Question 1

To create a corporation:

Accepted Answer

A)  articles of incorporation and an application must first be filed with the federal government 
B)  the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states 
C)  the incorporators must hold a public organization meeting, then file articles of incorporation 
D)  the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states, and the incorporators must hold a public organization meeting, then file articles of incorporation 
E)  none of the other choices 
A)  articles of incorporation and an application must first be filed with the federal government 
B)  the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states 
C)  the incorporators must hold a public organization meeting, then file articles of incorporation 
D)  the federal government issues a certificate of incorporation, which must be filed with an application to do business in the relevant states, and the incorporators must hold a public organization meeting, then file articles of incorporation 
E)  none of the other choices

Question 2

In a sole proprietorship, the owner is:

Accepted Answer

A)  the business 
B)  a corporation 
C)  a subsidiary 
D)  a partnership 
E)  none of the other choices 
A)  the business 
B)  a corporation 
C)  a subsidiary 
D)  a partnership 
E)  none of the other choices

Question 3

During the course of a partnership's winding-up process, the partners owe each other:

Accepted Answer

A)  a duty to disclose all finances of the partnership 
B)  a duty to compete fully 
C)  a duty to refrain from termination 
D)  a duty of discounting 
E)  a duty to mitigate 
A)  a duty to disclose all finances of the partnership 
B)  a duty to compete fully 
C)  a duty to refrain from termination 
D)  a duty of discounting 
E)  a duty to mitigate

Question 4

With perpetual existence, the death or retirement of a shareholder:

Accepted Answer

A)  brings about the termination of the corporation if the shareholder had more than a 30% share 
B)  brings about the termination of the corporation 
C)  brings about the termination of the corporation in a five year period 
D)  brings about the termination of the corporation if the shareholder had more than a 10% share 
E)  none of the other choices are correct 
A)  brings about the termination of the corporation if the shareholder had more than a 30% share 
B)  brings about the termination of the corporation 
C)  brings about the termination of the corporation in a five year period 
D)  brings about the termination of the corporation if the shareholder had more than a 10% share 
E)  none of the other choices are correct

Question 5

The Franchise Rule requires that the following information must be provided except:

Accepted Answer

A)  the names and addresses of other franchisees 
B)  an audited financial statement of the franchisor's operation 
C)  the background and experience of all existing franchisees 
D)  the responsibilities that the parties will have to each other under the agreement 
E)  all of the other choices are required 
A)  the names and addresses of other franchisees 
B)  an audited financial statement of the franchisor's operation 
C)  the background and experience of all existing franchisees 
D)  the responsibilities that the parties will have to each other under the agreement 
E)  all of the other choices are required

Question 6

The law specifies that partners owe a fiduciary duty to one another of the highest loyalty.

Accepted Answer

A) True 
 B)False

Question 7

Managers hired to run a corporation owe it a duty of care and loyalty.

Accepted Answer

A) True 
 B)False

Question 8

About 80 percent of business revenues go to corporations.

Accepted Answer

A) True 
 B)False

Question 9

In In re 1545 Ocean Avenue, LCC, where the two managers of a real estate development limited liability company disagreed about the project and one of the managers, King, sued for work to stop and the company to be dissolved, the appeals court reversed the trial court's decision to grant King's requests because:

Accepted Answer

A)  there was not sufficient evidence that the LLC could not effectively operate under the operating agreement 
B)  there was sufficient evidence that the LLC could not effectively operate under the operating agreement 
C)  there was not sufficient evidence that the LLC could effectively operate under the operating agreement 
D)  the operating agreement specified that one manager could not dissolve the LCC 
E)  the operating agreement gave King only a 49% share of power, so he could not dissolve the company 
A)  there was not sufficient evidence that the LLC could not effectively operate under the operating agreement 
B)  there was sufficient evidence that the LLC could not effectively operate under the operating agreement 
C)  there was not sufficient evidence that the LLC could effectively operate under the operating agreement 
D)  the operating agreement specified that one manager could not dissolve the LCC 
E)  the operating agreement gave King only a 49% share of power, so he could not dissolve the company

Question 10

A ____ is an artificial person, or legal entity, created under state law.

Accepted Answer

A)  corporation 
B)  limited partnership 
C)  legal partnership 
D)  sole proprietorship 
E)  business 
A)  corporation 
B)  limited partnership 
C)  legal partnership 
D)  sole proprietorship 
E)  business

Question 11

A ____ is one whose shares are held by one shareholder or a small group of shareholders.

Accepted Answer

A)  close corporation 
B)  small corporation 
C)  limited corporation 
D)  shared corporation 
E)  nonprofit corporation 
A)  close corporation 
B)  small corporation 
C)  limited corporation 
D)  shared corporation 
E)  nonprofit corporation

Question 12

A partnership may be designed to continue even if a partner dies or quits.

