Question 1

In a closely held corporation,which of the following lawsuits is likely to be brought by a minority shareholder on behalf of a corporation if the majority is acting illegally or oppresses the rights of the minority shareholders?

Accepted Answer

A)  a derivative suit 
B)  a preemption suit 
C)  a petit suit 
D)  a dissolution suit 
E)  a termination suit

Question 2

Steve has been asked to join a partnership.What must Steve consider when choosing to become a general or limited partner?

Accepted Answer

The answer of Steve has been asked to join a...

Question 3

What are some of the significant factors to consider when choosing a form of business?

Accepted Answer

The answer of What are some of the significant factors...

Question 4

When organizations are owned by only a few persons,they are said to be ______.

Accepted Answer

A)  publicly held 
B)  legally held 
C)  closely held 
D)  openly held 
E)  overtly held

Question 5

What is key to a partnership's existence?

Accepted Answer

The answer of What is key to a partnership's existence?...

Question 6

What are the drawbacks of the corporate form of organization?

Accepted Answer

The answer of What are the drawbacks of the corporate...

Question 7

List the actions by a limited partner that are not considered participation in management.

Accepted Answer

The answer of List the actions by a limited partner...

Question 8

How can business organizations be classified based on the number of persons who own them? Give one example of each.

Accepted Answer

The answer of How can business organizations be classified based...

Question 9

Despite the advantages,there is some concern that the overuse of deferred prosecution agreements could

Accepted Answer

A)  restrict the rights of minority shareholders in limited liability companies. 
B)  reduce the attractiveness of forming a limited liability partnership. 
C)  reduce the number of sole proprietorships formed in the country. 
D)  lead to an environment where corporations are treated unfairly. 
E)  lead to an overly lenient environment for addressing corporate malfeasance.

Question 10

Which of the following has a perpetual existence so long as the number of shareholders is limited?

Accepted Answer

A)  limited partnership 
B)  partnership 
C)  limited liability company 
D)  sole proprietorship 
E)  S corporation

Question 11

The creation of a(n)______ is automatic based on business conduct and is modified by agreement.

Accepted Answer

A)  limited partnership 
B)  corporation 
C)  partnership 
D)  sole proprietorship 
E)  S corporation

Question 12

Which of the following forms of organization is most easily formed at minimal costs?

Accepted Answer

A)  limited liability partnership 
B)  partnership 
C)  corporation 
D)  S corporation 
E)  limited liability company

Question 13

In a closely held corporation,the majority shareholders

Accepted Answer

A)  have no influence on management. 
B)  can control election of a board of directors. 
C)  cannot be employed by the corporation. 
D)  have the same impact on policy as minority stockholders. 
E)  bring derivative suits on behalf of the corporation.

Question 14

In a limited liability company,the transferability of a member's interest

Accepted Answer

A)  is restricted in the fashion of a partner. 
B)  is not subject to any restrictions. 
C)  depends on the number of shareholders in the company. 
D)  depends on the profitability of the company. 
E)  is similar to the free transferability of a corporate shareholder.

Question 15

In the context of the continuity of limited liability companies (LLCs),which of the following statements is true?

Accepted Answer

A)  Membership in LLCs is limited to individuals. 
B)  In an LLC, a business organization can be an owner. 
C)  An LLC dissolves when the number of shareholders falls below 100. 
D)  LLCs cannot be dissolved unless the owner of the LLC dies. 
E)  In an LLC, only the government can dictate when the company can be dissolved.

Question 16

A business is likely to shift away from the proprietorship form as it becomes more successful.

Accepted Answer

A) True 
 B)False

Question 17

To what extent are partners in a general partnership liable for an organization's debts?

Accepted Answer

The answer of To what extent are partners in a...

Question 18

Why are general partnerships considered to be easily dissolvable?

Accepted Answer

The answer of Why are general partnerships considered to be...

Question 19

The ______,by which the corporate veil can be pierced,may also be used to impose personal liability upon corporate officers,directors,and stockholders.

Accepted Answer

A)  alter-ego theory 
B)  negligent conduct theory 
C)  Med-Arb theory 
D)  corporate envelopment theory 
E)  corporate doppelganger theory

Question 20

In a(n)______,the shareholders are taxed only on income distributed.

Accepted Answer

A)  limited partnership 
B)  corporation 
C)  limited liability company 
D)  sole proprietorship 
E)  S corporation

Exam 14: Business Organizations