BL Ch.40, 41 & 43,44
Subject to constitutional limitations, corporations may be regulated by state statutes.
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The Uniform Partnership Act, a codification of partnership law, has been adopted by 49 states.
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The assignee of a partner's interest in the partnership becomes a partner only with the consent of the other partners.
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The corporate form of business continues regardless of changes in stock ownership.
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The fact that parties share profits and losses is strong evidence of the existence of a partnership.
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Under the RMBCA, a preincoporation subscription agreement is irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation.
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A corporate seal is required in order for the corporation to enter into a binding contract.
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A corporation may properly exist without a name.
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A corporation must have at least two shareholders.
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A franchisor's freedom from liability to third parties dealing with its franchisees may be defeated upon a showing of excessive control of the franchisee's activities by the franchisor.
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A partner admitted as a partner into an existing partnership has unlimited liability for all obligations of the partnership arising before such admission.
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A partnership must have a name.
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A provision giving a corporation the right to purchase a shareholder's shares on the death of the shareholder is invalid.
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A quasi-public corporation is one that is organized for charitable or benevolent purposes.
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A shareholder can give a proxy to vote shares only to another shareholder.
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A sole proprietor must file a certificate indicating that he or she is commencing operations and pay a single organizational fee.
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As an owner of the corporation, a shareholder has the right to inspect the books of the corporation for any purpose, regardless of whether the inspection is related to the shareholder's interest as a shareholder.
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Each shareholder owns a proportionate share of the property of the corporation.
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Franchise disclosures are not required under federal law.
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Partnership property is only that property contributed by the partners.
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Preferred stock cannot have priority over common stock with respect to dividends.
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Shares of stock may not be acquired through subscription but may be acquired through a transfer of existing shares from a shareholder or from the corporation.
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Sharing of gross returns, as compared to the sharing of profits, is strong evidence of a partnership.
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Subchapter S corporations have the benefits of limited liability as in partnerships and are taxed as corporations.
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The Federal Trade Commission has adopted a franchise disclosure rule that requires franchisors to give prospective franchisees a full disclosure statement thirty (30) days before a franchisee signs a contract or pays any money for a franchise.
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The death of a majority shareholder terminates a corporate enterprise.
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The relationship between the franchisor and the franchisee is ordinarily an arm's length employment relationship.
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The sharing of profits and losses is conclusive evidence of partnership.
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To correctly transfer shares of stock, a delivery from the owner of the shares directly to the transferee is required.
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"Conglomerate" describes the relationship of equal companies engaged in similar fields of business activity.
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A business corporation may legally merge with a charitable corporation.
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Shareholders have the right to bring a derivative action on behalf of a corporation that refuses to exercise its right to bring such action.
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A contract for the sale of shares must be evidenced in writing and include the price and quanitity of the securities.
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A cooperative consists of a group of two (2) or more independent persons or enterprises that cooperate for a common objective or function.
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A corporation is a separate legal entity capable of owning property, contracting, and being sued in its own name.
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A corporation is considered a person for purposes of the due process clause of the United States Constitution.
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A corporation may be an incorporator of another corporation.
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A corporation may be judicially dissolved when its management is deadlocked and the deadlock cannot be broken by the shareholders.
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A de facto corporation is accorded legal recognition despite some recognized defect in its incorporation.
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A franchise agreement in which teh franchisor grants the franchisee authority to manufacture and sell products under the trademark(s) of the franchisor is known as a manufacturing or processing franchise.
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A merger is subject to antitrust law, while a consolidation is not.
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A partner cannot make a general assignment of firm property for the benefit of creditors unless authorized by the other partners or unless they have abandoned the business.
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A partnership involves partners' contributions of capital, services, or a combination of these.
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A partnership is dissolved by the death of a partner.
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A partnership is organized for the profit of its members.
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A partnership may be formed for any legal purpose.
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A partnership may occur even though the parties did not label their relationship a partnership.
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A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.
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An unincorporated association cannot sue or be sued in its own name.
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Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it.
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Franchisors may be found liable for the wrongful conduct of their franchisees on an apparent authority theory when the conduct of the franchisor creates an appearance of authority.
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Freedom from liability to third persons dealing with the franchise holder is one of the main reasons that franchisors grant franchises.
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If a corporate stock has a par value, the person subscribing to the stock and acquiring it from the corporation must pay that par value amount.
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If the negligence of the franchisee causes harm to a third person, the franchisor is not liable because the franchisee is an independent contractor.
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Membership in a corporation is based on the ownership of one or more shares of stock of the corporation.
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Most states have a general corporation code, and anyone who satisfies code requirements and files the necessary papers with the government may automatically become a corporation.
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No writing is required for a contract by which a broker agrees with a customer to buy or sell securities for the customer.
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Partners have no authority after dissolution to create new obligations, but they do retain authority to perform any acts necessary to wind up the business.
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Persons who are not partners under appropriate circumstances may be held liable to third persons as though they were partners.
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Restrictions on the transfer of stock are valid if they are not unreasonable.
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