Accepted Answer

A) True 
 B)False

Question 13

In Japan small businesses are:

Accepted Answer

A)  greatly favored by the government 
B)  exempt from most taxes 
C)  considered very desirable places to work 
D)  formed at a much faster rate than in the United States 
E)  none of the other choices are correct 
A)  greatly favored by the government 
B)  exempt from most taxes 
C)  considered very desirable places to work 
D)  formed at a much faster rate than in the United States 
E)  none of the other choices are correct

Question 14

Corporations may not be forced to dissolve against the wishes of the board of directors.

Accepted Answer

A) True 
 B)False

Question 15

The franchisee follows the business model set out by the parent company, such as McDonald's in which category of franchise:

Accepted Answer

A)  product distributorship 
B)  trademark or trade-name licensing 
C)  business format franchising 
D)  sale format franchising 
E)  all of the other specific choices are correct 
A)  product distributorship 
B)  trademark or trade-name licensing 
C)  business format franchising 
D)  sale format franchising 
E)  all of the other specific choices are correct

Question 16

In general, a corporation's ____, along with an application, must be filed with the appropriate state office, along with payment of a fee to create a corporation.

Accepted Answer

A)  certificate of incorporation 
B)  proof of funding 
C)  certificate of credit 
D)  needs of incorporation 
E)  none of the other choices are correct 
A)  certificate of incorporation 
B)  proof of funding 
C)  certificate of credit 
D)  needs of incorporation 
E)  none of the other choices are correct

Question 17

The owner of a sole proprietorship:

Accepted Answer

A)  is legally the same as the business 
B)  is taxed the same as the business 
C)  may hire any number of employees 
D)  is legally the same as the business and is taxed the same as the business 
E)  is legally the same as the business and is taxed the same as the business and may hire any number of employees 
A)  is legally the same as the business 
B)  is taxed the same as the business 
C)  may hire any number of employees 
D)  is legally the same as the business and is taxed the same as the business 
E)  is legally the same as the business and is taxed the same as the business and may hire any number of employees

Question 18

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

Accepted Answer

A)  Federal Partnership Act 
B)  Robinson-Patman Act 
C)  Uniform Partnership Act 
D)  Partnership Termination Act 
E)  Partnership Operation Act 
A)  Federal Partnership Act 
B)  Robinson-Patman Act 
C)  Uniform Partnership Act 
D)  Partnership Termination Act 
E)  Partnership Operation Act

Question 19

After reviewing a corporation's application, the state issues a:

Accepted Answer

A)  certificate of business 
B)  certificate of taxes 
C)  certificate of corporation 
D)  certificate of institution 
E)  none of the other choices are correct 
A)  certificate of business 
B)  certificate of taxes 
C)  certificate of corporation 
D)  certificate of institution 
E)  none of the other choices are correct

Question 20

Which of the following occur after the state has issued a corporation its certificate of incorporation:

Accepted Answer

A)  electing a board of directors 
B)  enacting the corporation's bylaws 
C)  issuing the corporation's stock 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct 
A)  electing a board of directors 
B)  enacting the corporation's bylaws 
C)  issuing the corporation's stock 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct

Exam 12: Business Organizations

To create a corporation:

In a sole proprietorship, the owner is:

During the course of a partnership's winding-up process, the partners owe each other:

With perpetual existence, the death or retirement of a shareholder:

The Franchise Rule requires that the following information must be provided except:

The law specifies that partners owe a fiduciary duty to one another of the highest loyalty.

Managers hired to run a corporation owe it a duty of care and loyalty.

About 80 percent of business revenues go to corporations.

A ____ is an artificial person, or legal entity, created under state law.

A ____ is one whose shares are held by one shareholder or a small group of shareholders.

A partnership may be designed to continue even if a partner dies or quits.

In Japan small businesses are:

Corporations may not be forced to dissolve against the wishes of the board of directors.

The franchisee follows the business model set out by the parent company, such as McDonald's in which category of franchise:

In general, a corporation's ____, along with an application, must be filed with the appropriate state office, along with payment of a fee to create a corporation.

The owner of a sole proprietorship:

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

After reviewing a corporation's application, the state issues a:

Which of the following occur after the state has issued a corporation its certificate of incorporation:

Todays Business Environment: Law and Ethics

The Court Systems

Trials and Resolving Disputes

The Constitution: Focus on Application to Business

Criminal Law and Business

Elements of Torts

Business Torts and Product Liability

Real and Personal Property

Intellectual Property

Contracts

Domestic and International Sales

Negotiable Instruments, Credit, and Bankruptcy

Agency and the Employment Relationship

Employment and Labor Regulations

Employment Discrimination

The Regulatory Process

Securities Regulation

Consumer Protection

Antitrust Law

Environmental Law

The International Legal Environment of Business

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