Prices Business Test

Arnold is the cheif executive officer of Beta corporation. Arnolds responsibilities include decisions on product development. marketing and other significant business directions. Arnold is subject to the approval and oversight of beta's board of directors. Carol is a beta manager whose duties include the firms day to day hiring,firing,purchasing and selling. Dave is a beta salesperson, whose daily activites are controlled by Carol. Erin writes technical manuals for Beta's control, but has no dealings with Beta customers or suppliers. Fred edits the manuals ona contract per manual basis and is not other wise subject to Beta's control. 1. Name each person or entity that is a principle 2.Name each person or entity that is an agent 3. Name each person or entity that is an employee 4.name each person or entity that is an independent

1. beta 2. arnold carol dave 3. carol dave erin 4. fred

Chase the owner of Data Master, a sole proprietorship, wants to obtain additional business capitol without changing the nature of his business.. This opportunity is more likely limited to?

Borrowing funds

A closely held corporation must have a minimum of one thousand shareholders to be treated as an S corporation for tax purposes

False

A corporation is an oral or written agreement of two or more parties to carry on a business for profit

False

A de jure corporation is one that is formed for a single purpose

False

A limited liability company is a citizen only of the state in which it was formed

False

A partner always has the right to dissociate from the partnership.

False

A partner can be held liable for a partnership obligation only if he or she participated in, or knew about, whatever it was that gave rise to the obligation.

False

A partners fiduciary duties of the partnership may be waived only if there is a written partnership agreement

False

A person who cannot legally inter into a certain contract directly can do so indirectly through and agent

False

A principle may escape personal liability for hazardous activity by employing an independent contractor

False

A shareholder's right to inspect corporate books and records is identical to that of a general partner.

False

Agency relationships come about by voluntary consent and agreement of the parties consideration is required and the agreement must be in writing

False

All parties to an agency relationship have the power and the right to terminate the relationship at any time

False

Among three partners, unless agree otherwise, unanimous consent is required to manage the business of the partnership.

False

An agent can represent two principles in the same transaction, so long as neither is aware of the dual capacity

False

An independent contractor is, by definition an employee because the persons physical conduct controlled or subject to control by the employer

False

Exemptions from federal securities laws are also exemptions from state securities laws

False

If there is no fixed duration of the partnership specified, the partnership is a partnership at will, which means that it cannot be dissolved

False

In a limited partnership, ever partner has full responsibility for the management of the partnership and its obligations

False

The doctrine of respondeat superior imposes liabilty for an agents tort on a principle without regard to the personal fault of the agent

False

The equal dignity rule requires that a principle and an agent act in good faith and with mutual respect in their dealing with each other

False

The implied powers of a corporation are found in its articles of incorporation

False

The registered agent of a corporation is the person designated by the corporation to submit the sales prospectus to person interested in purchasing stock in the corporation

False

To form a limited liability company, articles of organization must be filed with an attorneys office

False

Under the business judgement rule, directors cannot be held liable for bad faith, fraud, or a breach of fiduciary duties

False

When a person who is not a partner, a court may impose liability- and partnership rights- on the alleged partner.

False

Carmen and Diego are shareholders of Espresso Inc. Carmen's written authorization to Diego to vote her shares at a shareholder's meeting is

Proxy

A Ponzi scheme is a fraudulent investment from new capital invested with the fraudsters returns new capital invested with the fraudsters instead of from a legitimate investment

True

A corporation can be formed "to engage in any lawful act or activity."

True

A limited liability partnership allows professionals to avoid person liability for the malpractice of other partners

True

A principle who creates ana exclusive agency and then competes with the agen can be held libale for the agent's lost profits or sales

True

A shareholders preemptive rights allow him or her to have an automatic right to purchase a prorated share of a new issue stock

True

A single person carrying on a business for profit, with control over its operation, can constitute a partnership.

True

Any person can be an agent, regardless of whether he or she has the capacity to contract

True

Because state corporate laws differ, persons wishing to incorporate may look for the state that offers the most advantageous tax or other provisions

True

Before shareholders may bring a derivative action suit on behalf of a company they must submit a written demand to the corporation asking the board of directors to take action

True

By using agents, a principle can conduct multiple business operations simultaneously in various location

True

Every act of a partner concerning partnership business binds the firm.

True

In a sole proprietorship, the proprietor bears the burden of any liabilities by the business enterprise.

True

In many instances, agency low governs the relationships among partners.

True

One of the essential elements of a partnership is an equal right to be involved in the management of the business.

True

When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation

True

Where there is a dispute over whether or not a partnership exist, the sharing of profits and losses from the business creates presumption that a partnership exist

True

What are the four primary sources of law in the united states

US constitution statutes administrative common law

Levon, an agent for Milled Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Milled Grains and the company ratifies the contract. The contract is?

