BLAW Exam 3

Mortgage will typically contain

A description of the property The amount of the debt involved

Which of the following items are not distinguished by a Chapter 7 bankruptcy?

Alimony

Chapter 11 bankruptcy's, which are filed by businesses:

Allow a business to keep operating under reorganization of its activities and its debts

Voluntary Chapter 13 bankruptcies:

Apply to individuals only

To create a limited liability company, creators must produce:

Articles of organization

A secured creditor is one who:

Can take a debtor's property to try to satisfy the debt

The final stage of bankruptcy is known as:

Discharging bankruptcy

Unless otherwise stated by contract, the law presumes which of the following out to be true

Each partner has an equal voice and partnership management A majority vote controlled ordinary business decisions Profits are to be divided among the partners Regardless of the amount that's in the partnership, each partner has an equal vote

Unless otherwise stated by contract, the law of partnership presumes which of the following not to be true?

Each partner has an equal voice in partnership management A majority vote controls ordinary business decisions Profits are to be divided among the partners Regardless of the amount invested in the partnership, each partner has an equal vote ALL OF THE ABOVE ARE TRUE

According to the statute of fraud mortgages may be either oral or in writing.

False

After reviewing a corporation's articles of incorporation for compliance with state standards, and its application, the state issues corporate bylaws

False

By law, all partners in a general partnership must have equal votes

False

Chapter 13 bankruptcy proceedings are used mainly by businesses

False

In a bankruptcy proceeding all creditors must be paid an equal share of the assets available, according to the amount of debt owed

False

In the priority of classes of creditors, taxes owed to the government come before any other payments

False

LLC members have unlimited liability for torts committed in the name of the LLC

False

Limited Liability companies have been popular since the late 1800s

False

Partners in a partnership, like corporate shareholders, have the right to sell their own ownership shares whenever they want to whoever they want

False

Partners in a partnership, like corporate shareholders, have the right to sell their ownership shares whenever they want to whoever they want

False

Sole proprietorship must register with their state government to be able to operate a business legally

False

Sole proprietorships must register with their state government to be able to operate a business legally

False

To be enforceable, a security interest must be detached from the debtor

False

To terminate a partnership, the partners must go through a deconstruction process

False

To terminate a partnership, the partners must go through a deconstruction process.

False

Under Chapter 11 proceedings, business are forced to sell all company assets to pay outstanding debts.

False

Unless specified otherwise by contract, each partner's number of votes depends on his percent of total investment in the partnership

False

When the sole owner of a corporation dies, the corporation cease to exist and the business must be reorganized.

False

Partners in a partnership owe each other:

Fiduciary duty

When a business lends another business money, it should perfect its security interest by

Filing its financing statement with the state secretary of state

When a businesss lends another business money, it should perfect it security interest by:

Filling its financing statement with the state secretary of state

In a sole proprietorship, profits are taxed to the

Individual owner of the propiertoship

In a ____, the debit or make same monthly payment and more that can be added to the amount of overtime

Installment account

Bankruptcy Law:

Is federal statutory law

The owner of a sole proprietorship

Is legally the same as the business Is taxed same as the business May hire any numbers of employees

A certification of incorporation from the government

Is necessary for a corporation to be recognize legally

The primary distinction in secured credit transaction is whether the property

Is real or personal

A limited Liability company:

Is taxed like a partnership Is taxed like a corporation

A creditor is a person or business who:

Lends money to someone else

The business organization that has a least one general partner and other investors who have limitied liability is

Limited Partnership

Under Chapter 13, which kind of that is subject to a different repayment schedule?

Long term, secured debt

Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Done is unable to make his mortgage payments. Western forecloses on Don's house and sells it in a judicial sale. The bank gets $95,000 for the house. In this case, it:

Must return the extra $5,000

The articles of incorporation usually provide all the following except

Name of corporation Names of all Shareholders Name of the registered agent Classes of stock being issued ALL OF THE ABOVE MUST BE PROVIDED

Under a floating lien:

New inventory is used to replace collateral that is sold

If a debtor refuses to pay an unsecured creditor, and the debtor in insolvent, the unsecured creditor collects:

Nothing

If a debtor refuses to pay an unsecured creditor, and the debtor is insolvent, the unsecured creditor collects:

Nothing

A ____ is an association of two or more persons to carry on a business as co-owners for profits

Partnership

To create a legally valid security interest, a business must ensure that the interest is:

Perfected

In order to establish a superior right, a creditor must:

Prohibit a default

In an ____ the debtor makes a minimum monthly payment and more debt can be added to the account over time.

Revolving account

In the case of bankruptcy, which of the following classes of creditors have highest priority?

Secured creditors

The Board of Directors of the corporation are elected by:

Shareholders

Corporation consist of legally listing groups, not including

Stakeholders

Candy bought a sofa from Max on credit. She is to make 5 monthly payments of $200 each. After one month Candy stop making payments. Max is secured creditor; he may:

Take steps to repossess the sofa from Candy

The rules that regulate and govern the internal operations of a corporation are known as:

The certificate of incorporation The bond The corporate constitution Statutes of business NONE OF THE ABOVE

Brandon files for a Chapter 11 bankruptcy on behalf of his company, Brandon's BBQ the company is allowed to continue its operations during this period. Brandon is:

The debtor in possession A trustee

A written partnership agreement typically specifies the following except:

The ownership interest of the partners The method of accounting to be used The name of the partnership business The procedures for dissolution of the partnership

A written partnership agreement typically specifies the following EXCAMPT

The ownership interests of the partners The methods of accounting to be used the name of the partnership business the procedures for dissolution of the partnership ALL OF THE ABOVE

Billy wants to borrow $10,000 to start a Male belly dancing business. Creditors are not anxious to lend him the fund. Billy convinces Gary to back up his credit. Gary is:

The surely

Tiny borrows $2000 from First Bank. Mike is the surety on the lawn. Tiny defaults and first requires Mike to pay the balance of the loan. In this case, Mike may sue:

Tiny for reimbursed or exonerate him

A garnishment is when a creditor gets the right to attach a certain percentage of debtor's wages

True

A public corporation is one that trade shares on stock markets

True

Bankruptcy proceedings may be voluntary or involuntary

True

Directors of a corporation responsible for making basic corporate policy.

True

Even though a person is declared bankrupt, he or shell will still have to pay back student loans: they are usually not eliminated

True

If a customer does not pay a judgment entered against her by a court, the party that won the judgment may seek a writ of exoneration.

True

If the court "pierces the corporate veil" it may hold the shareholders personally liable for corporate debts

True

In order to protect the rights of the mortgagee, a mortgage should be recorded

True

In the priority of causes of creditors, taxes to the government time before any other payments.

True

Limited liability companies are guided by an operating agreement

True

Shareholders are the owners of a corporation

True

The debts owed to secured creditors have the greatest protection in bankruptcy proceedings

True

The income from a partnership is taxed as a personal income of the partner.

True

The law of governing bankruptcy is federal statutory law

True

Under the UCC, a security interest in consumer goods perfects automatically when the consumer signs the agreement

True

Under the UCC, a security interest in consumer goods perfects automatically when the consumer signs the agreement.

True

In general, if a partnership agreement does not specify what happens in case of the death or departure of a partner one looks to:

Uniform Partnership Act

In general, if a partnership agreement does not specify what happens in case of the death or departure of a partner, one looks to

Uniform partnership act

There are two types of dissolution of a corporation:

Voluntary and Involuntary

Accounting to the UCC, a creditor may repossess a product in which it has security interest:

Without judicial process So long as this doesn't cause a breach of peace

A secured creditor is one who

can take a debtor's property to try to satisfy the debt