Business Organizations law Final (Multiple Choice)
Charlene, Darrin, and Eleanor form a partnership. They make no express agreement concerning how profits are to be divided. Of the $30,000 initial capital of the firm, Charlene and Darrin each contributed $12,000. Eleanor contributed $6,000. The partnership had a profit of $15,000 during the first year of operation of the business. Given this information, Darrin's share of the profit is _____. A. $5,000 B. $10,000 C. $6,000 D. $12,000
A
Alice, an officer of ABC Company, won a lawsuit filed against her in which the plaintiff claimed that she was personally liable for some problems with products of ABC Company that resulted in injuries to consumers. Alice reasonably and personally expended significant sums defending the lawsuit. Which of the following is true regarding indemnification rights, if any, that she would have? A. Indemnification of such expenses is mandatory because she prevailed in the litigation. B. Indemnification of such expenses is available only if a majority of disinterested directors authorized the expenditures either before they were incurred or after the fact. C. Indemnification of such expenses is available only if a majority of disinterested directors authorized the expenditures before they occurred. D. Indemnification of such expenses is available only if a majority of disinterested directors authorized the expenditures after
A
Authority by virtue of an office is referred to as: A. ex officio authority. B. apparent authority. C. inherent authority. D. actual authority.
A
Bruce, a lawyer and member of a limited liability partnership consisting of other lawyers, committed legal malpractice. Which of the following is true regarding the liability of Bruce and the other members of the limited partnership? A. Bruce has personal liability, but the other members of the limited liability partnership do not. B. All members of the limited liability partnership have personal liability, but only to the extent of the profits made in the previous two tax years. C. All members of the limited liability partnership have personal liability for Bruce's actions. D. Bruce has primary personal liability, and the other members of the limited liability partnership only have personal liability once Bruce's assets are extinguished.
A
Equity securities: A. transfer ownership interest in the corporation. B. create a debtor-creditor relationship. C. are typically subject to a periodic interest charge. D. have a due date for the balance owed.
A
If a partner assigns his or her partnership interest to a creditor, the creditor is entitled to _____. A. receive that partner's share of the profits B. obtain an injunction (temporary in most situations, and permanent on rare occasions) against the other partners C. examine the partnership's books D. any information about partnership interests
A
A partner who wrongfully dissociates _____. A. can ask the court to appoint a substitute partner on his behalf B. loses the right to demand a dissolution and winding up C. can participate in the winding up process, especially if she has financial expertise D. must not be paid the value of his partnership interest if the firm continues
B
Acme Chemical Consultants, a general partnership, discharges from its facility a pollutant prohibited by the Environmental Protection Agency (EPA). In this case, _____. A. the general partners are personally liable unless the firm has inadequate assets B. the firm is liable for the resulting fines C. only the partners who ordered the discharge are personally liable D. all partners will be imprisoned, as the violation of an EPA standard is a crime per se
B
Any stock that has a preference over another class of stock is called: A. split stock. B. preferred stock. C. common stock. D. dividend stock.
B
Having just passed the bar examination, Thomas and Millicent have decided to open their own law partnership in Detroit, Michigan. It will be a general services firm, with Thomas and Millicent practicing in many different areas of the law. The young lawyers hope the practice will be successful (for now, though, it will just involve the two of them), and they would like to operate the partnership together for their entire careers. Thomas and Millicent have a(n) _____. A. limited partnership B. partnership at will C. equitable partnership D. partnership by estoppel
B
If Jack and Victor were co-sureties for John, Jack's right to reimbursement would include _____. A. the right to any collateral in the possession of the creditor B. the right to recover from the principal the costs paid on the principal's obligation C. the right to share the costs paid with Victor D. all the rights that the creditor had
B
Mike, the CEO, of ABC Corporation, made an informed decision about purchasing the assets of a competing company for ABC Corporation. There was no conflict of interest, and he had a rational basis for the decision. Unfortunately, the decision turned out to be a bad one, and ABC Corporation lost significant amounts of money based on the transaction. Which of the following would be the most likely result should a group of shareholders seek to hold Mike personally liable for that decision? A. Mike would likely be held liable unless he can establish that ABC Corporation was already in financial trouble and that taking significant risks in order to improve the situation of the corporation was necessary. B. Mike would likely not be held responsible for the losses based on the business judgment rule. C. Mike would likely not be held responsible for the losses unless it would be established that he personally benefited from
B
One advantage of the corporate form over that of a partnership is that: A. partnerships are usually less profitable. B. corporations can more easily hold property over long periods of time. C. partnerships are subject to double taxation. D. corporations do not have to worry about legal compliance issues.
