls. Particularly annoying to Marvin are the robocalls - those autodialed, prerecorded commercial telemarketing messages! Marvin hates telemarketing calls anyway, and if a live person cannot take the time to actually place the call, Marvin sure has no use for them. Marvin files a complaint with the Federal Trade Commission (FTC) about the robocalls. Marvin could also sue the companies that placed the calls. If Marvin chooses to sue the companies that placed the calls: ------------------------------- Estes is behind on his credit card payments. Veronica works in the collection department of the credit card company that provides Estes with his credit cards. Veronica is working on Estes' file and is trying to come up with a plan to get Estes' accounts paid up to date. Veronica calls Estes every few days but has trouble getting in contact with Estes. Veronica does a little investigating and discovers that Estes leaves for work at 7:30 a.m. Therefore, Veronica decides to start placing her telephone calls to Estes at 7:00 a.m. Veronica calling Estes at 7:00 a.m. to attempt to collect a debt: ------------------------------- Miran opens a new bar called the Rustic Cowboy. Evelyn lives in an apartment above the bar. Every night, the smell of smoke from the bar permeates Evelyn's apartment, and the loud noises coming from the bar make it impossible for her to sleep. If Evelyn successfully sues Miran over the smoke and noise coming from the bar: ------------------------------- Ernie is a supervisor in the maintenance department of Big Chem Company. Ernie is responsible for properly disposing of any hazardous waste that Big Chem produces. Ernie wants to save the company money and save himself what he considers to be unnecessary work, so Ernie decides to dump the hazardous waste in a local stream instead of properly disposing of the waste. Under the Resource Conservation and Recovery Act (RCRA), Ernie's action can result in some pretty severe penalties, including: ------------------------------- Milo is going over the procedures that her manufacturing plant has for disposing of its wastewater. The plant has two point sources: one discharges into a self-contained large lake and the other is piped into a river near the state border at a point just before the river flows into a neighboring state. Under the Clean Water Act (CWA), Milo must obtain a permit for:

Marvin could recover from $500 to $1,500 per call. ----------------------------------------------------- would violate the Fair Debt Collection Practices Act. ----------------------------------------------------- the court will issue an injunction against Miran requiring him to stop the noise and smoke that is interfering with Evelyn's quiet enjoyment of her property. ----------------------------------------------------- civil fines, criminal fines, and/or imprisonment. ----------------------------------------------------- only the point source that discharges into the river.

What party to a negotiable instrument is involved with both an order to pay and a promise to pay? ------------------------------- Which party is involved with a certificate of deposit? Choose 2 answer choices.

Payee ----------------------------------------------------- - Maker - Payee

Mara Raj was hired to serve as Chief Executive Officer of Washington Retirement Home, Inc., a corporation that ran the Washington Retirement Home nursing home. When Ms. Raj took over as CEO, the nursing home had been in financial trouble for decades and only had stayed open because of donations from private foundations and some financial help from the local government. The financial problems became worse while Raj was serving as CEO. In addition, the home repeatedly was cited for violations of the state health code at a rate three times the average for the state. Billing records and patient medical records were disorganized and financial information was not tracked with the exception of a monthly review of the bank statements. As a result, the home failed to collect over $500,000 owed to it by patients. Two patients died under suspicious circumstances and shortly thereafter the nine-member Board of Directors voted to close the home. Several shareholders sued Raj, alleging that they would have received more of a payout in the closure of the company if Raj had been more diligent as CEO. Did Raj breach her duties as an officer of the corporation?

Officers of a corporation are considered to be directors (WRONG) of the corporation. Raj, as an officer of Washington Retirement Home, Inc., owed the corporation a duty of care, which means she must act with reasonable intentions (WRONG), exercise the care of a ordinarily intelligent (WRONG) person, and act in the best interests of the corporation. Officer have a duty to make absolute (WRONG) decisions. While Raj was an officer of Washington, the company did not keep accurate financial records. As a result of the record keeping, Washington failed to collect over $500,000 in income. A failure to keep accurate records and the resulting lack of collections would be considered negligence by the officer. Washington's shareholders alleged that they were paid too little when the business closed. If the shareholders suffered financial harm because of Raj's actions, Raj would be liable for negligence unless the business judgment rule applies. This rule applies as long as the officer took reasonable steps to be informed about problems, had a rational basis for a decision, and did not have a conflict between personal and company interests. What If the Facts Were Different? In these circumstances, it is (WRONG) likely that the business judgment rule will apply. In analyzing Raj's actions, it is most likely that Raj did breach her duty of care to the corporation. What If the Facts Were Different? In this situation, Raj had regular meetings with her CFO and asked reasonable questions. Raj performed reasonable reviews of the financial statements. Raj likely did not violate her fiduciary duties.

Any person who knowingly fails to include a material fact on a registration statement can be held liable under: ------------------------------- Which of the following is one of the elements of liability under Section 10(b) of the Securities Exchange Act of 1934?

Section 11 of the Securities Act of 1933. ----------------------------------------------------- Use of the mail or facilities of interstate commerce

Which of the following is true about easements appurtenant? ------------------------------- Land burdened by an easement is called:

They "run with the land." ----------------------------------------------------- the servient estate.

Limited liability means: ------------------------------- Owners of the following business associations have limited liability protection: (Select 2 answers)

owners are only liable to the extent of their capital contribution to the business. ----------------------------------------------------- - limited liability companies. - limited liability partnerships.

You participate in Black Lives Matter protests and have begun studying the issues raised about police officers. Your local protest group believes the budget of the local police department should be made public as well as the training manuals used to prepare recruits for the job. You and the group want this information to help assess the effectiveness of the police department. For example, is the money well spent? Is training appropriate? What law enables citizens to obtain information from the government about a subject of interest when a written request is made?

Freedom of Information Act

Agency rules are similar to statutes because of which one of the following? ------------------------------- What is the role of an administrative law judge (ALJ)?

They are legal requirements and binding as if Congress has passed them. ----------------------------------------------------- An ALJ is an employee of the agency bringing the charges.

If a credit reporting agency fails to remove known errors in a consumer's credit report after request by the consumer, the agency: ------------------------------- Which of the following behaviors is prohibited under the FDCPA? Choose 2 answer choices.

may be required to pay damages to the consumer. ----------------------------------------------------- - Calling a consumer at 3 a.m. - Notifying a consumer's neighbor that they are in debt

While shopping in your local Wal-Mart store, you slip and fall on a wet spot in the grocery aisle. You break a hip, incur huge medical bills, and miss several weeks at work. You know that Wal-Mart is a huge corporation and that thousands of people own stock in Wal-Mart, so you start thinking about who you can sue to recover for your injuries. What do you think would happen if you tried to sue not only Wal-Mart but also all the people who owned stock in Wal-Mart?

Only Wal-Mart might be held responsible.

When Rose Valley Resort Co. (RVRC) was developing its ski resort in the Wasatch Mountains near Park City, Utah, it sold parcels of land in the resort village to third parties. Each sales contract reserved the right of approval over the conduct of certain businesses on the property including ski rentals. For fifteen years, RVRC permitted Sheila Sports, LLC, to rent skis in competition with RVRC's ski rental outlet. When RVRC opened a new mid-mountain ski rental outlet, it revoked Sheila's permission to rent skis. This meant that most skiers who flew into Salt Lake City and shuttled to Rose Valley had few choices: they could carry their ski equipment with them on their flights, take a shuttle into Park City and look for cheaper ski rentals there, or rent from RVRC. Sheila filed a suit in a federal district court against RVRC. Was RVRC's action an attempt to monopolize in violation of Section 2 of the Sherman Act?

To prove monopoly power indirectly, the plaintiff must show that the firm has a dominant share of the relevant market and that there are significant barriers for new competitors entering the market. Because RVRC created a situation where competitors could not enter the market in any close location and likely could control prices on the mountain, RVRC did have monopoly power. To determine relevant market, courts look at products that are identical or interchangeable and that are sold in the same geographic area. In this situation, due to the location of the ski resorts, it is likely that the relevant market test is met. In addition to monopoly power and relevant market, a firm must have the intent to monopolize. If the monopoly power in the relevant market comes about because of good business decisions, a superior product, or historic accident as opposed to engaging in anticompetitive behavior, there is no violation of the antitrust laws. In this case, RVRC did not unilaterally refuse to deal with Sheila and did not underprice its products to drive Sheila out of business. RVRC did exercise the historic contractual option to revoke permission to Sheila to sell or rent skis in order to improve its own profits. This would not be considered an illegal anticompetitive behavior. Therefore, RVRC likely did not violate Article 2 of the Sherman Act. What If the Facts Were Different? If RVRC made the decision to terminate a profitable relationship with Sheila without any economic justification and without the historic contract provision so that it could be the sole provider of ski rentals in its market, it likely would be an attempt to monopolize under Article 2 of the Sherman Act because the intent factor that was missing in the original situation would now be present.

You are thinking about buying a restaurant with some of your buddies from college. One of the first things you need to discuss is what kind of business entity you want to create. You want to make sure that you are liable for only what you do, not what any of your buddies do. However, you're also concerned about getting the best tax deal. Do you think there is a way to organize your business so that you are not liable for your buddies' actions or debts without risking paying more taxes?

Yes, you could organize your business as a limited liability company.

Jerry Hall and Lawrence Vaught practice law in the same building. They share equally in the overhead expenses, such as rent and utilities, required to keep the business running. Both Jerry and Lawrence handle their own cases, consult and accept their own clients, and purchase their own advertising. Jerry and Lawrence do occasionally handle a case together, and they have stationery that says "Hall and Vaught" on the letterhead. They each have their own stationery as well. Jerry and Lawrence keep their finances separate, except when they handle a case together; then, they split the proceeds equally. When a client of Jerry's becomes dissatisfied and sues Jerry for malpractice, she sues Lawrence as well. In deciding whether or not a partnership exists here, the court will look at: ------------------------------- Ellie, Josie, and Dylan are partners in a car dealership. Ellie gives notice to Josie and Dylan that she wants to withdraw from the partnership, and Josie and Dylan decide to continue the partnership without her. Shortly after Ellie leaves the partnership, she has lunch with an old friend, Justin. Justin has been looking for a new car and asks about the price of a particular car he saw on the website of the dealership, because he does not know that Ellie has left the partnership. Instead of telling Justin that she has left the partnership, Ellie quotes Justin a price for the car, and Justin accepts. When Justin goes to the car dealership to complete the deal: ------------------------------- Ben and Jerry are partners in an ice cream shop. They both work in the ice cream shop and share profits and expenses equally. Jerry thinks that expanding their ice cream shop to include a soda fountain would attract more customers. Without getting Ben's approval on the deal, Jerry signs a contract with the construction company to begin building the soda fountain. When Ben finds out, he is furious and says that he will not be responsible for payment under the contract. The construction company can enforce the contract against: ------------------------------- Ellie, Josie, and Dylan are partners in a car dealership. Ellie gives notice to Josie and Dylan that she wants to withdraw from the business. As a result of Ellie leaving the partnership, Josie and Dylan: ------------------------------- Bly and Ahmik are partners in a sandwich shop. They have been struggling for the last couple of years and, finally, decide to close the sandwich shop and dissolve the partnership. During the winding-up process, Ahmik spends most of his time pursuing his next venture, so Bly is handling most of the work involved in collecting and preserving partnership assets and paying the debts of the partnership. If Bly requests payment for his services in winding up the partnership:

whether Jerry and Lawrence share profits and losses, whether they own the business jointly, and whether they have an equal right to be involved in the management of the business. ----------------------------------------------------- the dealership must honor the deal unless it has provided Justin notice of Ellie's dissociation. ----------------------------------------------------- both Ben and Jerry. ----------------------------------------------------- can either continue the partnership without Ellie or agree to dissolve the partnership. ----------------------------------------------------- he is entitled to payment for those services.

Which of the following are essential elements of a partnership? Choose 2 answers. ------------------------------- Which of the following are advantages of operating as a partnership? Choose 2 answers. ------------------------------- Which of the following is a disadvantage of operating as a partnership? ------------------------------- Agreements to form a partnership may be: (Choose three) ------------------------------- A general partnership differs from a limited partnership in: (Choose 2 answers.) ------------------------------- A partnership in which the liability of all the partners is limited to the amount of their capital investment in the firm is called a: ------------------------------- What are the three ways in which a partnership can be dissolved? (Choose 3 answers.) ------------------------------- Which of the following actions will usually dissolve a partnership? ------------------------------- At what point in dissolution does a partner's liability cease? ------------------------------- After dissolution, partners still have authority to do which of the following actions on behalf of the partnership? Choose 2 answers.

- Profits and losses are shared among the members. - All members have equal right to be involved in the management of the business. ----------------------------------------------------- - Forming a partnership is simple and relatively inexpensive. - Partnerships are not taxed. ----------------------------------------------------- Partners may suffer financial loss if the partnership is not profitable. ----------------------------------------------------- - written. - oral. - implied by conduct. ----------------------------------------------------- - the documents required for creation. - a partner's management rights. ----------------------------------------------------- limited liability partnership. (WRONG) limited partnership. (WHAT I THINK IS THE CORRECT ANSWER) ----------------------------------------------------- - by a court decree - by operation of law - by an act of the partners ----------------------------------------------------- completion of the purpose of the partnership ----------------------------------------------------- after the winding up is complete and the partnership is dissolved ----------------------------------------------------- - pay the debts of the partnership - complete transactions that were started before dissolution

When establishing a takeover defense, which of the following must be the board's primary concern? ------------------------------- Which of the following is a defense in which the target corporation sells of its most valuable or desirable asset?

