final for biz law
The primary document needed to incorporate a business is the Articles of Incorporation because the articles serve as a primary source of authority for the firm's organization and functions.
True
When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosedprincipal is liable to the third party
True
The Sole Proprietor liability issues are:
Contracts and Torts
Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act.
F
If a Member of a limited liability company dissociates from the firm, the other Members can continue the firm's business, and the dissociated member will become an agent for the firm.
F
In a limited partnership, a general Partner assumes no liability for partnership debts beyond the amount of capital contributed.
F
Kay and Leo form Metro Delivery Inc. Responsibility for all day-to-day decisions necessary for the operation of corporate business rests with Metro's
the officers
Like a Sole Proprietorship or a General Partnership, the Members of a limited liability company have unlimited liability for the firm's debts
F
The agent must maintain separate accounts for the principal's funds and for the agent's personal funds, but may intermingle these accounts.
F
Because corporate officers have the implied power to bind the firm in matters directly connected to its business, there is no limit to what the officer can do.
False
Corporate ByLaws and resolutions of the corporation's Board of Directors provide guidelines but cannotgrant or restrict corporate powers.
False
In an agency relationship, one party called the Principal agrees to represent or act for another called the Agent.
False
Once an offer is made, the offeror cannot revoke it
False
In effect, a counteroffer converts the original offeror into an offeree with the power of acceptance.
True
Burgers & Brew Inc. prepares its Articles of Incorporation. The articles are likely to include
All of the Above
Alex, Bill, and Charles want to limit their liability in business transaction. They chose to created a limited liability company. The document they must file with the Secretary of State is:
Article of Organization
A Partner always has the right to dissociate from the partnership.
F
A Sole Proprietor business entity is the safest form of business ownership because the Owner can receive all liability issues.
F
A Sole Proprietor must register Article of Sole Proprietorship with the Secretary of State.
F
A check is an informal contract
F
A limited liability company is an aggregate of its members, not a separate legal entity.
F
Among three Partners, unless they agree otherwise, unanimous consent is required to manage the business of the partnership.
F
Any contract that is not in writing is unenforceable
F
Jana and Kwan are partners in Lawyers LLP, a limited liability partnership. Jana supervises the firm's associate Milo, who negligently fails to appear in court on behalf of Norm, a client. Liability to Norm rests only with
Jana and Milo
Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on
Miklos's death or incapacity
Bayard organized, and owns and operates, Cypress Tours in the simplest form of business organization. This is
None of the Above
Deb and Eve are partners in Foundations, a construction outfit. Deb manages the business. For this service, unless the partnership agreement states otherwise, she is entitled to pay in proportion to her
None of the Above
Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales business. This business is a:
None of the Above
A limited liability partnership allows professionals to avoid personal liability for the malpractice of other Partners.
T
Contests and lotteries are unilateral contracts
T
Like a Partner in a partnership, the Member of a limited liability company has the power to dissociate from the firm at any time, but may not have the right
T
The Members of a limited liability company should protect their interests by creating a written operating agreement.
T
A corporation is recognized under U.S. law as a person
True
Both parties to an agency relationship have the power and the right to terminate the relationship at any time.
True
Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely:
Void
Resort Gift Shop is operated as a general partnership, with five partners. Shan has a one-third interest in the firm. Each of the other partners has a one-sixth interest. Shan is the senior partner.
a majority of the partners must agree
Luis hires Mieko to act as his Agent to buy Ngoc's Southeast Asian Café. Luis tells Mieko to reveal only that she is buying the restaurant on behalf of a third party, without telling Ngoc who that third party is. Luis is:
a partially disclosed principal
A limited liability company with multiple Members wants to distribute profits to its Members and can avoid "double taxation" by electing to be taxed as:
a partnership
Olivia is a general Partner in the Pacific Trade Consulting Group. In the majority of states, with respect to any partnership obligations that Olivia does not participate-in, know about, or ratify, she would be liable for:
all of the obligations, jointly and severally
Cal, Dex, and Erin agree to be partners in Fajitas & Asscs, splitting the profits equally. Cal contributes 65 percent of the capital. When Fajitas & Asscs. is dissolved, its liabilities are greater than its assets. The losses are paid by
all of the partners in proportion to their shares of the profits
In most situations, with respect to a limited liability company's debts, the firm's members are shielded from
all personal liability
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 relationship is;
an agency by estoppel
Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to the hosts of banquets and other events. In this capacity, Rosario is
an independent contractor
Based on Nan's conduct, Odel reasonably believes that Poppy has the authority to act on Nan's behalf even though Poppy does not have the actual authority to do so. In this circumstance, Poppy has
apparent authority
Ensure Care LLC's owners are Fez and Guan. As a limited liability company, Ensure Care enters into contracts
as a legal entity apart from its owners
Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot. The discount is legally sufficient consideration
because it is a promise of something of value
Kay and Leo form Metro Delivery Inc. Responsibility for all policymaking decisions necessary to the management of corporate affairs rests with Metro's
board of directors
Pavers Inc. contracts with a QuikStop store to repave the store's parking lot for a certain price. To be enforceable, this contract must include an element of
consideration
Bread Company hires Craig to sell the company's products in a certain area. Bread agrees to pay Craig a salary, plus commission, for a trial period.
control over the details of the work.