B
Partners may agree to permit a partner to sell his interest to another and to accept that person as a substitute partner. What are these agreements called? A. Third-party beneficiary agreements B. Buyout agreements C. Novation contracts D. Subrogation contracts
B
Someone with confidential, material information concerning the corporation is referred to as a(n): A. principle. B. insider. C. executive. D. agent.
B
The following form of business organization exposes the owner to personal liability the most: A. Limited Liability Partnerships. B. Sole proprietorship. C. Corporation. D. LLCs.
B
Thomas and Millicent have operated their law partnership in Detroit, Michigan for five (5) years. In the early years, the practice was quite successful, so much so that two (2) years ago, Thomas and Millicent took on another lawyer, Forrest, as a third partner. Things have not worked out with Forrest. He has shown up to the office and to court on numerous occasions intoxicated, and clients have expressed regret and even anger over his poor lawyering. One client recently expressed to Thomas and Millicent that a "hung over" Forrest slept through most of his trial, resulting in an adverse verdict for the client and the firm. Both Thomas and Millicent are considering dissolution of the partnership. Not only are they upset (an understatement) with Forrest, but they are even seriously considering going their own separate ways because of the bad experience. Who may demand a dissolution and winding up of the existing partner
B
Under which of the following contract devices does a seller usually retain title on a property until the full price for the property is paid? A. A strict foreclosure B. A land contract C. A mortgage D. A deed of trust
B
Which of the following federal administrative agencies has created rules requiring more information to be turned over to a franchisee regarding the franchise deal? A. SEC B. FTC C. IRS D. FCC
B
Which of the following has is indicative of owners who are family or small group of people who know one another? A. Personally held corporation B. Privately held corporation C. Individually held corporation D. Publicly held corporation
B
Which of the following is false regarding the attributes of a limited liability company? A. They require the filing of articles of organization with the secretary of state. B. There are restrictions on the number of members a limited liability company may have. C. Members have limited liability unless the corporate veil is pierced. D. All 50 states have statutes that permit businesses to operate limited liability companies.
B
Which of the following is not true of shareholders? A. Shareholders elect directors. B. Shareholders make management decisions. C. Shareholders can amend the articles of incorporation. D. Shareholders are the owners of the corporation.
B
Which of the following is true regarding unsecured credit? A. Only consumers use unsecured credit for their personal transactions. B. The unsecured credit transaction involves maximum risk to the creditor. C. When goods are delivered on unsecured credit, the creditor retains all rights in the goods. D. The creditor may require the debtor to convey to the creditor a lien on the debtor's property.
B
Which of the following was the result in Friedman v. Sebelius, the case in the text in which corporate officers were charged criminally for their corporation's misbranding of a painkiller on the basis of the responsible corporate officer doctrine under which corporate officers may be held criminally liable for corporate violations of the Food, Drug, and Cosmetic Act? A. The criminal convictions were upheld because although the defendants did not know of or participate in the actual misbranding, they had knowledge of it after the fact and failed to report the wrongful activities to governmental authorities, and were therefore subject to criminal liability under the responsible corporate officer doctrine. B. The criminal convictions were upheld because criminal liability under the responsible corporate officer doctrine extended to those who had the authority to prevent or correct the misbranding and failed to act even
B
True or False: With a due-on-sale clause, a would-be seller must gain the permission of the corporation's board of directors or shareholders for any sale of shares other than to the corporation or pro rata to present shareholders.