The wellbeing of the corporation ----------------------------------------------------- Crown Jewel aka Scorched Earth

Genna and four others are establishing a business to create monogrammed items of personal clothing to sell to the general public. Genna is concerned about entering into business with others and possibly being liable for their actions, so she convinces the others that they should incorporate. After doing some basic research on how to incorporate a business, Genna starts preparing the articles of incorporation. At a minimum, Genna must make sure that the articles of incorporation include: ------------------------------- Kelly lives in Arkansas and works in the data division of Acxiom Corporation. Acxiom has its headquarters in Conway, Arkansas. Acxiom is incorporated in Delaware, however, because of the corporate-friendly laws in that state. Kelly works in a(n): ------------------------------- Mork and Mindy create a for-profit corporation, Mork's House, to provide shelter to homeless and abused women and children. Mork and Mindy are shareholders of the corporation. Zada is also a shareholder in the corporation, along with five others. Douglas manages the day-to-day operations of the corporation. The bylaws of the corporation provide that the corporation is established for the sole purpose of providing shelter, food, and care for homeless and abused women and children and for no other purpose. When the refrigerator in Mork's House stops working, Douglas purchases a new refrigerator from Home Depot and charges it to the corporation. If Zada challenges the purchase as going beyond the powers of the corporation: ------------------------------- Julian is a shareholder in Big Bang Corporation. Big Bang has had an excellent year and declares $5,000 in dividends to its shareholders. Julian is elated, because he can really use that $5,000. When Julian receives his dividend check, it will be in the amount of: ------------------------------- Mason is the CEO and sole shareholder of Mason Products, Inc., a corporation that manufactures and sells bird calls. Mason regularly uses the corporate credit card to purchase personal items, including furniture and clothes, and even makes monthly payments on his Corvette using the corporate credit card. When Mason Products becomes insolvent, its creditors file suit against Mason personally to seek payment for corporate debts. In this situation, the court is likely to:

the name of the corporation, the number of shares of stock the corporation is authorized to issue, the name and street address of the initial registered agent of the corporation and his or her registered office, and the name and address of each incorporator. ----------------------------------------------------- foreign corporation because Acxiom is incorporated in a different state than the division where Kelly works. ----------------------------------------------------- she will lose, because purchasing the refrigerator falls under the implied powers of the corporation. ----------------------------------------------------- $5,000 minus taxes, because even though the corporation pays taxes on its profits, shareholders must also pay taxes on dividends. ----------------------------------------------------- pierce the corporate veil and hold Mason personally responsible.

Your late aunt Gertrude left you a couple of shares of Microsoft in her will, which she bought for you on the day you were born. Recently, there have been rumors of Microsoft acquiring a well-known social media app which you frequently use. You think this is a great idea and would like to have your (very small) voice be heard as a shareholder of Microsoft. Must Microsoft get the approval of you, and other shareholders, before acquiring the other company?

No, if the transaction is a purchase of assets.

Alejandro is the owner of Mex-To-Go, a popular food truck from which he serves his favorite Mexican foods. During the spring, he likes to park his food truck near the city's little league baseball field because of the heavy evening traffic. He leases a small plot of land next to these fields for the months of March, April, and May. Alejandro's lease is a: ------------------------------- Sabrina owns an apartment complex in upstate New York. One of her renters, Salvo, informs her in January that the heating unit has stopped working in his apartment. Sabrina promises to fix the problem, but two weeks later, the heating unit is still not working. Salvo may: ------------------------------- After acquiring three new rental properties, Savannah made improvements to them. In the first property, she installed ceiling fans in each bedroom. In the second, she laid out decorative throw rugs in the living room. In the third, she had a new central air unit installed. Six months later, she decides to sell the properties and is wondering which of these improvements she can remove from the properties and keep for herself. Of the three improvements, Savannah CANNOT remove: ------------------------------- A new north-south interstate highway was being planned, and the route for the interstate went straight through Roy's property. Roy received a notice from the city stating that his property would be condemned and setting a hearing on the matter. Roy appeared at the hearing to contest the action, saying he had lived in this house for forty years, and strenuously objected to the city taking his property! The probable result is that: ------------------------------- In Suzanne's will, she left her home and five acres to her niece, Abrhianna. However, before her death, Suzanne sold the property to Clark, providing a deed in fee simple. At the moment of Suzanne's death, who owns the property?

tenancy for years. ----------------------------------------------------- vacate the apartment, and Sabrina will be liable for any expenses he incurs. ----------------------------------------------------- the ceiling fans and central air unit because they would be considered fixtures. ----------------------------------------------------- the city may take the property under the principle of eminent domain since it is for a public use, as long as it pays Roy just compensation. ----------------------------------------------------- Clark owns the property.

Is Evelyn's estranged husband entitled to any of her assets in the event of her death? ------------------------------- If a Will is invalidated because the court found the Will was not properly executed by a competent adult, but the trust was determined to have been properly executed, what will happen to Evelyn's assets? ------------------------------- What amount would each of Evelyn's grandchildren be entitled to if the total distribution share to her children was $20 million, but all her children had predeceased her? ------------------------------- If Jessup dies before age 40 (but after the death of Evelyn), what will happen to his share of Evelyn's estate? ------------------------------- Barbara, unhappy that her mother left Kit a sizable inheritance, believes that Kit exerted undue influence on Evelyn. In order for the court to declare the plan of distribution invalid, Barbara must prove that Evelyn did not exercise free and independent judgement:

- Yes, because as a spouse, he is entitled to inherit all of her assets. (WRONG) - Yes, because he is entitled to a share of the estate even if she has tried to cut him out. (WHAT I THINK IS CORRECT) ----------------------------------------------------- All of the assets already titled in the name of the trust would transfer, per its terms, and any assets outside of the trust would transfer via statute as if she had died intestate. ----------------------------------------------------- - Savannah and Sharon will get $1 million each, and Marissa will get $2 million. (WRONG) - Savannah and Sharon will get $5 million each, and Marissa will get $10 million. (WHAT I THINK IS CORRECT) ----------------------------------------------------- Marissa takes nothing; but the remaining beneficiaries will receive an additional distribution. ----------------------------------------------------- by clear and convincing evidence.

Solo Services, Inc., was a trucking company established in 2005 and owned by Toby Solo as the sole shareholder. Toby Solo also was the president of the company. Toby Solo set up an account with Lakes Express, a fuel provider, on behalf of Solo Services, Inc., and his drivers often would charge fuel purchases for the company trucks to that account. Lakes Express then would bill Solo Services regularly for the charges on the account. After several months of low business, Solo Services ceased doing business and was dissolved in 2018, with its assets being distributed to creditors. Lakes Express only recovered a small part of the amount owed by Solo Services, Inc. Toby Solo then opened up a new trucking service business as a sole proprietor. Lakes Express sought to recover Solo Services' unpaid fuel charges, which amounted to about $35,000, from Solo. Solo argued that he was not personally liable for a corporate debt. Should a court hold Toby Solo personally liable?

Solo Services, Inc. was a corporation . A business of this type is considered a separate legal entity from its owners. When Toby Solo set up an account for Solo Services, Inc. with Lakes Express, Solo Services, Inc. would be liable for any charges on that account. Toby Solo was a shareholder in Solo Services, Inc. One of the advantages of being a shareholder in a corporation is the limited liability of shareholders. The principle of limited shareholder liability means that shareholders are not personally liable for the debts of the corporation beyond their investment in the corporation. If Solo Services, Inc., was dissolved, and assets were distributed, then Toby Solo likely lost the value of his investment. Toby Solo might have had assets outside of the company that he would have been allowed to keep when the company was dissolved. If Lakes Express is attempting to receive payment from the extra assets of a shareholder, it would be asking the court to pierce the corporate veil. Courts will ignore the corporate structure and make the shareholder-owners personally liable when the corporate structure is abused for personal benefit or when the corporate form is indistinguishable from the controlling shareholder. In this situation, it does not appear that Lakes Express was tricked into dealing with the corporation instead of the individual. Given the life of the corporation, it does not appear that the corporation was set up to always be insolvent, or was undercapitalized. It also does not appear that the corporation was formed to evade a legal obligation. There is no evidence that the corporate formalities were not followed and there is no evidence that Toby Solo commingled funds. Given these facts, a court should not pierce the veil of Solo Services, Inc., and hold Toby Solo personally responsible for the debt. Assume that in addition to the facts given, that evidence was presented to the court that Solo, his wife, and their kids regularly used the account at Lakes Express to fill up their personal vehicles. Does this change the outcome? Given this new evidence, a court likely would not find that Lakes Express was tricked or misled into dealing with the corporation rather than the individual. The court likely would not find that the corporation was undercapitalized, created to evade an existing legal obligation, or failed to comply with the required corporate formalities and meetings. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Lakes Express. Because of these findings, the court likely would pierce the corporate veil and hold Toby Solo personally responsible for the debt to Lakes Express.

You are studying to be an accountant. During school breaks, you work part-time at a large company that sells its stock on the stock exchange. To help you understand how investments work, you bought 100 shares of stock in this company. While doing the bookkeeping, you discover the company just had a very bad financial quarter. You anticipate the price for the company stock will fall substantially once that information is made public. You decide to sell your shares immediately to avoid a significant loss. You direct your stockbroker to sell your stocks and are able to complete the transaction before this news gets out. Have you done anything illegal by selling your stock when you did?

Yes, you will be liable for insider trading based on the misappropriation theory.

Which of the following is a duty of both corporate directors and corporate officers? ------------------------------- Which of the following actions show a failure to uphold the duty of loyalty expected of corporate directors? Choose 2 answers. ------------------------------- A corporate officer, as an agent of the corporation, has a duty of loyalty to make decisions that will benefit: (Choose 2 answers.) ------------------------------- What principle protects corporate directors and officers from liability for bad decisions if they are made as honest mistakes rather than in negligence? ------------------------------- What is the role of directors in a corporation? Choose 2 answers. ------------------------------- The management responsibilities of the board of directors of a corporation include: (Choose 3 answers.) ------------------------------- In ordinary circumstances, when the corporate veil has not been pierced, a shareholder may be liable for: ------------------------------- Common shareholders have the right to vote on: ------------------------------- Which of the following are rights of common shareholders? Choose 3 answers. ------------------------------- Along with a claim on assets, shareholders may also receive a portion of profits the company pays out in the form of a:

making a full disclosure of potential conflicts of interest ----------------------------------------------------- - using information that is not public knowledge to make a profit on purchases or sales of the company's stock - running a small side business that competes with the corporation ----------------------------------------------------- - the stockholders. - the corporation itself. ----------------------------------------------------- - reasonable culpability (WRONG) - the business judgment rule (WHAT I THINK IS CORRECT) ----------------------------------------------------- - Directors make policy decisions necessary for the management of the company. - The directors are trustees, holding title to the corporate property for the benefit of the corporation. (WRONG) - The board of directors selects and removes the corporate officers. (WHAT I THINK IS CORRECT) ----------------------------------------------------- - making personnel decisions on the executive level and setting compensation for officers. - authorizing corporate policy decisions such as pursuing new product lines. - making financial decisions about when to declare dividends. ----------------------------------------------------- unpaid amounts on the shares held by that shareholder. ----------------------------------------------------- proposals for fundamental changes affecting the company such as mergers or liquidation. ----------------------------------------------------- - voting on matters such as election of directors and proposals for mergers or liquidation - opportunity to inspect corporate books and records - transferable ownership ----------------------------------------------------- dividend.

If Amira and Sujat, during a family vacation, discuss the change of tire suppliers and make an agreement that neither would purchase tires from Tova Tires, has a conspiracy to restrain trade occurred between the two? ------------------------------- Could Tova, as a non-U.S. based company, sue under the Sherman Act? ------------------------------- If Sujat continues to purchase tires from Tova, but Amira unilaterally boycotts Tova as part of a personal alliance to the BDS Movement, can Amira's actions still be considered a "concerted action" because she has cooperated with other companies and industries boycotting Israeli products in violation of antitrust laws? ------------------------------- If Tova sues under the Sherman Act, what standard would the court most likely apply? ------------------------------- If General Vehicles, alone, has significant market share and purchases more tires than any other company in the United States, could their refusal to purchase tires from Tova, even without a concerted action, be a violation of the Sherman Act under Section 2?

- No, because there is not sufficient evidence of a concerted action. (WRONG) - Yes, a vertical restraint of trade has probably occurred. (WHAT I THINK IS CORRECT) ----------------------------------------------------- Yes, because there would be a direct, substantial and foreseeable effect on the U.S. market. ----------------------------------------------------- - No, because there was not a "concerted action" because Amira has not agreed with any other business to boycott Tova, and Sujat still purchases tires from Tova. (WRONG) - No, because it is part of Amira's personal belief system and that cannot be imputed onto the business. (WHAT I THINK IS CORRECT) ----------------------------------------------------- - The Rule of Reason. (WRONG) - Quick look Rule of Reason (WHAT I THINK IS CORRECT) ----------------------------------------------------- No, a refusal to deal by a company with market share, but is not a monopoly, is not a violation.

Jamal has a severe heart attack and is taken to the hospital. He is aware that he is not expected to live. Because he is a bachelor with no close relatives nearby, Jamal gives his car keys to his close friend Fernando, telling Fernando that he is expected to die and that the car is Fernando's. Jamal survives the heart attack, but two months later he dies from pneumonia. Saeed, Jamal's uncle and the executor of his estate, wants Fernando to return the car. Fernando refuses, claiming that the car was a gift from Jamal. Will Fernando be required to return the car to Jamal's estate?

A gift is a voluntary transfer of property for which no consideration is given. For a gift to be effective, there must be donative intent on the part of the donor , actual or constructive delivery , and acceptance by the donee. When a gift is given in anticipation of imminent death, it is called a gift causa mortis and must comply with additional rules. The additional rules for a gift causa mortis are that the gift is not absolute until the donor dies from the contemplated event, and the gift is automatically revoked if the donor survives the contemplated event. Because Jamal was in the hospital after a severe heart attack and did not believe he would survive, if his actions resulted in a gift it would be a gift causa mortis. Jamal's action of handing the keys to Fernando and telling Fernando that he expected to die so the car is Fernando's would indicate the intent to make a gift, as well as constitute the delivery of the gift to Fernando. When Fernando took the keys and began driving the car, it was an acceptance of the gift. In giving the gift, Jamal was anticipating his death due to the heart attack. When Jamal survived it, the gift likely was revoked. If the gift was revoked, then Fernando does have to return the car to Jamal's uncle. What If the Facts Were Different? This gift would be a gift inter vivos. With this situation, the additional requirement that the donor die of the expected cause would not apply. In this situation, Jamal would not have to give the car to Fernando in order for the gift to be complete.

