Exam 19: Forms of Business Organizations.

Which of the following is true regarding the effect of the death of a partner on a general partnership?

An outside director is a director who lives outside the state of incorporation.

When directors on a board serve for a fixed term but are not elected all at once it is known as a(n)__________ board.

A(n)__________ is a for-profit corporation that uses the power of business to solve social and environmental problems.

A partnership requires a minimum amount of capital in order to be formed.

Fact Pattern 19-2 Maxine and Vince verbally agree to form a dog grooming partnership called "XYZ Grooming." They file nothing with the state. Maxine puts up 80% of the capital needed for the partnership, and Vince supplies 20%. Maxine assumed that Vince would do extra work to account for the small amount of capital contributed by him, but that did not occur. Maxine found herself grooming more than 90% of the animals on her own. Maxine told Vince that he was only entitled to 10% of the profits because he was only doing 10% of the work. Vince disagreed, and a heated argument occurred. Not surprisingly, Maxine and Vince decided to end the partnership. While winding up affairs, Maxine discovered that Vince paid an excessive amount for some dog shampoo. She thought he bought it from a certain supplier just so he could flirt with the receptionist there. She told him that paying for the shampoo was entirely his responsibility because she had not agreed to the purchase. Maxine and Vince also became aware of a lawsuit filed by the owner of a Welsh Pembroke Corgi complaining that the dog developed a skin rash following bathing by Vince in the expensive shampoo he had purchased, and that the owner lost money because the dog could not be entered into shows. Maxine told Vince that the litigation was entirely his responsibility and that she disavowed any liability to the plaintiff. -Refer to Fact Pattern 19-2.Which of the following is true regarding Vince's entitlement,if any,to share in profits of the business?

What does the term "reverse piercing" reference in regard to a corporation and its shareholders?

Explain requirements for formation of an S corporation.

C corporations are taxed as a pass-through entity.

A partnership may acquire property in its own name.

In a(n)__________ a stock purchase is financed by debt.

A member of the board who also serves as an officer is a(n)__________ director.

A corporation is a private entity that can be created by a mere handshake,as long as the shareholders have completed a certificate of incorporation.

Cumulative voting allows a greater control by the management interests of a corporation.

In __________ voting,a shareholder can cast one vote for each share the shareholder owns for each nominee whereas in __________ voting,a shareholder may cast all of his or her votes for one nominee or allocate them among the nominees as the shareholder sees fit.

__________ is the simplest and most prevalent form of business enterprise in the U.S.

A(n)__________ is a public offer to all the __________ of a(n)__________ corporation to buy their shares at a stated price,usally __________ than the market price.

Fact Pattern 19-2 Maxine and Vince verbally agree to form a dog grooming partnership called "XYZ Grooming." They file nothing with the state. Maxine puts up 80% of the capital needed for the partnership, and Vince supplies 20%. Maxine assumed that Vince would do extra work to account for the small amount of capital contributed by him, but that did not occur. Maxine found herself grooming more than 90% of the animals on her own. Maxine told Vince that he was only entitled to 10% of the profits because he was only doing 10% of the work. Vince disagreed, and a heated argument occurred. Not surprisingly, Maxine and Vince decided to end the partnership. While winding up affairs, Maxine discovered that Vince paid an excessive amount for some dog shampoo. She thought he bought it from a certain supplier just so he could flirt with the receptionist there. She told him that paying for the shampoo was entirely his responsibility because she had not agreed to the purchase. Maxine and Vince also became aware of a lawsuit filed by the owner of a Welsh Pembroke Corgi complaining that the dog developed a skin rash following bathing by Vince in the expensive shampoo he had purchased, and that the owner lost money because the dog could not be entered into shows. Maxine told Vince that the litigation was entirely his responsibility and that she disavowed any liability to the plaintiff. -Refer to Fact Pattern 19-2.Which of the following is true regarding liability on the lawsuit brought by the Corgi owner?

When a third party,based on all of its transactions with the enterprise,acts as if it were doing business with a corporation,the third party is prevented from claiming that the enterprise is not a corporation because a(n)__________ has been formed.

In what five categories does the Franchise Rule require a franchisor to make material disclosures to prospective franchisees?