False
True or False: The law does not treat a partnership as dissolved when a partner dies.
False
True or False: A promoter's liability on a preincorporation contract does not terminate when a novation is signed.
False
True or False: As a shareholder, you may not appoint another person to vote for you.
False
True or False: Dividends may only be distributed as cash.
False
True or False: Failure to appoint a registered agent in its state of incorporation is not grounds for an involuntary dissolution of a corporation.
False
True or False: Many criminal statutes were not intended to apply to corporations.
False
True or False: Promoters are agents of the corporation prior to its incorporation.
False
True or False: The Sarbanes-Oxley Act requires CEOs and CFOs of private corporations to certify that, to their knowledge, all financial information in quarterly and annual reports is not false or misleading.
False
True or False: The business judgment rule allows the courts to substitute their business judgment for that of the corporation's managers.
False
True or False: Under the MBCA, owners of a nonvoting class of stock do not have a right to vote under any circumstances.
False
True or False: A corporation is affected by the death of a shareholder.
False
True or False: According to the Model Business Corporation Act (MBCA), the number of shares of capital stock the corporation is authorized to issue must be included in the articles of incorporation.
True
True or False: The traditional judicial rule is that the court will pierce the corporate veil when the corporation has been dominated by one or more of its shareholders and the domination has resulted in an improper purpose.
True
True or False: When a takeover attempt is involved, the directors must meet before they are afforded the business judgment rule defense when they oppose takeover attempts.
True
True or False: A court may pierce the corporate veil if the corporation is undercapitalized.
True
True or False: Close corporation shares are seldom intended to be sold to the public at large.
True
True or False: Courts have begun to recognize a fiduciary duty in corporate officers and majority shareholders to treat minority shareholders fairly.
True
True or False: Directors are not agents for the corporation by virtue of that office.
True
True or False: Generally, corporations are not required to compensate promoters for the services they render during the preincorporation process.
True
True or False: Generally, promoters are liable for contracts they make on behalf of corporations that are not yet formed.
True
True or False: If two (2) corporations consolidate into a new corporation, both of the old ones are dissolved.
True
True or False: Most incorporated businesses are close corporations.
True
True or False: Requesting access to company records with the goal of making a copy of the shareholder list in order to wage a proxy contest to unseat present management is considered a proper purpose.
True
True or False: The articles of incorporation serve the same function as a charter.
True
True or False: The current trend in law is to permit the corporation to issue shares in return for the promoters' preincorporation services.
True
True or False: The shareholder contract is not a document signed by the shareholder and by the corporation.
True
True or False: All the partners in a limited liability partnership have equal say in its management, but this maybe altered by agreement.
True
True or False: An LLC may be sued in its own name.
True
True or False: By statute, piercing the corporate veil is also an option for a plaintiff when a limited liability company is involved.
True
Sue believes that Ted, an officer of ABC Corporation in which she owns stock, breached his duty to the corporation by setting up a business to compete with ABC, resulting in significant profits to Ted. Sue believes other some shareholders, officers, and directors, have aided and assisted Ted in this endeavor. Therefore, Sue sues Ted alleging breach of fiduciary duty. She does not inform other officers, directors, or shareholders because she does not want them to interfere. Which of the following is the most likely result in regard to her lawsuit? A. Her lawsuit should be dismissed because she is pursuing a type of derivative action but did not take appropriate steps in regard to seeking action on the part of the corporation. B. She will be allowed to proceed with her action as in individual action, but she must seek to join all directors other than Ted in the action. C. She may proceed with her action as a derivativ
A
Taylor has purchased a $250 sweater on her charge account at Timberlyne Department Stores, Inc. (Timberlyne). Timberlyne has extended _____ credit to Taylor. A. unsecured B. collateral C. Uniform Commercial Code (UCC) Article 9 D. secured
A
To act contrary to a partnership agreement, _____. A. a unanimous agreement among the partners is required B. the approval of only senior partners is required C. the Revised Uniform Partnership Act (RUPA) empowers each partner with implied authority D. a vote of the majority prevails
A
When property is exchanged for shares of stock and the property is overvalued, the stock is referred to as: A. Watered stock B. Diluted stock C. Liquid stock D. Toxic stock
A
Which of the following has the power to pay out corporate funds for proper purposes and can properly receive payments for the corporation? A. Treasurer B. Secretary C. Director D. Vice President
A
Which of the following is false regarding the duty of due care and diligence imposed on directors and officers of a corporation? A. The MBCA standard requires officers to personally investigate all facets of decisions and prohibits reliance on the opinions of others. B. Directors and officers may be liable to the corporation for failure to act with due care and diligence. C. The duty of care requires that directors and officers make a reasonable investigation before making any corporate decisions. D. The greater the actual qualifications of the individual, the greater the level of the duty that would be expected.