Valid

What is a tort?

a civil, other than a contract, for which a remedy is provided

All of a certain corporations small number of shareholders agree that the firm can operate without directors, bylaws, shareholder meetings, stock certificates and formal records of shareholder's decisions. This firm is most likely

a close corportion

Sweetwater corporation is incorporated in Texas. Outside that state within the United states the firm is

a foreign corporation

Resort Gift Shop is operated as a partnership, with five partners. Shan has a one third interest in the firm. Each of the other partners has a one-sixth interest. Thieu is the senior partner. With respect to management decisions

a majority of the partners must agree

A limited liability company that wants to distribute profits to its members could avoid "double taxation" by electing to be taxed as

a partnership

Without creating a separate business organization, Rey starts up Street Cruiser, a pre-owned auto sales enterprise. This enterprise is?

a sole proprietorship

bayside Restraunt LLC is a limited liability company. Its sole member is Conrad. For federal income tax purposes unless the firm indicates otherwise it will automatically be taxed as

a sole proprietorship

What are the elements necessary to form a contract?

agreement consideration capacity legality

Limited Liability business forms, such as LLCs, LPs, and LLPs, Offer tax advantages that are similar to those offered by

an S corporation

Rosa introduces Sal to her friend trey as "my associate". Sal purports to act as Rosa's agent in a business transaction with trey. if Rosa is liable for Sal's actions, it will be because their relatinship is

an agency by estoppel

Motor Parts Sales Inc. hires Nolly to work on its shipping dock, accepting deliveries, and dispatching trucks, and dealing with customers and drivers. With respect to Motor Parts, Nolly is most likely

an agent

Under the securities act of 1933, securities include

any instrument representing corporate ownership or debt

What do we mean by the term "binding authority" in American Law

any law the court must follow in reaching decision

Maury, Neil, and Ogden want to form a limited partnership to manage their photo studio. Their firm must have

at least one general partner and one limited partner.

Reno an engineer for Shale corporation, learns that the firm will increase the dividend it pays to shareholders. Reno buys 10,000 shares of company stock. When the dividend is announced to the public and the price of the stock increases, he sells the shares for profit. He would not be liable for insider trading if the information about the dividend was

available to the public before he bought the stock

Bev is the cheif executive officer of Chef Cafes Inc.. which is required to file certain financial reports with the securities and exchange commision (SEC). under the sarbanes-oxley act of 2002. Bev must

certify that the reports are complete and accurate

What are the factors to consider in selecting the beast type of business entity to form?

ease of creation,tax consideration,business debt,need/ability to raise capital

Sol and Tom agree to form a partnership to sell real property. To be enforceable, their agreement must be

in writing

Jess, Kia, and Len form a partnership to design and test energy storage facilities and equipment. The liability of all partners is limited to the amount of their investments in the firm. This entity is most likely

incorrect

Luis hired Mieko to act as his agent to buy Ngoc's Southeast asian cafe. Luis tells mieko to reveal only that she is buying the restraunt on behalf of a third party, without telling Ngoc's seller who that third party is. Luis is

incorrect

Cam an accountant for discount Inc.. Learns that the companys soon to be announced quarterly sales figures exceed expectations. Cam tells d who tell frye who buys 100 shares of the companies stock. Frye knows that Ed got the informatoin from Cam. When discount publicly announces the figures, frye sells the stock for a profit. Under the securities exchange act of 1934, Ed is most likely

liable for insider trading

Roy is a director of Sales Inc. Sales enters into a contract with telecenter corporation in which Roy has a person interest. Roy must

make a full disclosure of the conflict of interest

In an alabama civil suit for negligence, what is the effect of the defendant showing "contributory negligence" on the part of the plaintiff?

neither party can recover damages from the other

Clark hires Dell, a real estate broker, to sell his beach house, The house is destroyed in a storm before it can be sold. Dell is Clark's agent

no more

Vera is one of three partners in Waffles Food Truck. Concerning all aspects of the partnership business, vera is entitled to information

on a complete basis

Rex forms Shell comapny to assume debts that he does not wish to pay. The firm is not intended make a profit and Rex does not provide it with sufficient capital. This most likely warrants

piercing Shell's corporate veil

To avoid sharing control with someone they do not know or like, it would be most effective for the shareholders of a close corporation to

restrict the transferability to outside persons

What is a "pass-through" business entity?

the business does not pay taxes so they are passed through the owner who will pay personal taxes

What is an "automatic stay" and what is its effect on creditors?

the creditor cannot attempt further collection of the debt until the court approves it

Dain is a partner in Eco Baits, a pest control service organized as limited partnership, which cannot pay its debts. Dain is liable for the debts

to the extent of his capital contribution to the firm

Under the doctrine of respondent superior, a corporation can be held liable for

torts committed by its agents of officers

Han is a shareholder of Insulation Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Han files a suit on its behalf. Any damages recovered by the suit will go to the firm's

treasury

Forward looking forecast that turn out to be wrong can be protected against liability for securities fraud is they include "meaningful cautionary statements'

true

If an agent has represented himself or herself as possessing special skills, the agent is expected to use them

true

If the procedures for incorporation are not followed precisely, others may be able to challenge the existence of the corporation.

true

The securities echange act of 1934 provides for continuous periodic disclosures by certain publicly held companies

true

Under the sarbanes oxley act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements

true

When a corporation pays a dividend, it pays the dividend to the shareholders of record listed in the corporations books, and not on the basis of possession of a stock certificate

true

When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principle is liable to the third party

true

While the securities and exchange commision reviews a registration for completeness. the securities can be offered for sale but no sold

true

Movie time corporation files a registration statement and delivers a prospectus to the appropriate parties. These items are intended to enable evalutation of certain financial risk

unsophisticated investors