The Okoros and the McGowans are adjacent property owners. There is a fence, built in the late 1940s, separating their properties. The Okoros bought their property in 1973 from the Bard family with a warranty deed recorded in the appropriate government office. The Bard family had purchased the property from the Colin family in 1945, also with a warranty deed recorded in the appropriate government office. The Okoros attempted to sell their property and a dispute arose regarding the boundaries of the property. The property in dispute consisted of 34.28 acres in a heavily wooded area behind the residences. The disputed property was on the McGowans' side of the fence, but the Okoros argued that the deeds clearly outline the disputed property as part of their land. To trace their ownership, the Okoros produced the 1945 deed which described the land in great detail, using metes and bounds, and clearly included the 34.28 acres. The Okoros also produced the 1973 deed which Included a general description using the words, "the tract described in the 1945 deed from Colin to Bard." In other words, in the 1973 Deed's general description, the Bard family claimed to convey their entire parcel obtained through the 1945 Deed, including the 34.28 acres in dispute. In contrast, the 1973 Deed's metes and bounds description did not contain the 34.28 acres. Instead, the 34.28 acres were directly next to the property described by the metes and bounds in the 1973 deed. Who owned the property?

A warranty deed promises the buyer that the seller does have title to, and power to convey, the land being sold. The 1945 deed clearly conveyed the disputed tract from the Colins to the Bards. The general description in the 1973 deed seemed to include the disputed acreage. The metes and bounds description in the 1973 deed did not include the disputed acreage. In this situation, the general description of the land being conveyed did conflict with the metes and bounds description. A deed must include a legally sufficient description of the land, either by reference to an official survey or recorded map or by the system of metes and bounds. In this case, the description contained in the metes and bounds will control and the Okoros do not own the property. Because the land was not transferred to the Okoros, it would be owned by the Bards. What If the Facts Were Different? In this situation, there is not a conflict in the 1973 lease. Because of this, a court would interpret the 1973 lease to include the disputed acreage, and the 1973 deed would convey the disputed property to the Okoros. The McGowans would claim the ownership of the land through adverse possession. The McGowans did possess the land in an actual and exclusive; open, visible, notorious; hostile and adverse; and in a continuous and peaceable manner for the required time period. The McGowans would have a reasonable claim to ownership of the property.

Assume that when Tristan made the agreement with the PR Firm, he failed to read the agreement closely. Instead of agreeing to a one-time payment of $20,000, Tristan actually agreed to monthly payments for $20,000 over the course of the next year. If a court upholds the contract as being valid, could Vlad and Lea's personal assets be at risk if it is determined they are partners? ------------------------------- Did Tristan exceed his authority when he signed the contract for PR services on behalf of the business if he did not disclose it to Vlad and Lea prior to signing? ------------------------------- Assume Vlad is presented with an opportunity from another tech company to develop software for a music sharing platform. By coincidence, a portion of the code he developed for the social media app could be used in the music sharing platform. Vlad doesn't feel the need to disclose it to the group because he believes the opportunity doesn't involve anything that impacts Tristan or Lea and they would never know that he reused the code. What is the best argument Tristan and Lea have against Vlad for violating their financial rights? ------------------------------- Assume a partnership exists between Vlad, Lea, and Tristan and the state in which the business exists has the following statute: "§177.1 (a) No partner shall have the right to withdraw any portion of partner's capital contribution until the dissolution of the partnership or rightful disassociation of the partner; (b) A payment or advance made by a partner to cover the obligation of a partnership constitutes a loan to the partnership which accrues reasonable interest from the date of the payment or advance." What is Lea's strongest argument for why she is entitled to a payment of $63,333 as opposed to $50,000? ------------------------------- What is Vlad's best argument for why Lea should not be considered a partner?

Yes, they can be held personally liable if the partnerships assets are insufficient to cover the debt. ----------------------------------------------------- Not if a partnership exists because all partners are agents of the partnership for the acts occurring within the course of ordinary partnership business and neither Vlad nor Lea repudiated the transaction. ----------------------------------------------------- The code is protected as intellectual property of their partnership, and he has therefore appropriated property of the partnership. ----------------------------------------------------- Her contribution of $20,000 represented a loan to the business for which she is entitled to repayment in addition to a 1/3 share of the remaining profits ($43,333) as a partner. ----------------------------------------------------- Lea did not participate in the management of the business. She merely made what amounts to a loan to the company.

Which of the following is the proper order for the payment of bankruptcy claims by class from highest priority to lowest priority? ------------------------------- Assuming there are not enough assets to pay the debts of an entire class of creditors, creditors must:

Secured claims, priority claims, unsecured claims ----------------------------------------------------- be paid at a pro rata share.

The simplest form of business to establish is a: ------------------------------- Which statement is true about creating a sole proprietorship? ------------------------------- In terms of personal liability of the owner, a sole proprietorship: ------------------------------- The owner of a sole proprietorship pays the following taxes on business income profits: (Choose three). ------------------------------- A sole proprietorship differs from a corporation in: ------------------------------- When the owner of a sole proprietorship dies, what happens? ------------------------------- Which of the following is a disadvantage of operating as a sole proprietorship? ------------------------------- Which of the following are advantages of operating as a sole proprietorship? Choose 2 answers. ------------------------------- What is the combination of factors that sets sole proprietorships apart from all other business entities? ------------------------------- A sole proprietorship has flexibility in decisions regarding: (Choose 2 answers.)

sole proprietorship. ----------------------------------------------------- No documentation is required to create a sole proprietorship. ----------------------------------------------------- offers no protection. ----------------------------------------------------- - Medicare - Social Security - Personal income ----------------------------------------------------- how stock is sold. ----------------------------------------------------- The business is dissolved. ----------------------------------------------------- The owner of a sole proprietorship is personally liable for all business debts. ----------------------------------------------------- - Sole proprietorships are not taxed. - Forming a sole proprietorship is simple and relatively inexpensive. ----------------------------------------------------- ease of formation, along with receiving all of the profit ----------------------------------------------------- - pricing of services or goods sold. - when to schedule vacation.

Which of the following is a requirement for the initial formation of a corporation? ------------------------------- Which of the following provisions are typically in a charter for a corporation? Choose 2 answers. ------------------------------- A corporation that is formed in one state but does business in another state is referred to in the second state as: ------------------------------- What type of corporation is formed for the purpose of doing a public service instead of making money? ------------------------------- Which type of corporation is taxed like a partnership, with shareholders paying personal income tax on business income? ------------------------------- What documents spell out the powers of a corporation? Choose 2 answers. ------------------------------- What is true of the tax liability of C corporations? ------------------------------- How does the governance of a closely held corporation compare to the statutory model of corporate governance? ------------------------------- In which of these situations might a court pierce the corporate veil? Choose 2 answers. ------------------------------- Who is liable for contracts entered into on behalf of the corporation before the corporation is formed?

Articles of Incorporation ----------------------------------------------------- - the intended business purpose of the corporation - the name and address of the corporation's agent ----------------------------------------------------- a foreign corporation. ----------------------------------------------------- nonprofit ----------------------------------------------------- S corporation ----------------------------------------------------- - the charter (also called the articles of incorporation) - the bylaws ----------------------------------------------------- C corporations pay taxes on profits at the corporate level. ----------------------------------------------------- They are very different, with shareholders having more influence in a closely held corporation than in the statutory model. ----------------------------------------------------- - Personal and corporate money is mixed together in one account. - The corporation does not have sufficient capital to operate and meet its debts. ----------------------------------------------------- the promoter

The U.S. Department of Justice (DOJ) has the sole authority to prosecute violations of which of the following antitrust laws? ------------------------------- Federal agencies enforcing antitrust laws may ask the courts to order a company to cease its operations and liquidate all of its assets in a process known as: ------------------------------- Treble damages are awarded to a private plaintiff for antitrust violations and are assessed as a multiplier of three to which type of damages? ------------------------------- The Sherman Antitrust Act prohibits businesses from joining together to do which of the following? Choose 2 answers. ------------------------------- Price discrimination that is not justified by differences in costs, such as production costs or transportation costs, is prohibited by the: ------------------------------- What is the practice called when a business prices its goods or services so low that other businesses can no longer compete and are driven from the market? ------------------------------- The range of activities that tend to unfairly limit or have a substantial impact on interstate commerce, which are prohibited by the Sherman Antitrust Act and other antitrust laws, are known generally as: ------------------------------- The Robinson-Patman Act amended the Clayton Antitrust Act by strengthening which of the following? Choose 2 answers. ------------------------------- Some of the negative impacts of monopolization on markets include: (Choose 3 answers.) ------------------------------- Market power is defined as the ability of a business to:

the Sherman Antitrust Act ----------------------------------------------------- dissolution. ----------------------------------------------------- actual damages ----------------------------------------------------- - to control prices within an industry - to form a monopoly ----------------------------------------------------- Robinson-Patman Act. ----------------------------------------------------- predatory pricing ----------------------------------------------------- restraint of trade. ----------------------------------------------------- - the prohibitions against price discrimination - the penalties for price discrimination ----------------------------------------------------- - product quality and innovation suffer. - too few goods are produced for market needs. - inflated pricing. ----------------------------------------------------- manipulate pricing, supply, and demand of a product or business in the market relative to its competitors.

The process by which two or more corporations combine in such a way that only one of the original corporations continues to exist after the combination is called a: ------------------------------- The process by which two or more corporations combine in such a way that none of the original corporations continue to exist and a new corporation is formed from the combination is called a: ------------------------------- The first step in terminating a corporation is: ------------------------------- The "poison pill" takeover defense, prevents a hostile takeover by: ------------------------------- Company XYZ has 50,000 shares of outstanding stock and 50,0000 shares in reserve. The share price of the stock has been steady at $2.00 per share, but upon the threat of a hostile takeover Company XYZ offers to buy back all outstanding shares at $4.00 per share. This is known as: ------------------------------- A hostile takeover defense known as asset lockup or crown jewel, occurs when: ------------------------------- The power to merge or consolidate companies is controlled by: ------------------------------- What is a tender offer? ------------------------------- Three motivations behind a hostile takeover include: (Select three) ------------------------------- During a hostile takeover attempt the board of directors of the target corporation blocked the attempt, however, shareholders who would have received a premium price for their stock are angry and sue. The courts will use:

merger ----------------------------------------------------- consolidation ----------------------------------------------------- the board of directors adopting a resolution to dissolve the corporation. ----------------------------------------------------- making the takeover prohibitively expensive after the target corporation provides stockholders the right to purchase additional shares at low prices. ----------------------------------------------------- greenmail. ----------------------------------------------------- the target corporation sells off the asset(s) most attractive to the acquiring corporation. ----------------------------------------------------- statutory law. ----------------------------------------------------- An acquiring corporation asks shareholders of the target corporation to offer their stock for sale. ----------------------------------------------------- - acquiring a particular asset of the target corporation. - reducing competition by dismantling the target corporation - increasing profits by having the target corporation buy back its stock at a premium ----------------------------------------------------- the business judgement rule to determine if the directors acted reasonably.

In December 1999, Mover of America, Inc., hired Jasmine Talbot as a bookkeeper. Talbot was responsible for maintaining the company checkbook and reconciling it with the monthly statements from Unitrust Bank. She also handled invoices from vendors. Mover's president, Dev Rishi, reviewed the invoices and signed the checks to pay them, but no other employee checked Talbot's work. By the end of her first full month of employment, Talbot had forged six checks totaling more than $22,000, all payable to Triple M Entertainment, which was not a Mover vendor. By October 2000, Talbot had forged fifty-nine more checks, totaling more than $475,000. A Unitrust employee became suspicious of an item that required sight inspection under the bank's fraud detection standards, which exceeded those of other banks in the area. Talbot was arrested. Mover filed a suit in a Georgia state court against Unitrust. The bank filed a motion for summary judgment. On what basis could the bank avoid liability?

Mover wanted Unitrust to be liable for the forgeries. Unitrust refused, and Mover filed a lawsuit against Unitrust. The general rule is that a bank is liable when the bank pays a forged check. Banks provide their customers with monthly bank statements. The customer has the duty to promptly examine the monthly statements and report any forgeries within 30 days. If the customer fails to report the forgery within the required time, the customer will be liable for the forged checks. If the customer fails to report the forgery within the first thirty calendar days, then the customer is liable for all subsequent forgeries. The bank can be held liable for payment of forged checks, even if the customer fails to notify the bank of the forgery within the required time, if the bank is negligent . The bank has the duty to exercise R̴e̴a̴s̴o̴n̴a̴b̴l̴e (WRONG) Ordinary (WHAT I THINK IS THE CORRECT ANSWER) care in establishing and following policies to minimize the risk of forgeries. In this case, the court would likely find that Unitrust exercised ordinary care and that its policies exceeded the industry standard. Therefore, Unitrust was not liable for the forged checks, and Mover assumed the liability. What If the Facts Were Different? Assume now that Mover has a policy that requires the checks to be locked in the company safe, and two officers must sign on each check. Employees who do not have signature authority do not have access to the checks and only a limited number of signatures are on file with the bank. Talbot is able to steal a book of checks and forges the checks from this book randomly throughout the year. Mover regularly reviews its monthly statements and has no reason to suspect any forgeries. Unitrust notices the irregular check numbers and that they are all made out to the same company, but its policies are not up to industry standards which would have caused the Mover account to be flagged for possible forgery. In this case, the bank did have reason to know that irregular check numbers were all made out to the same company. The bank did not have practices that met industry standards. Unitrust would assume the liability because it did not exercise reasonable care.