A
Which of the following is true of a partner's right to compensation? A. The partners may agree that one or more of them is to be paid a salary in addition to sharing in profits. B. A partner is generally entitled to a salary or wages. C. Compensation is never presumed to be the partner's share of the profits. D. The Revised Uniform Partnership Act (RUPA) prohibits drawing accounts for partners.
A
Which of the following is true regarding accommodation sureties? A. They are protected by the courts at a higher level than other types of sureties. B. They are individuals who are paid for acting as a surety. C. They must show that they will be harmed by an extension of time before they are relieved of responsibility. D. They are professional corporations that take payment for acting as a surety.
A
Zahra agreed to act as surety for a loan taken by her son, Rudi, from the Third National Bank. The terms of the loan provided that Rudi would pay the loan off in twelve (12) monthly installments at ten (10) percent interest. If Rudi renegotiates the terms of the loan with the bank without Zahra's knowledge and is now obligated to pay the loan off in twelve (12) monthly installments at nine (9) percent interest, which of the following is true? A. Zahra must notify Rudi in writing that she no longer wishes to act as surety in order to avoid liability under the new terms. B. Zahra is no longer obligated because her responsibilities as a surety cannot be changed without her consent. C. Zahra must notify the bank in writing that she no longer wishes to act as surety in order to avoid liability under the new terms. D. Renegotiation of the note by Rudi does not relieve Zahra of liability as surety because the new terms are
B
A corporate officer can be found liable for the illegal behavior of a subordinate: A. only when the officer actually knew of the illegal conduct and failed to take reasonable measures to prevent it. B. only when the officer actually knew of the illegal conduct regardless of whether the officer tried to stop the illegal conduct. C. when the officer knew of or should have known of the illegal conduct and failed to take reasonable measures to prevent it. D. when the officer knew or should have known of the illegal conduct regardless of whether the officer tried to stop the illegal conduct.
C
A corporation is liable for all torts committed by its employees: A. while acting within the scope of their employment but only if the corporation has failed to instruct the employee to avoid the act. B. while acting within the course of their own discretion but only if the corporation has failed to instruct the employee to avoid the act. C. while acting within the scope of their employment. D. while acting within the course of their own discretion.
C
A freeze-out: A. occurs when majority shareholders are excluded from key management decisions. B. can be reversed in court. C. results in the minority shareholder having little or no influence in important corporate issues such as reduction or elimination of dividends or loss of employment. D. None of these choices are correct.
C
A stock split is: A. not an increase in the number of shares outstanding. B. not a change in par value. C. not a dividend. D. not allowed without a vote of the shareholders, even in instances in which the articles of incorporation authorize a share split.
