Question 1

Corporations have existed for centuries, but the modern "liberal" general incorporation statutes were first passed in:

Accepted Answer

A)  the late 1700s 
B)  the 1930s 
C)  the 1950s 
D)  the 1960s 
E)  none of the other choices 
A)  the late 1700s 
B)  the 1930s 
C)  the 1950s 
D)  the 1960s 
E)  none of the other choices

Question 2

Proprietorships are generally expected to follow the accounting guidelines set out in the Uniform Proprietorship Act.

Accepted Answer

A) True 
 B)False

Question 3

The offering circular that franchisors are required to produce contains information about the background and experience of the executives of the franchise firm.

Accepted Answer

A) True 
 B)False

Question 4

Due to the conflict of interest, in publicly held companies, directors of a corporation may not own shares of stock in the company.

Accepted Answer

A) True 
 B)False

Question 5

The corporate bylaws are the rules that regulate the internal structure of a corporation.

Accepted Answer

A) True 
 B)False

Question 6

Refer to Fact Pattern 13-1. Jeanette decides to form a corporation. She needs to:

Accepted Answer

A)  apply for permission from the Federal Trade Commission 
B)  apply for permission from the Department of Commerce to pursue an incorporation 
C)  create and file articles of incorporation with the proper state official 
D)  apply for permission from the Federal Trade Commission and create and file articles of incorporation with the proper state official 
E)  apply for permission from the Department of Commerce to pursue an incorporation and create and file articles of incorporation with the proper state official 
A)  apply for permission from the Federal Trade Commission 
B)  apply for permission from the Department of Commerce to pursue an incorporation 
C)  create and file articles of incorporation with the proper state official 
D)  apply for permission from the Federal Trade Commission and create and file articles of incorporation with the proper state official 
E)  apply for permission from the Department of Commerce to pursue an incorporation and create and file articles of incorporation with the proper state official

Question 7

Shareholders may usually grant their proxy for another party to vote on corporate matters on their behalf.

Accepted Answer

A) True 
 B)False

Question 8

Under the Uniform Limited Partnership Act, a written partnership agreement must include:

Accepted Answer

A)  the name of the business 
B)  the type or character of the business 
C)  the contributions of each partner 
D)  the name of the business and the type or character of the business 
E)  the name of the business and the type or character of the business and the contributions of each partner 
A)  the name of the business 
B)  the type or character of the business 
C)  the contributions of each partner 
D)  the name of the business and the type or character of the business 
E)  the name of the business and the type or character of the business and the contributions of each partner

Question 9

The governing committee of a corporation is the:

Accepted Answer

A)  board of presidents 
B)  president 
C)  board of managers 
D)  board of shareholders 
E)  none of the other choices are correct 
A)  board of presidents 
B)  president 
C)  board of managers 
D)  board of shareholders 
E)  none of the other choices are correct

Question 10

Which of the following is included in the business format category of franchises:

Accepted Answer

A)  restaurants 
B)  nonfood retailers 
C)  business services 
D)  rental companies 
E)  all of the other specific choices are correct 
A)  restaurants 
B)  nonfood retailers 
C)  business services 
D)  rental companies 
E)  all of the other specific choices are correct

Question 11

In a limited partnership the ____ are investors who may not participate in managing the business.

Accepted Answer

A)  restricted partners 
B)  general partners 
C)  investment partners 
D)  nonvoting partners 
E)  none of the other choices are correct 
A)  restricted partners 
B)  general partners 
C)  investment partners 
D)  nonvoting partners 
E)  none of the other choices are correct

Question 12

Parent franchise companies may limit the territory in which a franchisee operates.

Accepted Answer

A) True 
 B)False

Question 13

In Storetrax.com v. Gurland, where Gurland, founder and president of Storetrax, was fired, the appeals court held that the founder of a company cannot be dismissed.

Accepted Answer

A) True 
 B)False

Question 14

The dissolution of a partnership may occur:

Accepted Answer

A)  if a partner is found to be bankrupt 
B)  if the business of the partnership is made unlawful 
C)  if a partner dies 
D)  if a partner is found to be bankrupt or if a partner dies 
E)  if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful 
A)  if a partner is found to be bankrupt 
B)  if the business of the partnership is made unlawful 
C)  if a partner dies 
D)  if a partner is found to be bankrupt or if a partner dies 
E)  if a partner is found to be bankrupt or if a partner dies or if the business of the partnership is made unlawful

Question 15

Corporations are legal entities that are due all of the same constitutional protections due to real persons.

Accepted Answer

A) True 
 B)False

Question 16

The process of settling the accounts and liquidating the assets of a corporation is called:

Accepted Answer

A)  termination 
B)  certification 
C)  transference 
D)  dissolution 
E)  none of the other choices 
A)  termination 
B)  certification 
C)  transference 
D)  dissolution 
E)  none of the other choices

Question 17

Shareholders have a limited right to inspect the books and records of the corporation.

Accepted Answer

A) True 
 B)False

Question 18

In In re 1545 Ocean Avenue, LLC, when the members of an LLC got into a dispute they had the right to force an end to the existence of the entity.

Accepted Answer

A) True 
 B)False

Question 19

Shareholders liability is limited to the extent of investment in stock in the corporation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a right of a limited partner in a limited partnership:

Accepted Answer

A)  the right to see the partnership books 
B)  the right to participate in the dissolution of the business 
C)  the right to take an active role in managing the business 
D)  both a and b are rights of a limited partner 
E)  none of the other specific choices are rights of a limited partner 
A)  the right to see the partnership books 
B)  the right to participate in the dissolution of the business 
C)  the right to take an active role in managing the business 
D)  both a and b are rights of a limited partner 
E)  none of the other specific choices are rights of a limited partner

Exam 12: Business Organizations

Corporations have existed for centuries, but the modern "liberal" general incorporation statutes were first passed in:

Proprietorships are generally expected to follow the accounting guidelines set out in the Uniform Proprietorship Act.

The offering circular that franchisors are required to produce contains information about the background and experience of the executives of the franchise firm.

Due to the conflict of interest, in publicly held companies, directors of a corporation may not own shares of stock in the company.

The corporate bylaws are the rules that regulate the internal structure of a corporation.

Refer to Fact Pattern 13-1. Jeanette decides to form a corporation. She needs to:

Shareholders may usually grant their proxy for another party to vote on corporate matters on their behalf.

Under the Uniform Limited Partnership Act, a written partnership agreement must include:

The governing committee of a corporation is the:

Which of the following is included in the business format category of franchises:

In a limited partnership the ____ are investors who may not participate in managing the business.

Parent franchise companies may limit the territory in which a franchisee operates.

In Storetrax.com v. Gurland, where Gurland, founder and president of Storetrax, was fired, the appeals court held that the founder of a company cannot be dismissed.

The dissolution of a partnership may occur:

Corporations are legal entities that are due all of the same constitutional protections due to real persons.

The process of settling the accounts and liquidating the assets of a corporation is called:

Shareholders have a limited right to inspect the books and records of the corporation.

In In re 1545 Ocean Avenue, LLC, when the members of an LLC got into a dispute they had the right to force an end to the existence of the entity.

Shareholders liability is limited to the extent of investment in stock in the corporation.

Which of the following is a right of a limited partner in a limited partnership:

Todays Business Environment: Law and Ethics

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The Constitution: Focus on Application to Business

Criminal Law and Business

Elements of Torts

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Real and Personal Property

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Contracts

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Negotiable Instruments, Credit, and Bankruptcy

Agency and the Employment Relationship

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The Regulatory Process

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