A person in her last days with a terminal illness tells her friend that he can have her car when she dies. This type of gift is called a: ------------------------------- The attribute that distinguishes personal property from real property is: ------------------------------- Property that has been voluntarily placed somewhere by the owner and then inadvertently forgotten is: ------------------------------- Which of the following are requirements for a valid gift? Choose 3 answers. ------------------------------- Title to personal property may be transferred through: ------------------------------- When a person rightfully possesses personal property that belongs to someone else without the owner giving up title, it is called: ------------------------------- Which statement is true about bailments? ------------------------------- The rights of a bailor include: ------------------------------- The duties of a bailee include: ------------------------------- In which of the following scenarios can real property be converted into personal property? (Choose two)

gift causa mortis. ----------------------------------------------------- ability to be moved. ----------------------------------------------------- mislaid ----------------------------------------------------- - The gift must be delivered. - The donee (one receiving the gift) must accept the gift. - The giver must intend to make a gift. ----------------------------------------------------- sale, gift, possession, or production. ----------------------------------------------------- bailment. ----------------------------------------------------- The bailee must assume physical control of the property in order to create a bailment. ----------------------------------------------------- return of the property in good condition. ----------------------------------------------------- return of property on time and in good condition. ----------------------------------------------------- - Oil is extracted from a well. - Crops are harvested.

While at dinner, Alex mistakenly leaves behind her credit card after paying the bill. What duties and rights does the person who finds her card have? ------------------------------- Which of the following are fixtures in the jewelry store? ------------------------------- The cuff links Jordan purchased from the jewelry store are intended to be an anniversary gift to Alex. While at dinner, Alex says, "I bought you a gift. I had it delivered to the room for you!" If Jordan and Alex later have a fight at dinner and Jordan wants to return the cuff links, may the cuff links be returned? ------------------------------- Alex and Jordan discover, after their luggage has been delivered to their room, that the luggage has been damaged. Can the hotel be held liable? ------------------------------- When Alex and Jordan are on their way to dinner, they notice a rare (and expensive) painting leaning up against a dumpster. May they take it?

- The duty of ordinary care. (WRONG) - The duty of extraordinary care. (WHAT I THINK IS CORRECT) ----------------------------------------------------- - Any non-moveable and moveable display cases, the vault, all lighting integrated into the ceiling. (WRONG) - The new electrical wiring, the vault, any non-moveable display case. (WHAT I THINK IS CORRECT) ----------------------------------------------------- Yes, because the cuff links have not yet been gifted. ----------------------------------------------------- - Yes, the hotel will be liable for any damage, even if it was minimal. (WRONG) - No, because the hotel did not owe any duty of care. (WHAT I THINK IS CORRECT) ----------------------------------------------------- - Yes, if it has been discarded.

During self-help, a secured party may take the secured collateral from a debtor: ------------------------------- Once a secured party has possession of collateral, what may they do? Choose 3 answer choices.

as long as they do not breach the peace. ----------------------------------------------------- - Retain the goods if less than 60% of the debt is paid. - Sell the goods in a private sale. - Sell the goods in a public sale.

Signing an 18-month lease on a two-bedroom townhouse with a monthly rent of $900 creates a: ------------------------------- When a tenant is allowed to remain in possession of the residence after the expiration of a fixed-term tenancy by continuing to pay monthly rent, the tenancy has become a: ------------------------------- A landlord's right in property that he has leased to a tenant is called a: ------------------------------- A landlord's duties include: ------------------------------- A landlord's rights include: ------------------------------- Which of the following is an example of a fixture? ------------------------------- Which of the following are common law requirements for transfer of title by adverse possession? Choose 3 answers. ------------------------------- The process of examining public records to determine if there are any claims on a piece of real property before its ownership is transferred is equivalent to an examination for: ------------------------------- Which is the correct definition of "marketable title"? ------------------------------- Methods for transferring title to real estate include:

fixed-term tenancy. ----------------------------------------------------- periodic tenancy. ----------------------------------------------------- reversionary interest. ----------------------------------------------------- giving the tenant possession of the leased property. ----------------------------------------------------- receiving rent according to the lease. ----------------------------------------------------- cabinets attached to the wall of a garage ----------------------------------------------------- - Possession must be hostile, against the true owner's wishes. - Possession must be open, visible, and not secret. - Possession must be actual and exclusive. ----------------------------------------------------- defects of title ----------------------------------------------------- The grantor (seller) of the property has ownership of the property free from undisclosed encumbrances and free from defects. ----------------------------------------------------- by sale, by gift, through a will, through adverse possession, and through eminent domain.

Fred is the chief financial officer for Tellcom Industries. Tellcom is preparing a registration statement to be used in conjunction with a new stock offering. To make the offering attractive to investors, Fred provides inflated financial information about the company in the registration statement. Samantha purchases the stock, and, when she finds out about the fraudulent information, she sues. To successfully sue Tellcom and Fred, Samantha must prove: ------------------------------- First Federal Savings and Loan sells short-term notes to its customers, the federal government issues a new series of savings bonds, Fennington Corp. issues new stock in its company, and Liberty Insurance Company sells annuity contracts. Which of these offerings must be registered with the Securities and Exchange Commission (SEC)? ------------------------------- Isadora is the chairman of the board of directors of New Hampshire Sales Cooperative (NHS), a corporation with its principal place of business in Concord, New Hampshire. All NHS shareholders are residents of New Hampshire. NHS needs to raise funds to expand its warehouses, so it offers a new stock offering. The offering is only available to New Hampshire residents. Is NHS required to register its new stock offering with the Securities and Exchange Commission (SEC)? ------------------------------- Penelope wants to open a chain of Yoga studios but does not have the funds to do so. Penelope has not had any luck attracting large investors, so her friend suggests she try crowdfunding. Crowdfunding is a cooperative activity in which people network and pool funds and other resources via the Internet to assist a cause or invest in a venture. Penelope may raise money for her Yoga studios venture by crowdfunding as long as: ------------------------------- Ariana owns fifty shares of stock in Ban Ray Enterprises. Ariana bought the stock when it was first issued, and the offering was required to be registered with the Securities and Exchange Commission (SEC) because the securities were traded on the New York Stock Exchange. Ariana offers to sell her fifty shares to Edwardo. Does the sale between Ariana and Edwardo have to be registered with the SEC?

only that there was a material misstatement or omission and that she lost money. ----------------------------------------------------- Only the stock offered by Fennington Corp must be registered with the SEC. ----------------------------------------------------- No, registration is not required because it is an intrastate offering. ----------------------------------------------------- sales of securities are no more than $1 million in any 12-month period. ----------------------------------------------------- No, the average investor who resells shares of stock does not have to file a registration statement with the SEC.

Which of the following statements explains the formation and purpose of a federal administrative agency? Choose 2 answers. ------------------------------- Which of the following are sources of administrative law? Choose 3 answers. ------------------------------- The judicial branch may limit an administrative agency's actions by which of the following? Choose 2 answers. ------------------------------- The legislation that requires an administrative agency to respond to requests from citizens for agency records is called the: ------------------------------- Which of the following statements correctly reflects the role of a federal administrative law judge (ALJ)? ------------------------------- The Administrative Procedure Act (APA) is the federal law that does which of the following? ------------------------------- When an agency needs to enforce the law or its regulations, it may exercise which of the following powers? Choose 3 answers. ------------------------------- What is the exhaustion doctrine? ------------------------------- What is the term for a court's determination that an administrative agency decision is the result of plain error or mistake? ------------------------------- What is the term given to an administrative decision that is unreasonable or implausible in light of the facts and evidence?

- Most federal administrative agencies are subject to the authority of the president, but some are independent. - An administrative agency is formed by enabling legislation that also provides the authority to establish regulations that will implement and enforce the law. ----------------------------------------------------- - agency regulations - agency opinions - executive orders ----------------------------------------------------- - judicial review of the agency's regulations - judicial review of the agency's orders on appeal ----------------------------------------------------- Freedom of Information Act (FOIA). ----------------------------------------------------- An ALJ presides over an administrative hearing and issues an order that, when final, may be reviewed by a court. ----------------------------------------------------- The APA sets out the rule-making process for administrative agencies. ----------------------------------------------------- - investigate complaints and possible violations of its regulations or the law - conduct a hearing to obtain a final order - issue a subpoena ----------------------------------------------------- A person may seek judicial review of an agency decision only after they have followed all agency procedures to obtain a remedy for their complaint and have obtained a final order from the agency. ----------------------------------------------------- abuse of discretion ----------------------------------------------------- arbitrary and capricious

The following are true for Chapter 7 Bankruptcies: (Choose 2 answer choices) ------------------------------- A business filing for a Chapter 11 Bankruptcy must:

- They are for individuals. The debtor must pass the means test. ----------------------------------------------------- submit a payment plan for approval by creditors and the court.

In which of the following would the business judgment rule not help a manager escape liability? Choose 2 answer choices. ------------------------------- Which of the following is a necessary element of the business judgment rule? Choose 2 answer choices.

- When they committed an illegal act - When they did not act in the best interests of the corporation ----------------------------------------------------- - The person acted with the care of an ordinarily prudent person. - The person acted in good faith.

Which of the following is included in the definition of a security under the Securities Act of 1933? Choose 3 answers. ------------------------------- The Securities and Exchange Commission (SEC) was established to perform which of the following functions? Choose 3 answers. ------------------------------- A corporate officer who buys or sells his or her company's stock based on non-public information may be committing which type of securities fraud? ------------------------------- The Sarbanes-Oxley Act impacted corporate governance in which of the following ways? Choose 3 answers. ------------------------------- The Securities Exchange Act of 1934 controls the public trading of stocks in which of the following ways? Choose 2 answers. ------------------------------- Blue sky laws apply to what type of securities transaction? ------------------------------- Which of the following securities are exempt from registration under the Securities Act of 1933? Choose 3 answers. ------------------------------- A debt issued by a company as a negotiable instrument with a term of 9 months or less is a security that is exempt from registration and is called: ------------------------------- In addition to describing the securities being offered for sale, a registration statement must meet which of the following requirements? Choose 3 answers. ------------------------------- Which of the following are among the five periods identified by the Securities and Exchange Commission (SEC) rules in the registration process? Choose 2 answers.

- stock options, puts, and calls - publicly traded stocks and bonds - an investment contract that meets the Howey test ----------------------------------------------------- - protecting investors from fraud and misrepresentation in securities transactions - enforcing securities laws - regulating the securities market ----------------------------------------------------- insider trading ----------------------------------------------------- - mandated internal controls for financial reporting - enhanced penalties for securities fraud - increased corporate officer accountability ----------------------------------------------------- - by requiring annual disclosures of financial information - by creating the Securities and Exchange Commission (SEC) ----------------------------------------------------- state-regulated securities offerings ----------------------------------------------------- - tax-exempt bonds issued by a charitable organization - a corporate promissory note with a term of 9 months or less - federal government bonds ----------------------------------------------------- short-term commercial paper. ----------------------------------------------------- - It must contain specific information about the company's management, assets, liabilities, and risk factors. - It must state how the corporation intends to use the proceeds from the sale of its securities. - It must be filed with the Security and Exchange Commission (SEC) online. ----------------------------------------------------- - a waiting period - a pre-filing period

Who may enforce a negotiable instrument? Choose 2 answers. ------------------------------- Which of the following is true about signature liability? ------------------------------- What does it mean to have primary liability on a negotiable instrument? ------------------------------- For a party to be subject to contractual liability on a negotiable instrument, what must occur? ------------------------------- What happens when a negotiable instrument has either been canceled by the holder or the holder is paid in full? ------------------------------- Personal defenses to liability for payment on a negotiable instrument are: ------------------------------- Which of the following are correct statements about the writing requirement of a negotiable instrument? Choose 2 answers. ------------------------------- Which of the following meets the signature requirement on a negotiable instrument? ------------------------------- Which of the following will meet the requirement for a negotiable instrument to contain an unconditional promise or order to pay? ------------------------------- Which of the following elements of a negotiable instrument are required to be definite? Choose 2 answers.

- the holder of the instrument. - a person not in possession, but who is entitled to enforce a lost, stolen, or destroyed instrument. ----------------------------------------------------- Any party (except a qualified indorser) who signs the instrument has either primary or secondary liability for payment on the instrument. ----------------------------------------------------- As soon as a party signs the instrument as a maker or accepts the instrument as a drawee, they are the first to become liable for payment. ----------------------------------------------------- The party must sign the instrument. ----------------------------------------------------- discharge of liability for all parties ----------------------------------------------------- effective against a holder, unless they are a holder in due course. ----------------------------------------------------- - may be a typed, printed, or handwritten document - may be any intentional reduction to a tangible form ----------------------------------------------------- a symbol or mark used by the maker or drawer with the intent to authenticate the instrument ----------------------------------------------------- The instrument may not contain any condition to payment and may not refer to another writing that governs the payment. ----------------------------------------------------- - the promise or order to pay - the amount

You plan to open a tattoo parlor, and you are trying to decide the best form of business entity to use. You decide on a sole proprietorship (a solely-owned business), because you want all the profits from the business and you don't want anyone telling you how to run your business. Do you think there might be any disadvantages to creating your tattoo parlor as a sole proprietorship?

Yes. As a sole proprietor, you can be held personally liable for all the business's debts, and your options for raising capital will be limited.

The Labor Management Reporting and Disclosure Act of 1959 (LMRDA) is an Act that regulates the internal affairs and relationships of labor unions. The LMRDA requires in part that unions file financial reports annually with the Department of Labor (DOL). Since 1959, the LMRDA was consistently interpreted by the DOL to exclude all public sector unions from its coverage. In 2003, the DOL reinterpreted the LMRDA to include certain public sector associations subordinate to a national or international union that included a private-sector local union. The DOL reasoned in part that "labor unions have changed tremendously" since 1959 and modern unions are more like complex corporations and LMRDA coverage would be beneficial for union members. As a result, state and local teacher's associations subordinate to a private national union, such as the American Federation of Teachers, were now subject to the LMRDA's reporting and disclosure requirements. The teacher's associations sued, claiming that the DOL's changed interpretation was an impermissible act by the administrative agency. The court stated that, although the DOL's reading of the statute was one of two possible interpretations, the teacher's associations "well may have the better reading of the statute." In spite of this, the court deferred to agency interpretation and ruled in favor of the DOL. Did the court give appropriate deference to the DOL's decision?