C
After retiring from Jones Corporation (a partnership founded by Megan Jones and other partners), Megan grew tired of staying at home and started visiting the firm's place of business. The current partners would introduce her to prospective customers as "My partner, Ms. Jones," or "Our partner, Ms. Jones." Megan did not bother to correct anybody about this. She was introduced in this manner to Tiffany, a new customer. Relying on the belief that Megan was a partner, Tiffany entered into a contract with Jones Corporation. Which of the following is true regarding Megan's liability to Tiffany if Jones Corporation does not fulfill its obligations? A. Megan will not be liable as she has withdrawn from the partnership by retiring and is no longer an actual partner. B. Megan will be liable, since the Revised Uniform Partnership Act (RUPA) mandates the perpetual (in other words, lifelong) liability of partners. C. Megan will
C
An S corporation may not have: A. more than 75 shareholders. B. more than 1,500 shareholders. C. more than 100 shareholders. D. more than 7,500 shareholders.
C
In a deed of trust transaction, when a trustee sells the property and the proceeds generate a deficiency, the _____. A. lender may sue the trustee B. trustee may sue the borrower C. lender may sue the borrower on the debt and recover judgment D. borrower is relieved of all obligations to the lender
C
In the course of her employment, Deborah, vice president of "Garden Hoses, Ltd.", received information about a new product that would revolutionize the garden hose industry. Deborah purchased the rights to the new technology personally and offered to sell it to Garden Hoses, Ltd. Garden Hoses, Ltd. would have been interested in and able to purchase the new product, but Deborah decided that she got to it first and that she had the right to assert dominion over the opportunity. Deborah is guilty of: A. Self-dealing. B. Nothing. C. Usurping a corporate opportunity. D. Insider trading.
C
Jen is a shareholder in Acme Corp. who did not receive proper notice of Acme's shareholders' meeting in June, but heard about it from her friend Sid. If Jen attends the meeting only to object to the holding of the meeting: A. she is not entitled to attend if she did not get notice. B. she has automatically waived the notice requirement. C. she has not waived notice. D. she waives her right to vote at the meeting.
C
Mark, a director of ABC Corporation who also owned a business selling office equipment, wanted to sell a new copier to ABC Corporation. Mark made full disclosure of his interests to the full board, and the disinterested members of the board approved the sale of the copier by Mark to ABC Corporation. Under the MBCA, which of the following is true regarding the transaction? A. After proper approval by the board of directors or shareholders, the burden of establishing unfairness remains on the self-dealing director. B. As a matter of law, the transaction is deemed permissible and no future action may be taken against the self-dealing director based on the transaction. C. After proper approval by the board of directors or shareholders, the burden of establishing unfairness shifts to the corporation. D. The approval of the board is merely a formality and has no effect on the validity of the transaction.
C
Martin, Norris, and Olsen (MNO) was a partnership that contracted for and performed a variety of painting jobs. Before the partnership was dissolved, MNO had entered into a contract under which MNO was supposed to paint every room in the state capitol building. At the time of the partnership dissolution, MNO had not yet performed the work called for by this contract. If the partners involved in the winding up elect to perform the contract, they _____. A. do not have the authority to enter into new contracts with subcontractors, material suppliers, and workers and hence cannot borrow money in order to complete these contracts B. are automatically entitled to a wage or salary in addition to their partnership interest C. have the authority to enter into new contracts with subcontractors, material suppliers, and workers D. have breached the procedural requirements for winding up a partnership as set forth by the Revised
C
People who contract to furnish labor or materials to improve real estate _____. A. cannot foreclose their lien on the property. B. can claim a lien on the property regardless of statutory requirements C. can claim a lien on the property until they are paid D. cannot claim any lien on the property.
C
Sally received a stock dividend from an insolvent corporation in which she owned several shares. Unaware of the corporation's insolvency, Sally cashed the check. Because the corporation was insolvent at the time of payment, the dividend was paid illegally. What liability does Sally incur for the dividend? A. Sally is not liable for the dividend because she was unaware of the corporation's insolvency. B. Sally is not liable for the dividend because she was unaware the dividend was illegal. C. Sally is liable for the dividend because the corporation was insolvent at the time of payment. D. Sally is liable for the dividend simply because she is a stockholder.
C
Stock dividends: A. must be distributed in any year in which a corporation shows a profit. B. must be voted on by the shareholders. C. must be voted on by the board. D. must be voted on by the officers.