Ben is a director of Creation Corporation, an architectural firm. Without informing Creation, Ben goes into business with Design, Inc., a Creation competitor. Ben is liable for breach of
the duty of loyalty.
Paul is a director on the board of Quality Tire Corporation. As a director, Paul may not
engage in day-to-day business deals
Cheri drives into Domestic Auto Service and asks to have a tire replaced on her car. After Domestic replaces the tire, but before Cheri pays for it, any contract between them is
executory
Brad is a shareholder of Cloud Servers Inc. He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to
exercise actual control over the corporation
Romero employs Supply Procurement Service as an agent under a written agreement that describes the rights and duties of both parties. This is
express authority.
In a limited partnership, every Partner (Limited, and General) has full responsibility for the management of the partnership and its obligations.
f
A Personal Guarantee is the best contract for a business owner to sign for the business.
false
A Sole Proprietor business entity the safest form of business ownership because the Owner can address all liability issues.
false
A limited liability company is an aggregate of its members, not a separate legal entity.
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 sole proprietor's only concerned is about contract liability.
false
A sole proprietorship is the best business entity to create.
false
An independent contractor is, by definition, an employee of the Principal.
false
Because corporate officers have the implied power to bind the firm in matters directly connected to its business, there is no limit to what the officer can do.
false
Because the management of a close corporation can resemble that of a Sole Proprietorship, the corporate management need not meet all of the specific requirements set forth in state statutes for corporations.
false
Consideration must always be evidenced by cash or money.
false
Corporate bylaws and resolutions of the corporation's board of directors provide guidelines but cannotgrant or restrict corporate powers.
false
If a party is already bound by contract to perform a certain duty, that duty can serve as consideration for a second contract.
false
In a limited partnership, every partner has full responsibility for the management of the partnership and its obligations.
false
In a limited partnership, every partner has full responsibility for the management of the partnership business deals and its obligations.
false
Like the partners in a partnership, the shareholders in a corporation cannot change or transfer out without affecting the continued existence of the firm.
false
The Agent must maintain separate accounts for the principal's funds and for the Agent's personal funds, this is called the Duty of Performance
false
The primary document needed to incorporate a business is the Articles of Organization because the articles serve as a primary source of authority for the firm's organization and functions.
false
To complete Agreement, there must be an Offer and consideration
false
Using an agent provides benefits to a principal, but cannot result in liability imposed on the principal.
false
When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosedprincipal is not liable to the third party
false
When there is no formal, written partnership agreement, an agreement to form a partnership is unenforceable.
false
Larry is an agent for Mary. She gives him clear instructions to enter into contracts on her behalf only on Mondays, Wednesdays, or Fridays. He enters into a contract on her behalf on Tuesday. Larry has breached
the duty of obedience
Peter authorizes Adam to buy a certain number of sheep for Peter's Animal Farm. Adam makes a purchase deal with Thomas for the herd of sheep. Neither Peter nor Adam pays the purchase price. Thomas sues Adam for breach of Contract. Adams's right to hold Peter liable for any damages is the right to
indemnification
Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump
is the consideration that creates Kim's obligation to pay Leo
Grape Vineyards LLC, the Members of which include Howie and Ilya, can hold title to property because as a limited liability company the firm is
legal person.
Data Analytics LLC is a limited liability company. Unless the company's Operating Agreement specify otherwise, it will most likely be assumed that the company is:
member-managed
Singh, a member of Trucking LLC, ceases to be associated in the carrying on of the business of the firm. Despite the dissociation . . . .
the member's duty of care continues with respect to prior events
Domestic Gas Company offers to sell Energy Ltd. a certain quantity of liquefied natural gas. If Energy sends an acceptance via Domestic's authorized mode of communication, it will be effective when it is
sent
Doris wants to form a new firm—eBeats—to market a new app. Fees are required to form all of the following business organizations except
sole proprietorships
Kelly offers to sell a certain used forklift to Lumber Outlet, but Kelly dies before Lumber accepts. Most likely, Kelly's death
terminates the offer
Bob claims that Carla breached their contract for tutoring. Carla responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to
the Objective Theory of contracts
Paper & Scissors Inc. wants to incorporate. The primary document needed to incorporate a business is
the articles of incorporation
Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects. Fred secretly buys some of the property and sells it to Energy at a profit. Fred has breached
the duty of loyalty
Rex contracts with Spicy Pizza to deliver its products. After the deal has been partially performed, both parties inform each other that they would like to cancel the contract. Rex and Spicy may rescind
their contract to the extent that it is executory
Dain is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Dain is liable for the debts
to the extent of his capital contribution to the firm
Apparent authority in an agency relationship arises when the principal causes the a 3rd party to reasonably believe that the Agent has the authority to act.
true
As in a partnership, a limited liability company may pay no taxes—profits can be passed through to the members, who pay personal taxes on the profits
true
Consideration is the value given in return for a promise or performance in a contractual agreement.
true
If one party to a contract has fully performed but the other has not, the contract is executory.
true
In many instances, Agency law governs the relationships among partners.
true
The management of a limited liability company must include at least one of the Members or a Manager.
true
The offeree must accept the offer without adding or changing any terms.
true
When a member of a limited liability company personally guarantees payment of a loan to the firm, the member is personally liable for the obligation.
true
Del owns Everlast Painting, a sole proprietorship. Del's liability is
unlimited