As an independent regulatory administrative agency, the DOL exercises powers associated with the three branches of government: the legislative branch through rulemaking; the executive branch through enforcement; and the judicial branch through adjudication. When asked to review agency decisions, courts historically granted deference to the agency's judgment. Following Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., deference to administrative agency by a court does extend to an agency's interpretation of its own legal authority. The standard involves the following two questions: First, did Congress directly address the issue in dispute in the statute? If so, the statutory language prevails. Second, if the statute is silent or ambiguous, is the agency's interpretation reasonable? If it is, a court should uphold the agency's interpretation even if the court would have interpreted the law differently. In this case, the LMRDA did directly address the issue challenged by the teacher's associations in the statute. The court found that multiple interpretations did exist to the statute. The court also found that the DOL's interpretation of the statute was reasonable. When a court perceives a statute to be open to multiple interpretations and the agency's interpretation was reasonable, a reviewing court will defer in favor of the agency. The court's belief that the teacher's associations "well may have the better reading of the statute" does not necessarily change the decision because a court must follow the agency's interpretation as long as it is a reasonable interpretation. As a result, the court did act appropriately when it deferred to the DOL's interpretation of the LMRDA. What If the Facts Were Different? In this case, multiple interpretations did not exist to the statute. The agency did not give an explanation for the new interpretation. Therefore, a court would not defer to the agency's interpretation of its own legal authority.

Several months after the promulgation of the new rules in North Montana, the State Board of Cosmetology begins to crack down on unlicensed hair braiders in the state. The Board begins issuing fines to those who have continued to braid hair without meeting all the requirements of the regulation, along with an injunction prohibiting them from continuing to operate until all requirements have been met. How can a hair braider, subject to a fine and injunction, obtain due process? ------------------------------- Although Stephanie has not yet been investigated or fined by the State Board of Cosmetology for operating a hair braiding business without a license, Stephanie decided to sue the Board for a violation of her constitutional rights in a court of law. Does Stephanie have standing to bring this claim? ------------------------------- A group of hair braiders have substantially complied with the regulations. They have each taken the requisite 500-hours of education and have registered with the State, including paying their licensing fee. However, during an inspection by the Board, it was determined that the group failed to properly display their signs stating that they were not licensed cosmetologists. The Board then decided to revoke their registrations and the hair braiders claimed that they were targeted unfairly while other hair braiders who failed to display their signs were simply given a warning. What standard will govern whether the decision of the agency to revoke their registration will be upheld? ------------------------------- Many hair braiders in the fictional State of North Montana operate in their own homes, as opposed to in a salon. May the State Board of Cosmetology conduct investigations into the practices of these hair braiders, including gaining forced entry into their homes and inspecting those homes for health and safety violations? ------------------------------- The State Board of Cosmetology, in implementing their new rules, failed to establish rules related to hearing notices, settlements, agreements, and conferences, as well as to how evidence could be presented at any hearing. Rather than spending time with a public comment period, the Board simply adopted a set of rules regarding each of these topics and published the rules on their website. May the Board still enforce these rules?

By seeking a hearing with the State Board of Cosmetology challenging the fine and injunction, and if unsuccessful, bringing a claim for judicial review of the decision of the agency decision in court. ----------------------------------------------------- No, unless she has suffered a harm by the regulation. ----------------------------------------------------- Whether the agency followed the Chevron standard. ----------------------------------------------------- No, unless there is an emergency situation, or they have a warrant. ----------------------------------------------------- Yes, because they are procedural rules, they are exempt from the formal notice and comment requirements.

After an extended hospital stay, Jayla is drowning in debt. Jayla decides to file for bankruptcy, because she sees no other way out. Jayla owes $50,000 to Mercy Hospital, $3,000 to Car Mart for her automobile, and $8,000 to VISA. She is behind on payments to every single one of them! When Jayla's bankruptcy is concluded: ------------------------------- Barron files a bankruptcy proceeding under Chapter 7 of the Bankruptcy Code. All of the property Barron owns at the time of the filing goes into the bankruptcy estate. Four months later, Barron's grandfather dies and Barron inherits $100,000. The money that Barron inherits from his grandfather: ------------------------------- Sylvia is really struggling with her finances. She is getting further and further behind on payments to all her creditors. Sylvia is determined, however, that she will not file bankruptcy. Some of Sylvia's creditors get together to discuss what they can do to force Sylvia to file bankruptcy so they can at least recover some of the funds owed to them. Sylvia owes money to eight different creditors. Sylvia's creditors can force her into an involuntary bankruptcy: ------------------------------- Angela is very far behind on her credit card payments! The interest keeps piling on month after month because Angela can only make the minimum payments. The balances on the cards are actually increasing each month instead of decreasing. Angela has a decent job but just doesn't make the kind of money needed to pay down her debt. Because Angela has a job and, therefore, a steady income, Angela's creditors want to force her to file a Chapter 13, so the trustee can make sure the creditors receive payment for at least part of the amount Angela owes them. If Angela's creditors attempt to file a Chapter 13 bankruptcy: ------------------------------- Ralph and Lulu are tired of struggling with their finances, so they decide to file for bankruptcy. Ralph and Lulu know once they file for bankruptcy, they will have trouble getting credit extended to them. Plus, they are tired of just scraping by and doing without. So, in the three weeks before the bankruptcy petition is filed, Ralph and Lulu go on a real spending spree. Ralph and Lulu max out their Mastercard by buying items for their house, going on trips, and eating at expensive restaurants. Because, after all, they won't have to pay it back! If Mastercard objects to the discharge of the recent credit card debt in the bankruptcy:

Car Mart will be paid first because it is a secured creditor. ----------------------------------------------------- is after-acquired property that would become part of the bankruptcy estate. ----------------------------------------------------- if one or more creditors having a claim of $15,775 or more files the involuntary bankruptcy petition. ----------------------------------------------------- they will not be successful, because only the debtor can file a Chapter 13. ----------------------------------------------------- the debt will probably not be discharged in the bankruptcy, and Ralph and Lulu will have to pay.

Which of the following consumer credit acts examines lenders' practices regarding race, religion, national origin, color, gender, marital status, or age? ------------------------------- Which of the following consumer credit acts helps potential borrowers understand the cost of a loan? ------------------------------- When a product is advertised for sale at a greatly reduced price, but the salesperson tries to get customers to buy a more expensive item instead, this is called: ------------------------------- Which of the following actions can the Federal Trade Commission (FTC) employ against unfair and deceptive advertising? Choose 2 answers. ------------------------------- A consumer product is any article, or its component parts, produced or distributed for sale to a consumer: ------------------------------- Environmental regulations may cause increased business costs through which of the following? Choose 3 answers. ------------------------------- The Clean Air Act (CAA) regulates air pollution in which of the following ways? Choose 3 answers. ------------------------------- The first federal legislation to specifically govern hazardous waste was enacted in 1976 and was called the: ------------------------------- A business will violate the Clean Water Act if it does which of the following? Choose 2 answers. ------------------------------- What legislation was enacted specifically to govern the use and production of chemicals known to be harmful to health and the environment?

Equal Credit Opportunity Act (ECOA) ----------------------------------------------------- Truth-in-Lending Act (TILA) ----------------------------------------------------- bait and switch. ----------------------------------------------------- cease and desist order counteradvertising sanction ----------------------------------------------------- for the consumer's own use or enjoyment. ----------------------------------------------------- - toxic cleanup requirements - manufacturing restrictions - environmental standards ----------------------------------------------------- - The CAA requires states to develop state implementation plans for meeting air pollution standards. - The CAA directs the Environmental Protection Agency to set air pollution standards. - The CAA allows citizens to sue companies that pollute and sue the Environmental Protection Agency for failure to enforce the law and regulations. ----------------------------------------------------- Resource Conservation and Recovery Act (RCRA). ----------------------------------------------------- - discharges pollutants into surface waters without a permit - uses equipment that does not meet the standards for "best available control technology" ----------------------------------------------------- the Toxic Substances Control Act (TSCA)

Lee Park was an executive for a large corporation. His base salary, which was calculated on a formula tied to the company income, averaged $338,500 over a five-year period. Because of a recent divorce (within the last year), Lee owed his ex-wife $4,350 per month in spousal support. Lee owed back taxes to the IRS of $210,000, which required him to pay $2,800 per month in addition to current tax payments. Lee owed $150,000 in student loan debt. As a result of his divorce, Lee became the sole owner of his home, which was worth $900,000 and had a $600,000 mortgage on it with Bank of the US.

In this case, Lee Park (the debtor) filed a Chapter 7 bankruptcy. Under this type of bankruptcy, the debtor is required to file a list of secured and unsecured creditors as well as several other lists, known as schedules. Lee's payments to his wife generally would not be dischargeable in bankruptcy. Student loans generally are not dischargeable in bankruptcy. Under the federal exemptions, Lee normally would be allowed some portion of equity in his home. Because Lee did become the sole owner of the house (with responsibility for the mortgage) within the last three years, Lee did have a federal maximum equity exemption. According to the federal limit in the book, Lee should not be able to claim a homestead exemption for the full amount of the equity in his home. If the median income in Lee's state for a single person was $47,000, there would be a presumption of bankruptcy abuse by Lee. If Lee had to complete the means test, the Court would deduct f̶o̶r̶m̶u̶l̶a̶-̶b̶a̶s̶e̶d̶ living expenses from his monthly disposable income to decide whether Lee could pay any of his unsecured debt. In this situation, given Lee's income, it is likely that he would have his case dismissed or converted to a Chapter 13. What If the Facts Were Different? Assume that Lee Park was not an executive but instead was a line worker making $41,000 per year. His spousal support was $1,000 per month and his home was worth $365,000 with a $290,000 mortgage. He did not have student loans and did not owe any back taxes. The state median income was still $47,000. In this case, Lee's income was not higher than the state median. Because of this, there would not be a presumption of bankruptcy abuse. Assessment question Lee's equity in his house would be $75,000 . This amount of equity is lower than the federal limit. Lee would receive the entire amount of equity in his home.

Dwayne Short, Serkan Gonzaga, and Danny Baker formed a general partnership named "Relo Now," which was a trucking business in Texas. The partners agreed to share equally one-third of the profits and losses of the partnership. Short was the only partner working in the office. In order to conduct partnership business, Short entered into an office equipment lease agreement with IKON Capital Corporation (IKON) for a telephone system, fax machine and photocopier for $577.91 a month. Soon thereafter, the company for which the partnership was acting as a representative had changed its system, thereby preventing the partnership from being capable of operating its business. Short was unable to pay IKON the lease payment, among other debts. IKON sued Short individually and d/b/a Relo Now (d/b/a is an abbreviation for "doing business as"), claiming a total exceeding $16,000 which included past due payments and accelerated future lease payments. Short negotiated a settlement with IKON for $9,000. Short notified Gonzaga and Baker of the settlement agreement and said they were jointly and severally liable for the $9,000 that extinguished the partnership's debt to IKON, plus attorney's fees. Baker filed bankruptcy, and his debts were discharged in bankruptcy court. Gonzaga, however, refused to pay the debt. Gonzaga claimed he was not legally responsible to reimburse Short for satisfying the debt due to IKON.

Partnerships are a voluntary association of individuals and are formed by agreement of the partners. When Short signed the lease agreement with IKON for office equipment, Short, Gonzaga, and Baker were still a partnership. When a partnership becomes impractical to operate, because it can only be operated at a loss, dissolution of the partnership may be appropriate. Winding up is the process of collecting, liquidating, and distributing the partnership assets. The obligations of winding up includes discharging liabilities (paying debts) and accounting to each partner for the value of his or her interest in the partnership. Generally, partners are jointly and severally liable for all partnership obligations. All partners in a partnership can be held liable even if a particular partner did not participate in, know about, or ratify the conduct that gave rise to a lawsuit against the partnership. A judgment against one partner severally does not extinguish the others' liability. Therefore, Short can recover the amount equal to Gonzaga's share of the debt to IKON. In addition to debts and obligations, a partner may receive reimbursement for expenses incurred in the process of winding up a partnership. Settling debts is a part of winding up a partnership. Short will be able to recover Gonzaga's share of the attorney's fees related to settling the IKON debt. Assessment question What If the Facts Were Different? Assume that Dwayne Short used partnership assets to lease IKON office equipment for his own personal trucking business and not for the general partnership named "Relo Now." While the "Relo Now" partnership was winding up, Short sought partial reimbursement from Serkan Gonzaga for the lease. The lease was not signed in furtherance of the "Relo Now" partnership. Short will be liable personally for the lease. As a result, Short will not be able to recover costs from Gonzaga.

Jan Hunt was a football coach at the University of Oklahoma. Hunt attended an invitational secondary school track meet that his son was participating in. Sometime in the afternoon, Hunt laid down on a row of bleachers to sunbathe while waiting for his son's next event. Nearby, Geoff Proctor, a member of the board of directors of Eagle Resources Company (Eagle), told his spouse that he wanted to dispose of or liquidate Eagle, that several companies were bidding on Eagle, and that an announcement of a "possible" liquidation of Eagle might occur the following week. Proctor told this to his spouse in the context of his anticipated business schedule the following week in order to make necessary childcare arrangements. Unbeknownst to Proctor, Hunt overheard the conversation about Eagle. After the track meet, Hunt purchased Eagle stock based on the overheard information. The Securities and Exchange Commission (SEC) learned of the trades and filed an action against Hunt claiming that he committed insider trading.