C
The unsecured credit transaction involves _____ the creditor. A. a minimum of risk to B. the strict liability of C. a maximum of risk to D. state statutory liability of
C
What are the three (3) basic contract devices for using real estate as security for an obligation? A. The deed of trust, the general warranty deed, and the quitclaim deed B. The real estate mortgage, the deed of trust, and the Uniform Commercial Code (UCC) Article 9 financing statement C. The real estate mortgage, the deed of trust, and the land contract D. The real estate mortgage, the general warranty deed, and the UCC Article 9 financing statement
C
Which of the following is a taxable entity? A. Limited Partnership B. Partnership C. Corporation D. Sole Proprietorship
C
Which of the following is false regarding shareholder voting? A. Dividing directors into three classes, one class to be elected each year, makes it more difficult for minority shareholders to attain representation on the board. B. The purpose of cumulative voting is to give minority shareholders an opportunity to be represented on the board. C. Most large publicly held corporations are incorporated in states requiring businesses incorporated in them to permit shareholders to cumulate their votes for directors. D. Most corporations elect directors on the basis that each share is entitled to one vote for each director.
C
Which of the following is the primary law governing security interests in personal property? A. Article 7 of the UCC B. Article 2 of the UCC C. Article 9 of the UCC D. Article 2A of the UCC
C
Which of the following is true regarding making a choice as to the appropriate form of business organization? A. In starting a small business, financing a corporation will be easier than financing a partnership or an individual proprietorship. B. Factors generally point to a corporation as the best form of business. C. Once it is formed a partnership may later be changed to a corporate form of business. D. It is unlikely that there would be adverse tax consequences involved in liquidating a corporation.
C
Which of the following is true regarding partner liability to creditors in the continuation of a partnership? A. Withdrawing partners are liable for new obligations even if they have given adequate notice of withdrawal. B. Continuing partners are the only individuals liable for prior obligations. C. New partners are liable for prior obligations only to extent of their contribution unless they agree to greater liability. D. Withdrawing partners are liable for prior obligations even if they are released by novation.
C
Which of the following is typically NOT subject to unlimited personal liability? A. sole proprietors. B. partners in a general partnership. C. corporate shareholders. D. general partners in a limited partnership.
C
Which of the following statements is true concerning franchises? A. The term of the franchise contract must be at least 5 years. B. Under federal law, the franchise contract must contain an assurance of the right to renew. C. Federal and state governments regulate the franchise relationship. D. Franchising is limited to the continental U.S.
C
An employee of Hamid's Auto Repair Services, Inc. (Hamid's) went to Horner's home to repair Horner's car, and the car was successfully repaired. When Horner defaulted on the bill, Hamid's employee went to Horner's house to take possession of the car, claiming that Hamid's had a lien on the car by virtue of the work performed on it. Which of the following is true in this case? A. The employee is entitled to the possession of the car because he was the one who performed the repairs on the car. B. Hamid's employee was justified in his actions, since Hamid's did have a lien on the car by virtue of the work performed on the car by its employee. C. Hamid's does not have a lien on the car because the employee did not notify Horner at the time of the repairs that a lien would be asserted. D. Hamid's does not have a lien on the car because its employee came to Horner's house to make the repairs; accordingly, Horner never gav
D
Back in Style Fashions is a partnership firm dealing in the manufacture of casual clothes. Raul, one of the partners, thinks the firm should liquidate its current clothing inventory before the end of the calendar year. For this purpose, Raul _____. A. has the express authority to act B. must have the unanimous agreement of only the senior partners C. must have his decision ratified by two (2) or more partners D. must have the unanimous agreement of all the partners
D
Linda and David borrowed $10,000 from the Smart Loan Company (Smart Loan) and executed a mortgage on their home to Smart Loan as security for the note. Smart Loan did not record the mortgage. If Linda and David sell their home to Sheila, and Sheila is not aware of the mortgage, then the mortgage is _____. A. valid for future creditors only B. as valid for Sheila as it is for Linda and David C. invalid for all parties D. not valid against Sheila
D
Long-term secured debt instruments are called: A. notes. B. debentures. C. warrants. D. bonds.