Proctor would be treated as an Insider in regard to Eagle and possessed a fiduciary duty to the company. An individual who receives tips from an insider is known as a tippee and is liable for insider trading if the following requirements are met: 1) There is a breach of a duty not to disclose, 2) The disclosure is made in exchange for personal benefit, and 3) The tippee knows or should know of this breach and benefits from it. When Proctor told his wife about Eagle in the context of arranging childcare, Proctor did not breach his fiduciary duty to the company not to disclose inside information. Proctor's inadvertent disclosure to Hunt did not occur in exchange for personal benefit. Hunt, the tippee, did not know or should have known there had been a breach by the insider when Hunt overheard the conversation. Given the facts above, Hunt is likely not guilty of insider trading. What If the Facts Were Different? Assume that Proctor and Hunt were close friends, and Proctor told Hunt about the pending liquidation of Eagle in exchange for 50% of the profits that Hunt made from the trade. In this case, Proctor is likely be found guilty of insider trading because Proctor did breach a duty not to disclose inside information. The disclosure was made for Proctor's personal benefit. Hunt is likely to be found guilty of insider trading. A court would likely find that Hunt knew or should have known about the breach of duty by Proctor and also received personal gain.

Anytown Sailing sells life jackets to retail stores. Anytown buys eight other life jacket manufacturing companies and now has ninety percent of the market. Small Pop Sails, a much smaller distributor, is now at a definite disadvantage in competing against Anytown. Anytown controls the market! Small Pop Sails complains to the government that Anytown has created an illegal monopoly. Who can sue Anytown Sailing for a violation of antitrust laws? ------------------------------- Penguin Airlines coordinates with other airlines to set standard prices for air travel and to coordinate their markets. Has Penguin Airlines and the other airlines violated the Sherman Act? ------------------------------- The Federal Trade Commission (FTC) files suit against Yange Corp. under § 2 of the Sherman Act. To be successful, the FTC must prove that Yange Corp. possesses monopoly power in the relevant market and that the monopoly power was obtained by illegal means. The FTC has no direct evidence that Yange is using its power to control prices and restrict output. The FTC, therefore, must show that Yange Corp. has monopoly power indirectly, by showing that Yange Corp. has a dominant share of the relevant market and that there are significant barriers for new competitors entering that market. The FTC can calculate the market share that Yange Corp. has by: ------------------------------- Makenna and Hudson each own major grocery store chains that operate throughout the United States. Makenna and Hudson meet to discuss best practices in their grocery stores. Together, they decide to set minimum prices on certain products to prevent a bidding war between them. Have Makenna and Hudson violated any laws? ------------------------------- Francisco owns a business that sells doughnuts to grocery stores. He has worked hard to develop his business in the best possible way. Francisco only uses the best ingredients, he has created a cost-effective marketing strategy, and he sells his product at a reasonable price. As a result, Francisco's business has eighty percent of the market share. Is Francisco's maintenance of eighty percent of the market a violation of the Sherman Act?

The Department of Justice (DOJ) can bring criminal proceedings, the Federal Trade Commission (FTC) can bring civil proceedings, and Small Pop Sails can bring a civil action and possibly receive treble damages. ----------------------------------------------------- No, they have not because the Federal Aviation Administration (FAA) has primary regulatory authority over airlines. ----------------------------------------------------- taking the company's sales over the applicable period and dividing it by the total sales of the industry over the same period. ----------------------------------------------------- Yes, Makenna and Hudson have violated Section 1 of the Sherman Act. ----------------------------------------------------- No, it is not because Francisco used legal means to obtain a monopoly.

Mid-Pacific Tennis Courts (MPTC), a small family-held corporation, hired Leroy Jacob as a salesperson. Jacob devised a scheme to defraud MPTC. Using MPTC customer leads, Jacob entered into contracts with potential customers to build tennis courts without informing MPTC. Jacob accepted checks from potential customers made payable to MPTC. Jacob then deposited those checks in his personal bank account with Peoples Bank & Trust Co. (Peoples Bank) without indorsement or permission by MPTC. Jacob took the money and disappeared. When MPTC learned of the fraud and discovered that the checks were accepted for deposit by Peoples Bank in Jacob's personal account, MPTC sued Peoples Bank to recover the amount of the checks in question. Did Peoples Bank properly accept the checks for deposit?

The Uniform commercial Code (UCC) has the following requirements for instrument to be negotiable: the instrument must be in writing, the instrument must be payable to order of or to the bearer, the instrument must include an unconditional promise, the instrument must state a fixed amount of money, the instrument must be payable on demand, and the instrument must be signed by the maker or the drawer. A transfer of an order instrument requires the indorsement of the payee. An indorsement is a signature on an instrument, which is typically placed on the back of a check. Assessment question Generally, the purpose of an indorsement on an instrument is to transfer ownership rights of the instrument. The checks deposited by Jacob were not indorsed by MPTC. Therefore, Peoples Bank improperly accepted the checks for deposit. Assessment question Assume that Jacob convinced the potential customers to write checks out to him personally, rather than MPTC. Jacob then signed the checks and deposited them with Peoples Bank. Peoples Bank had no notice of the fraud. In this case, the potential customer is the drawer, and Jacob is the payee. MPTC's name does not appear on the check. The checks are negotiable. Therefore, Peoples Bank properly accepted the checks for deposit.

Brett and Elena Zalman (Zalmans) entered into a franchise agreement with Dairy Market, Inc. (Dairy Market). The agreement described the responsibilities of both Dairy Market and the Zalmans to the franchise. The agreement also contained a franchise termination provision. The termination provision allowed either party, after twelve months, to terminate the agreement without cause on ninety days written notice. The Zalmans understood the contract terms and declined the opportunity to have a lawyer review it before signing. A few years later, Dairy Market presented a new contract to the Zalmans for execution. Some of the terms were less favorable to the Zalmans when compared with the earlier agreement. The Zalmans declined to sign the new agreement. Dairy Market then gave written notice to the Zalmans that their contract would be terminated in ninety days pursuant to the agreement both parties signed. The Zalmans sued Dairy Mary to prevent termination of the franchise agreement, alleging that Dairy Market acted in bad faith and the termination contract provision should not be enforced.

The franchise relationship is defined by the contract between the franchisor and the franchisee. To prevent arbitrary or bad faith terminations, a state law may prohibit termination without good cause or require that certain procedures be followed in terminating a franchise. Generally, statutes and the case law governing franchising tend to emphasize the importance of good faith and fair dealing in franchise relationships. This requires that the parties act reasonably and in good faith in fulfilling their contractual duties. If either party fails to perform its contractual duties according to the franchise contract, that party may be subject to a lawsuit for breach of contract. The termination provision in the contract allowed both parties, after twelve months, to terminate the agreement without cause on ninety days' written notice. When the Dairy Market asked the Zalmans to sign a new contract, the Zalmans refused to sign. As a result, Dairy Market exercised the termination provision in the original franchise contract. There was no potential for unfair surprise to the Zalmans. They did have a reasonable opportunity to review and understand the contact before signing it, understand the contract terms, and had an opportunity to have the contract reviewed by a lawyer. Dairy Market did act in good faith and there was no evidence that they failed to observe reasonable commercial standards of fair dealing. Therefore, Dairy Market lawfully terminated the agreement. What If the Facts Were Different? Assume that six months after the franchise agreement was signed, Dairy Market deliberately sabotaged the franchise relationship in order to get out of the contract with the Zalmans. In this case, there was potential for unfair surprise to the Zalmans. Diary Market did not act reasonably in their relationship with the Zalmans. Dairy Market therefore did not act in good faith and failed to observe reasonable commercial standards of fair dealing. A court would likely find that Dairy Market unlawfully terminated the agreement.

Arrowpoint Uranium Company was one of the original uranium mining companies in the Cameron Arizona region of Northern Arizona, operating from 1952 to the mid-1960s at several different mine sites on the Navajo Reservation. The land where the mine sites were located was owned by the United States in trust for the Navajo Nation. The Department of the Interior and the Bureau of Indian Affairs oversaw some aspects of the mining permits and leases for the Nation. Permits were approved by the director of the BIA (an employee of the United States government). All money related to the mining was paid to the United States Treasury for deposit exclusively in Navajo tribal funds. For more than a decade, the mine sites remained largely in the same condition as when mining ceased, with open pits and waste piles on the properties. In 1975, Arrowpoint was closed and its assets were bought by Lightning Mines. In the 1980s, the Navajo Nation became concerned about possible health impacts of abandoned uranium mines on the Reservation. People were frequenting the pits for recreational purposes, and livestock was watering at the pits. The Navajo Nation leadership discussed their concerns with the Environmental Protection Agency (EPA). As a result, the EPA cleaned up the mine sites.

The law that covers allocation of the costs of cleaning up toxic waste is CERCLA also known as the Superfund. Under that law, several parties are responsible for the cost of cleaning up the waste. Responsibility for cleaning up a toxic waste site falls on the person who generated the waste, any party who transported the waste to the site, the party who owned the site, the party who operated the site, or the current owner of the site. If the potentially responsible parties do not clean up a hazardous site, the EPA can clean it up and recover costs from the potentially responsible parties. Liability for cleanup extends to a business that buys a potentially responsible party. Any potentially responsible party is responsible for the entire cost of cleanup under the doctrine of joint and several liability. If a potentially responsible party pays for the entire cost of cleanup, that party can bring a contribution action for a percentage of the costs. In this situation the cost of cleanup must be paid by the United States and Lightning Mines. What If the Facts Were Different? Assume that the United States transferred title of the land to the Navajo Nation. Under these facts, the United States is the the entity that owned the site when the waste was generated, and the Navajo Nation is the current owner of the site. Under these facts, the potentially responsible parties are the United States and the Navajo Nation. Because of this, the Navajo Nation and the United States are responsible for the costs.

Between two secured parties who have both perfected their secured interest, which one takes priority? ------------------------------- Between a secured party who has attached and a secured party who has perfected, which one takes priority?

The one who perfected first ----------------------------------------------------- The secured party who perfected

Mikhail and Dana Jackson, doing business as M&D Enterprises, Inc., bought a retail electronics store under a franchise agreement from a national company, Tunes Hut. The Jacksons borrowed from State Bank to pay for the business and signed loan documents and a financing statement, which identified the Jacksons as "Debtors." Elsewhere on the financing statement, the bank identified "M&D Enterprises, Inc., Tunes Hut, Dana K. Jackson, Mikhail C. Jackson" as "Debtors." The statement covered, in part, the store inventory. The bank filed the financing statement with the proper government agency. Three years later, the store closed. Tunes Hut terminated the franchise and took possession of the inventory, claiming the Jacksons and M&D owed Tunes Hut $6,394.73. State Bank filed a suit in a state court against Tunes Hut, claiming a perfected security interest in the inventory with priority over Tunes Hut's claim. Did the bank's security interest take priority over Tunes Hut's claim?

To create a security interest in personal property that is not held by the lender, there must be a written security agreement that describes the personal property, also referred to as collateral . The secured party must give the debtor something of value, and the debtor must have rights in the property. When this occurs, the creditor's rights attach , which gives the creditor an enforceable security interest . To perfect a security interest in personal property, the lender may file a p̶e̶r̶f̶e̶c̶t̶i̶o̶n̶ ̶a̶g̶r̶e̶e̶m̶e̶n̶t̶ (WRONG) security Interest (WHAT I THINK IS THE RIGHT ANSWER). The purpose of this document is to give third parties public notice of the security interest. A perfected security interest has a higher priority than an unperfected interest in relation to personal property. State Bank had a perfected security interest in the inventory, whereas Tunes Hut had no security interest in the inventory. Because of this, State Bank's claim did take priority over Tunes Hut's claim. What If the Facts Were Different? M&D Enterprises, Inc., obtained financing from State Bank for the purchase. At the closing for the purchase of the franchise, the Jacksons signed the loan documents on behalf of M&D Enterprises, Inc., which included a security agreement with the store inventory as collateral. They also signed the franchise documents between M&D Enterprises, Inc., and Tunes Hut, which included a security agreement with the store inventory as collateral. The next day, Tunes Hut filed a financing statement. A month later, State Bank filed a financing statement. Upon default, Tunes Hut terminated the franchise and took possession of the inventory. The bank filed a suit in a state court against Tunes Hut, claiming a perfected security interest in the inventory with priority over Tunes Hut's claim. Did the bank have a perfected security interest and, if so, did that interest take priority over Tunes Hut's claim? Given these facts, State Bank does have a perfected security interest. Tunes Hut does have a perfected security interest. Assessment question If two creditors file financing statements perfecting their security interest in the collateral, then the first interest to be perfected has priority. Under these facts, Tunes Hut has priority.

Which is the most common means of perfecting an interest is by filing a finance statement. ------------------------------- A negotiable instrument has to contain a promise or an "order to pay" to be valid? ------------------------------- Bankruptcy is a serious step and how much it can help you depends on your situation of you are thinking about bankruptcy you should: ------------------------------- An instrument is valid and negotiable whether or not the marker or drawer has signed? ------------------------------- The financial and offices typically deal with compliant checks to make sure the business is in compliance. ------------------------------- How much of a surge in digital traffic and electronic transactions have financial services providers experienced during the pandemic? ------------------------------- A finance statement is a document that gets public notice to third parties of the security party's security interests. ------------------------------- What percent of internet banking has gone up? ------------------------------- A negotiable instrument is an unconditional promise to pay. ------------------------------- An investment advisor today typically must discover and combine data from public and private sources, analyze it, and share it as quickly as possible. ------------------------------- A negotiable instrument is only payable in money? ------------------------------- Perfection is the legal process by which secured parties protect themselves against the claims of parties who

True ----------------------------------------------------- True ----------------------------------------------------- Talk to a lawyer as early as possible ----------------------------------------------------- True ----------------------------------------------------- True ----------------------------------------------------- - Online Mobile is almost flat - Contact Center has gone up north of triple digits - Physical next to zero ----------------------------------------------------- True ----------------------------------------------------- 20-30% ----------------------------------------------------- True ----------------------------------------------------- True ----------------------------------------------------- False -----------------------------------------------------

You decide to sell your antique Mercedes, so you post an ad on Facebook Marketplace. Your friends advise you to require payment with a cashier's check only and to not take any personal checks. You get your first potential customer who comes out and looks at the car. She offers you the full price you are asking but wants to pay with a personal check. Why do you think your friends advised you to require payment with a cashier's check instead of a personal check?

With a cashier's check, the bank has already committed itself to pay the amount stated on the cashier's check.

Where should Articles of Incorporation be filed? ------------------------------- At the first meeting of corporate shareholders, what business is normally conducted? Select 2 answers.

With the state ----------------------------------------------------- - The adoption of corporate bylaws - The election of the board of directors

Assume that at the time of installation of the cabinets, DeSantis still had not refunded the second charge of $4,000. If Harry notifies his credit card company, must it credit Harry's account the $4,000 even without DeSantis's initiation of a refund? ------------------------------- Under Federal Trade Commission (FTC) regulations, DeSantis Cabinets was obligated to ship the cabinets to Harry: ------------------------------- What is the FTC's best argument for holding DeSantis Cabinets out of compliance with the Magnuson-Moss Warranty Act? ------------------------------- Assume the following statute exists: "Every manufacturer of a consumer product who obtains information which reasonably supports the conclusion that such a product contains a defect which could create a substantial product hazard or creates an unreasonable risk of serious injury or death shall immediately inform the Product Safety Council of such defect or risk." Which of the following would be DeSantis Cabinets's best argument for not notifying the council that its product posed a hazard? ------------------------------- Not all of DeSantis's customers are able to pay up-front. In those circumstances, it refers the customer to a third-party lender that loans the customers money exclusively to purchase DeSantis cabinets, payable monthly over the course of one year. Does the Truth in Lending Act (TILA) apply to these transactions?

Yes, because Harry notified the company of the error and attempted to resolve the issue. ----------------------------------------------------- - within a "reasonable" time after he ordered them. (WRONG) - within no required time frame because it did not agree to a specified time on its order form. (WHAT I THINK IS CORRECT) ----------------------------------------------------- The warranty fails to meet the specific requirements of the Act, namely, it is vague on the parts covered, the procedure for the replacements of parts, and at what cost to the consumer. ----------------------------------------------------- - The varnish safety data sheet states the product is not flammable when dry, and DeSantis followed all the varnish product recommendations for safe application. (WRONG) - This is the only report of a fire due to varnish that the company has ever received, and no one was injured in the fire. (WHAT I THINK IS CORRECT) ----------------------------------------------------- - Yes, if the loan is secured by the cabinets themselves as collateral. (WRONG) - No, the loan is not made by the right type of lender. (WHAT I THINK IS CORRECT)

You have a brilliant idea for a new company. For children's birthday parties, you plan to provide a traveling children's show, complete with petting zoo and clowns, and take it wherever the party occurs. Two friends agree to help you with your venture, so you decide you probably need to incorporate, just so you look "official." Do you think there might be any drawbacks to incorporating?

Yes, you may have to pay more taxes.

A secured party who has control will prevail over a secured party who has only filed for these types of collateral: ------------------------------- When used as collateral, a laptop computer used by a family for email, games, and schoolwork would be classified as: ------------------------------- A written or authenticated security agreement is a requirement when creating a secured transaction unless: ------------------------------- A purchase money security interest (PMSI) is created when a seller or lender agrees to extend credit to a buyer for all or part of the purchase price of: ------------------------------- The person who must repay the loan in a secured transaction is called the: ------------------------------- The process by which a creditor may take possession of (and usually sell) collateral to satisfy an unpaid debt is called: ------------------------------- What document is filed to give public notice to third parties of a secured party's security interest in collateral? ------------------------------- Under the UCC, every six months, a debtor in a secured transaction has the right to request: ------------------------------- When the debtor has fully paid a debt that was secured by consumer goods and perfected by filing, the creditor must, in a timely manner, file a: ------------------------------- Which of the following actions causes a security agreement to terminate?

deposit accounts, investment property, and letter-of-credit rights. ----------------------------------------------------- consumer goods. ----------------------------------------------------- the secured party has possession or control of the collateral. ----------------------------------------------------- consumer goods. ----------------------------------------------------- obligor ----------------------------------------------------- foreclosure ----------------------------------------------------- a financing statement ----------------------------------------------------- confirmation of the amount of unpaid debt. ----------------------------------------------------- termination statement. ----------------------------------------------------- full repayment of the debt

Aubrey has been accepted into medical school, a most expensive undertaking. Aubrey has student loans and grants that pay part of the expense, but not all; she still needs $5,000. Aubrey asks her family friend, Clara, if Aubrey can borrow $5,000 and offers to pledge her mother's diamond necklace to ensure she repays the loan. Clara agrees and gives Aubrey $5,000. Aubrey insists that Clara take the diamond necklace and keep it until Aubrey repays all of the $5,000. To make sure that Clara's security interest is perfected, Clara needs to: ------------------------------- Wyatt needs $2,000 to go on vacation. After trying unsuccessfully to come up with a plan to obtain the money, Wyatt comes up with the perfect plan: Wyatt offers to have his mother's jewelry collection cleaned for her, but instead, he takes the jewelry to Perfect Pawn Shop and pledges his mother's jewelry collection as collateral for a loan of $2,000. The jewelry is worth $10,000, so Perfect Pawn Shop agrees to the deal, gives Wyatt the $2,000, and keeps the jewelry. Does Perfect Pawn Shop have a security interest in the jewelry? ------------------------------- Adelie is nineteen years old and about to buy her first car from Car Mart, a dealership that finances its own car loans. Adelie has found her perfect car, and at a great price - $7,000. Because Adelie does not have an established credit record, and her income is fairly low, Car Mart tells Adelie that she must have a co-signer to finance the car. Adelie's Aunt Gertrude agrees to co-sign on the car loan. After Adelie has made payments for six months, Adelie renegotiates the terms of the car loan, extending the payments for an additional twenty-four months. Adelie does not notify Aunt Gertrude of this change to the agreement. Six months later, Adelie stops making payments on the loan, leaving a remaining balance of $5,000. If Car Mart seeks payment from Aunt Gertrude without demanding payment from Adelie first: ------------------------------- Myra purchases a refrigerator from Howard Appliances for $800 for use in her home. Myra pays $200 down and signs an installment sales contract with Howard Appliances to finance the $600 balance. The installment sales contract provides that Myra will pay $50 per month until the $600 balance, plus five percent interest, is paid in full. To perfect its security interest in the $600, Howard must: ------------------------------- Saundra purchases an RV for $30,000, on credit, from Outdoor RV Sales, which finances the transaction. Saundra makes payments on the RV for the first eight months, but then Saundra runs into financial difficulty and stops making the payments. Because Saundra stops making the payments on the RV, Outdoor RV Sales:

do nothing, because she has possession of the necklace. ----------------------------------------------------- No, because Wyatt does not own the jewelry. ----------------------------------------------------- Aunt Gertrude will not have to pay because there was a material modification in the loan terms. ----------------------------------------------------- do nothing ----------------------------------------------------- can take peaceful possession of the RV or pursue a judicial remedy.

Xavier and Ciara form a corporation to provide cleaning services to local businesses. After two years of trying to make a go of the business, the profits they had hoped for are just not there. Xavier and Ciara decide to dissolve the corporation and go their separate ways. To terminate the corporate entity, Xavier and Ciara must: ------------------------------- Tasmo Inc. and Velmo Inc. are both corporations that manufacture metal snaps, so they are competitors. Velmo has a huge part of the market share but also has huge outstanding debt. Tasmo is a newcomer to the market with minimal outstanding debt. Tasmo and Velmo decide to merge their companies to improve their market share and financial picture. After the merger is completed, Tasmo is the company that remains. Who will be responsible for Velmo's outstanding debt? ------------------------------- Summation Management Inc. is the parent company of several different hospitality management corporations. Sleep Inn Inc. seeks to become one of Summation's subsidiaries. Summation and Sleep Inn enter an agreement whereby Sleep Inn will provide to Summation all its stock. For each five shares of Sleep Inn stock that Sleep Inn provides to Summation, Summation will provide to Sleep Inn one share of Summation stock. After the agreement, both Sleep Inn and Summation will remain as separate corporations. Sleep Inn and Summation have formed a: ------------------------------- The Rustic Fig, an upscale restaurant, is going out of business. Penelope's Eatery agrees to buy all of Rustic Fig's assets for $100,000. After the transaction is completed, Rustic Fig still has $200,000 in outstanding debt. Who is responsible for Rustic Fig's debt? ------------------------------- After twenty-five years in business, Birdsong Enterprises Inc. has decided to stop manufacturing bird calls. The shareholders unanimously vote to terminate the company and the board of directors begins the winding up process. They notify all Birdsong's existing customers and take all actions necessary to bring the business to an end. As part of the winding up process Birdsong must:

file articles of dissolution with the state, notify the creditors of the corporation of the dissolution, and establish a date (at least 120 days after the date of dissolution) by which all claims against the corporation must be received. ----------------------------------------------------- Tasmo ----------------------------------------------------- share exchange. ----------------------------------------------------- Rustic Fig is responsible because this is a purchase of assets. ----------------------------------------------------- - file articles of dissolution with the state and establish a date (at least 120 days after the date of dissolution) by which all claims against the corporation must be received. (WRONG) - file articles of dissolution with the state, notify its creditors of the dissolution, and establish a date (at least 120 days after the date of dissolution) by which all claims against the corporation must be received. (WHAT I THINK IS CORRECT)

Dion is head of the National Security Agency, a subagency of the Department of Defense. Dion has held the position for years and feels comfortable that he is secure in his position. However, after Dion holds a press conference where he directly contradicts a statement the president made, he receives a letter from the president removing him from his position. Dion objects to the firing, stating that he can only be removed from office "for good cause." If Dion sues for being wrongfully removed from office, he will: ------------------------------- Roger has worked for an agency, the Federal Reserve, for ten years. Recently, Roger has heard rumors that multiple employees have contracted COVID-19, a highly contagious and potentially dangerous disease, although they have recovered completely. Nevertheless, Roger is still concerned about being around these people, so Roger asks his employer, the Federal Reserve, for a list of these employees. The Federal Reserve refuses, so Roger files a Freedom of Information Act (FOIA) request for the information. Under the FOIA, will the Federal Reserve provide Roger this list? ------------------------------- Rhea, a 45-year-old supervisor in a women's retail clothing store, recently learned that a younger co-worker was promoted to a position she had applied for. Rhea has more experience and more time with the company and has always gotten excellent scores in her annual reviews. Rhea files an action with the Equal Employment Opportunity Commission (EEOC) for age discrimination. The Administrative Law Judge (ALJ) issues an order in favor of Rhea. This decision of the ALJ is: ------------------------------- Harold is the owner of Fairway Lawn Service, which provides lawn-care services to residential and commercial customers. Harold regularly sprays his customers' lawns with a pesticide that contains glyphosate. The Environmental Protection Agency (EPA) issues a citation to Harold for commercial use of the pesticide. The EPA says glyphosate can only be used in residential applications. Harold knows that this has not been the law in the past, so he searches the EPA website for information about glyphosate. Harold finds nothing that indicates glyphosate cannot be used in commercial applications, so Harold demands a hearing to dispute the citation he has been issued. Harold will probably: ------------------------------- Phyllis has worked as a mechanic for Boeing Corporation for the last ten years. Phyllis recently found out she is pregnant, so she requests a transfer to another position that does not require as much lifting. Boeing refuses to transfer Phyllis and fires her instead. Phyllis files a complaint with the EEOC for a violation of the Pregnancy Discrimination Act, and that agency, the EEOC, decides the case in Boeing's favor. After exhausting all administrative remedies, Phyllis files a lawsuit in federal court, which will:

lose because the president has the power to appoint and remove officers of executive federal agencies. ----------------------------------------------------- No, this information is confidential and personal. ----------------------------------------------------- the final order in the case unless the store appeals. ----------------------------------------------------- win because the EPA did not give notice of the rule change regarding glyphosate. ----------------------------------------------------- show deference to the agency's decision on both questions of law and fact, upholding the decision unless it is unreasonable.

Rita has found an antique car she feels she just cannot live without, but she does not have enough money to pay for the car. Rita knows Rick, the owner of the car, pretty well, so Rita proposes a deal to him. Rita's elderly aunt Jolene has been ill for some time and is not expected to live much longer. Jolene has assured Rita for years that Rita will inherit a very large sum of money when Jolene dies. Rita offers to sign a promissory note to Rick for $500 over the asking price of the car, payable when Rita receives her inheritance. Rick agrees, because this gives him an extra $500, and Rita signs and dates the note. The note signed by Rita to Rick is: ------------------------------- Damien installs a new shower for Amelia, and Amelia pays Damien with a check. The check is made out to Damien personally, not his business. Damien signs the back of the check, "for deposit only Acct. # 384903738, Damien." 384903738 is the account number for Damien's business account, and Damien wants to make sure the check is deposited there and not in his personal account. Damien has negotiated this check using a: ------------------------------- Faith writes a check to Cecil for $500. Cynthia steals the check from Cecil and signs Cecil's name to it. Cynthia owes Andrea $500 in payment for services Andrea has provided to Cynthia. So, Cynthia negotiates the check to Andrea, who did not know the check was stolen, by signing Cynthia's name to the check. If Faith tries to recover the $500 for the stolen check from Andrea, Andrea's best defense is that Andrea: ------------------------------- Latoya writes a check to Scott for $1,000. Scott alters the check to read $11,000, indorses it on the back, and gives it to Jane. Jane indorses the check on the back and presents it to First Federal Credit Union to cash the check and receive the money. By presenting the check to First Federal Credit Union, Jane is warranting: ------------------------------- Megan writes a check to Harold for $100 and gives the check to Harold for his birthday. Harold alters the check to read $1,000 and indorses the check to Samson in exchange for flying lessons. Samson is unaware of the alteration. Samson attempts to deposit the check in his account at Southern Savings and Loan, but Southern rejects the check because of the alteration. Samson can recover:

not a negotiable instrument, because it is conditioned on Rita receiving an inheritance from her aunt in the future. ----------------------------------------------------- restrictive indorsement. ----------------------------------------------------- is a holder in due course. ----------------------------------------------------- that she is entitled to enforce the instrument, that it has not been altered, and that she has no knowledge of any unauthorized signatures. ----------------------------------------------------- $100 from Megan, because Samson is a holder in due course.