D
Mary eats at ABC Franchise Co., a fast food restaurant, and gets food poisoning. Once she recovers, she wants to sue. She discovers, however, that ABC Franchise Co., has very few assets and little money. She really wants to sue Big Franchise Co., the company that granted the franchise to ABC Franchise Co. Which of the following is true regarding her position in regard to Big Franchise Co.? A. Big Franchise Co. is automatically liable for the torts of the entity to whom it sold a franchise, so Mary merely needs to sue Big Franchise Co. along with ABC Franchise Co. B. Mary may be able to establish strict liability on the part of Big Franchise Co. if she can show that many of the franchises sold by Big Franchise Co. had problems with food poisoning in regard to consumers. C. Big Franchise Co. cannot be held liable for the torts of the entity to whom it sold a franchise, so Mary should abandon the idea of holding Big Fr
D
Short term debt instruments are referred to as: A. Options B. Warrants C. Bonds D. Notes
D
The secretary, treasurer and president are examples of: A. licensors. B. directors. C. promoters. D. officers.
D
Under the common law, airlines are entitled to liens to secure the reasonable value of the services they perform because they _____. A. provide food and lodging to their customers B. make all their profits only through such liens C. provide labor to improve personal property that belongs to someone else D. are required by law to provide the service to anyone who seeks it
D
What was the result in Trinity Wall Street v. Wal-Mart Stores, the case in the text in which an Episcopal parish sued to require Wal-Mart to include in proxy materials a shareholder proposal seeking that Wal-Mart's Board of Directors be required to develop and implement standards for management to use in deciding whether to sell a product that endangers public safety, has substantial potential to impair the reputation of Wal-Mart and/or would reasonably be considered by many to be offensive to the family and community values integral to Wal-Mart's promotion of its brand? A. The court ruled in favor of the plaintiff and required the inclusion of the shareholder proposal in proxy materials because the issue was directly aimed at improving corporate governance. B. The court ruled in favor of the plaintiff and required the inclusion of the shareholder proposal in proxy materials because the matter was integral to the co
D
Which of the following decides when to declare corporate dividends? A. Shareholders B. Officers C. IRS D. Board of Directors
D
Which of the following is true regarding a partnership? A. The RUPA does not permit corporations to qualify as persons that can form a partnership. B. The Revised Uniform Partnership Act (RUPA) does not permit partnerships to qualify as persons that can form a partnership. C. It involves one (1) or more persons who seek to carry on a business for a profit. D. One can engage unwittingly in behavior that gives rise to the creation of a partnership.
D
Which of the following is true regarding the common law as it relates to artisans, innkeepers, and common carriers? A. The innkeeper is not allowed to claim a lien on the guest's property brought to the hotel or inn. B. The innkeeper and common carrier are in business to serve the public but are not required by law to do so. C. They are not entitled to liens to secure the reasonable value of the services they performed. D. An artisan who makes an improvement on property may retain possession of it until he is paid.
D
Which of the following is true regarding the foreclosure of liens? A. The lienholder cannot have the property sold at a judicial sale. B. The lienholder need not give notice to the debtor for holding a sale of the possessed goods. C. The lienholder need not bring a lawsuit against the debtor if there is no statutory procedure. D. The right of a lienholder to possess goods does not automatically give the lienholder the right to sell the property.
D
Zach, Khalid, and Ira form a partnership. Zach's capital contribution to the firm is $5,000, while Khalid and Ira contribute $10,000 each. The parties do not make any express agreement concerning how profits are to be divided. However, they agree to share losses as follows: Zach, 40%, Khalid and Ira, 30% each. During the first year of the partnership, the business makes a profit of $30,000. Given this scenario, what is Zach's share of the profit? A. $9,000 B. $5,000 C. $12,000 D. $10,000
D