A foreign corporation is: ------------------------------- Which of the following are qualities of a non-profit corporation? (Select 2 answers)

one that was incorporated in a different state. ----------------------------------------------------- - Its goal is to earn a profit. - It does not provide dividends to shareholders.

The result of a merger between two corporations is that: ------------------------------- Which of the following must approve a merger: (Select all that apply)

only one corporation continues to exist. ----------------------------------------------------- - the shareholders of the targeted company. - the board of directors of the targeted company.

In order to capitalize a sole proprietorship, an owner is likely to: ------------------------------- Which of the following are TWO disadvantages of a sole proprietorship? Select 2 answers.

pay out of their own pocket or undertake personal debt. ----------------------------------------------------- - personal liability for debts - limited capital

In 2005, bankruptcy reform laws: ------------------------------- Which of the following is the lowest priority of claims in bankruptcy? ------------------------------- The Bankruptcy Code exempts (limited to a certain dollar amount) which type of property? ------------------------------- Which of the following statements is true about assets in the bankruptcy estate? ------------------------------- Which of these statements are true about involuntary bankruptcy proceedings? Choose 2 answers. ------------------------------- Which of the following debts is non-dischargeable in bankruptcy? ------------------------------- The type of bankruptcy where a trustee takes the nonexempt property, sells it, and uses the proceeds to pay the debtor's general unsecured creditors is called: ------------------------------- The type of bankruptcy where an individual who is in debt makes a plan to repay some or all of his creditors is called: ------------------------------- Which of the following are objections that a court may have to a discharge of the debtor's obligations? Choose 3 answers. ------------------------------- Which of the following are the three basic purposes of bankruptcy laws? Choose 3 answers.

required debtors to pay more of their debts in bankruptcy ----------------------------------------------------- medical debts ----------------------------------------------------- jewelry ----------------------------------------------------- The majority of states require debtors to follow state exemption guidelines instead of federal guidelines ----------------------------------------------------- - If a debtor has eight or more creditors with at least $1,000 in claims, any one of them may file an involuntary bankruptcy petition (WRONG) - An involuntary bankruptcy case can be filed against a farmer. (WHAT I THINK IS THE CORRECT ANSWER) - If a court dismisses an involuntary bankruptcy case, the filing creditors may be required to pay court and filing costs for the defendant ----------------------------------------------------- claims for amounts borrowed by the debtor to pay federal taxes ----------------------------------------------------- Chapter 7 ----------------------------------------------------- Chapter 13 ----------------------------------------------------- - A secured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy. - An unsecured creditor may object to being paid after a secured creditor if his claim was filed first. - An unsecured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy. ----------------------------------------------------- - allowing a struggling business to become more stable - relief of the burden of debt on a debtor - fair treatment of creditors

Johnson lives near Dollywood, a popular theme park in Tennessee. Johnson decides to begin a new money-making venture selling screen printed t-shirts from a booth just down the road from the theme park, to take advantage of the traffic that flows by on its way to the park. Johnson's t-shirts, however, will not be Dollywood-themed t-shirts; they will be Johnson's own creations. Johnson's daughter Susan helps him in his new venture by manning the booth from time to time, but Johnson has total control over everything about the business—from ordering the t-shirts, paying the bills, pricing the t-shirts, paying the taxes on his sales, and receiving all the profits from the venture. Even though Johnson put no thought into what kind of business venture he was creating when he started his business, Johnson has effectively created a: ------------------------------- Tala operates Sunshine Event Planning as a sole proprietorship. Lately, Tala has become dissatisfied with her employee, Leon. Leon continually refuses to follow directions, calls in late to work, and generally is not performing up to Tala's standards. Before Tala can fire Leon, she must obtain approval from: ------------------------------- Roy owns an engine repair shop, Roy's Custom Repair. Roy's customer Floyd is in the shop one day and trips over a tool lying on the ground. Floyd hits his head on the concrete floor and sustains massive injuries. Floyd sues Roy's Custom Repair for his injuries. If Floyd's lawsuit is successful, Floyd can recover from: ------------------------------- Evelyn decides to open a business selling her one-of-a-kind cupcakes. Evelyn will be the sole owner of the business, although she will have a few employees. Evelyn plans to operate the business under the name "Cupcake Dreams." To legally operate her business, Evelyn will need to: ------------------------------- Myra owns a tanning salon called Bronze Beauties as a sole proprietorship. Myra has six employees who work at the salon. Myra contracts COVID-19 and, after battling the disease for six weeks, she dies, leaving behind a spouse and three children. Upon Myra's death, the Bronze Beauties tanning salon:

sole proprietorship. ----------------------------------------------------- no one. ----------------------------------------------------- both Roy's Custom Repair and Roy personally. ----------------------------------------------------- register her business name. ----------------------------------------------------- is automatically dissolved.

Mary Lou writes a check for $50 to her grandson Justin as a birthday present. Instead of immediately cashing the check, Justin puts the check in a drawer and forgets about it. Eight months later, Justin discovers the check still sitting in his drawer and takes it to the bank. The bank takes the check and gives Justin $50. When Mary Lou gets her bank statement, she sees that $50 has been taken out of her account to cover the check. Mary Lou calls the bank to complain, stating that the check was so old it should not have been cashed and demanding that they debit her account $50. Because the bank has already paid the check: ------------------------------- Alicia and Alice go to Nail Emporium and get manicures. Alice is low on funds, so Alicia pays for both manicures with her debit card. Alicia then loans Alice her debit card so Alice can get her hair done later that day. When Alicia's bank statement comes in, Alicia discovers $750 in unauthorized purchases that Alice had made. Alicia notifies the bank immediately of the unauthorized purchases. Alicia will be responsible for paying: ------------------------------- Althea writes a check to Handy Dan's Home Repair for $59.75 to cover the cost of having a window repaired in her home and gives the check to Dan, the owner of Handy Dan's Home Repair. Dan alters the check by changing the amount to $559.75. Dan then takes the check to Home Federal Savings and Loan, the bank on which the check is drawn, and cashes the check. This, of course, results in an extra $500 being withdrawn from Althea's account. Home Federal Savings and Loan will be responsible for: ------------------------------- Susan receives a check for $5,000 from Liberty Mutual Insurance Company to cover storm damage to her home. Susan deposits the check in her local bank, Tipton County Savings and Loan. The check from Liberty Mutual is drawn on a different bank, First South Bank. Both Tipton County Savings and Loan and First South Bank are located in the same town. Susan is concerned about how long it will be before the funds are available, because she is anxious to begin repairs on her home. Tipton County Savings and Loan must make the funds available to Susan: ------------------------------- Candice never looks at her bank statements; she just throws them in a drawer, because she knows she has plenty of money in the bank to cover any checks she writes. One day, Candice receives a notice that she has bounced a check. Candice talks to the bank representative, and together, they discover that for the past seven months, someone has been forging checks on Candice's account. All together, the checks total $4,273. In the last month alone, there were three forged checks totaling $1,000. Because Candice has now reported these unauthorized checks to the bank, the bank will be responsible for reimbursing Candice:

the bank was justified in debiting Mary Lou's account for the $50, even though the check was more than six months old. ----------------------------------------------------- the entire $750 in unauthorized purchases. ----------------------------------------------------- debiting Althea's account $500. ----------------------------------------------------- within one business day of the date of deposit. ----------------------------------------------------- nothing

In a check collection process that involves multiple banks, which bank is the first to receive a check? ------------------------------- Which of the following are examples of an electronic fund transfer (EFT)? ------------------------------- The Electronic Fund Transfer Act (EFTA) provides for which of the following? Choose 3 answers. ------------------------------- Check fraud may occur through which of the following actions? Choose 2 answers. ------------------------------- The Uniform Commercial Code (UCC) affects a bank's relationship with its customers in which of the following ways? Choose 2 answers. ------------------------------- Which of the following is a duty or obligation imposed on a bank customer by the Uniform Commercial Code (UCC)? Choose 2 answers. ------------------------------- Under the Uniform Commercial Code (UCC), when must a depositary bank pass a check on to the next bank in the check collection process? ------------------------------- What is the bank called that receives a check from another bank in the check collection process? Choose 2 answers. ------------------------------- What is a Federal Reserve Bank called that acts as only a clearinghouse during the check collection process? ------------------------------- Which article of the Uniform Commercial Code (UCC) governs bank relationships with their customers and other banks?

the depositary bank ----------------------------------------------------- a transfer of funds through an automated teller machine (ATM), a computer, a smart phone, or online banking ----------------------------------------------------- - protection for unauthorized electronic transactions if timely notice is given - recovery of damages from a bank for an EFTA violation - that a bank must investigate an EFT complaint by a customer ----------------------------------------------------- - forging a signature - writing checks on two different banks to cover the float of funds ----------------------------------------------------- - It permits a bank to pay an overdraft and charge a fee for the service. - It allows a bank to refuse to pay a six-month-old check. ----------------------------------------------------- - A bank customer must notify the bank of the forgery or alteration of the customer's check. - A bank customer must review a bank statement in a reasonable period of time. ----------------------------------------------------- by midnight of the next banking day following its receipt ----------------------------------------------------- - depositary bank (WRONG) - intermediary or collecting bank, if it only passes the check on without paying it - payor bank, if it is the last bank in the processing chain (WHAT I THINK IS THE OTHER CORRECT ANSWER) ----------------------------------------------------- - drawee or intermediary bank (WRONG) - intermediary or collecting bank (WHAT I THINK IS THE CORRECT ANSWER) ----------------------------------------------------- Article 4

Kaleb is the CEO of Sports City, a sporting goods store. Kaleb wants to increase the sales of Sports City. Kaleb researches the market and discovers that boat sales are soaring, so Kaleb decides to add a line of boats to the inventory of Sports City. Kaleb finds what he believes is a great deal on fishing boats with Fisherman's Boat Supply and enters into a contract for $90,000 worth of fishing boats. During the first year after the fishing boats are delivered to Sports City, only one boat sells. Sports City suffers an $85,000 loss on the deal. If the board of directors tries to hold Kaleb personally liable for the loss: ------------------------------- Lillian applies for a job as the chief financial officer (CFO) of Delco Corporation. Lillian is excited about the opportunity and feels that she has a pretty good chance of getting the position. Just to make sure, Lillian decides to explore the backgrounds of the decision-makers at Delco. If Lillian knows their interests, she thinks that might increase her chances of making a good impression in the final interview. The decision-makers who will decide whether or not Lillian gets the CFO position at Delco Corporation include: ------------------------------- Savannah is shopping at King Toys Inc. when a large box of toys falls from a top shelf and strikes her, causing severe injuries. Savannah sues King Toys Inc. and each of its shareholders individually for her injuries. If Savannah's lawsuit is successful, she will be able to recover from: ------------------------------- Alma owns fifty shares of common stock in Alpha Corporation. Alma also owns eighty shares of preferred stock in the same corporation. Alpha Corporation has an upcoming vote for a new director. In the election for the new board member of Alpha, Alma will be able to cast: ------------------------------- Mary Lou is chair of the board of directors of Evening Shade Properties, Inc. Evening Shade had its annual shareholder meeting two months ago, but a new merger opportunity has come to Mary Lou's attention, and she wants to call a special meeting of the shareholders to discuss it. To successfully call a special meeting of the shareholders, Evening Shade must:

they will not be successful, because Kaleb will be protected by the business judgment rule. ----------------------------------------------------- the board of directors. ----------------------------------------------------- the corporate entity only. ----------------------------------------------------- 50 votes. ----------------------------------------------------- notify its shareholders of the date, time, and place of the meeting at least ten days, but not more than sixty days, before the meeting date and include a statement of the purpose of the meeting.

An operating agreement for a limited liability company: ------------------------------- Which of the following provisions are typically in an operating agreement for a limited liability company (LLC)? Choose 2 answers. ------------------------------- Most limited liability company (LLC) statutes provide that unless the articles of organization specify otherwise, an LLC is assumed to be managed by: ------------------------------- Which of the following is a requirement for the formation of a limited liability company (LLC)? ------------------------------- Which of the following documents spells out the rights and duties of the members of a limited liability company (LLC)? ------------------------------- What tax options are available to a limited liability company (LLC)? Choose 2 answers. ------------------------------- What is true of the liability for loss or injury caused by the wrongful acts or omissions of the members of limited liability companies (LLCs)? ------------------------------- The legal effects of dissociation of a member of a limited liability company (LLC) include: (Choose 2 answers.) ------------------------------- What is true of the dissolution of a limited liability company (LLC)? Choose 2 answers. ------------------------------- Under the ULLCA, to whom do the managers of an LLC owe a fiduciary duty? (Choose two).

typically includes provisions about choosing the LLC's management. ----------------------------------------------------- - how membership interests may be transferred - whether the dissociation of a member, such as by death or departure, will trigger dissolution of the LLC ----------------------------------------------------- its members. ----------------------------------------------------- articles (or certificate) of organization ----------------------------------------------------- operating agreement ----------------------------------------------------- - An LLC with two or more members can choose to be taxed as a partnership or a corporation. - An LLC with only one member can choose to be taxed as a corporation or a sole proprietor. ----------------------------------------------------- The LLC as an entity can be held liable, but members themselves are not personally liable. ----------------------------------------------------- -the dissociated member loses the right to participate in management. - the dissociated member's duty of loyalty to the LLC terminates. ----------------------------------------------------- - Members of an LLC may stipulate in their operating agreement that certain events will cause dissolution. - A court may order the dissolution of an LLC under certain circumstances, such as the members engaging in illegal conduct. ----------------------------------------------------- - The LLC itself. - The members of the LLC.