Question 1

Shareholders are the owners of a corporation.

Accepted Answer

A) True 
 B)False

Question 2

In Storetrax.com v.Gurland,where Gurland,the founder of Storetrax.com,was removed as president but denied severance pay and sued for that,the appeals court held that he was:

Accepted Answer

A)  not allowed to sue the company because he was on the board of directors
B)  not protected by "safe harbor" because he failed to give the company sufficient notification of the imminence of a lawsuit
C)  protected by "sufficient notification" because he gave the company sufficient notification of the imminence of a lawsuit
D)  not by "sufficient notification" because he failed to give the company sufficient notification of the imminence of a lawsuit
E)  none of the other choices are correctF) A) and B)
G) A) and C)

Question 3

A limited liability company:

Accepted Answer

A)  is chartered by the Securities and Exchange Commission
B)  has the liability of a corporation
C)  is taxed like a corporation
D)  is chartered by the Securities and Exchange Commission and has the liability of a corporation
E)  is taxed like and has the liability of a corporationF) None of the above
G) C) and D)

Question 4

In Ironite Products v.Samuels,where a major shareholder (Samuels) of Ironite sued,contending the bylaws had been violated,the appeals court held that:

Accepted Answer

A)  the bylaws had been violated because the Companies' bylaws did not clearly sanction the Board of Directors to manage the business and affairs of the company
B)  the bylaws had been violated because the Companies' bylaws clearly sanctioned the Board of Directors to manage the business and affairs of the company
C)  the bylaws had not been violated because the Companies' bylaws clearly sanctioned the Board of Directors to manage the business and affairs of the company
D)  the bylaws were never properly approved and so there was no case for violation of bylaws
E)  none of the other choices are correctF) B) and C)
G) A) and E)

Question 5

Unlike a corporation,a limited liability company is:?

Accepted Answer

A)  allowed perpetual life
B)  not allowed perpetual life
C)  allowed to exist for more than five years
D)  not allowed to exist for more than five years
E)  none of the other choices are correctF) A) and B)
G) A) and C)

Question 6

In most states a limited partnership does not have to file what information with the appropriate state official?

Accepted Answer

A)  name of the business
B)  names and addresses of all partners
C)  contributions each partner has made
D)  the share of profits to be paid to each partner
E)  all of the other choices must be filedF) A) and B)
G) A) and C)

Question 7

Shareholders have the right to instruct directors or top managers how to run the corporation.

Accepted Answer

A) True 
 B)False

Question 8

The board of directors of a corporation are elected by:

Accepted Answer

A)  top managers
B)  shareholders
C)  current board members
D)  the president
E)  all of the other choices have equal votesF) B) and D)
G) None of the above

Question 9

The Franchise Rule requires franchisors to produce a detailed disclosure document before any money is paid by franchisees.

Accepted Answer

A) True 
 B)False

Question 10

Coca-Cola,Microsoft and General Motors are all examples of:

Accepted Answer

A)  joint ventures
B)  limited partnerships
C)  legal partnerships
D)  sole proprietorships
E)  none of the other choices are correctF) A) and D)
G) A) and E)

Question 11

Legally,the board of directors is the ____________ of a corporation.

Accepted Answer

A)  principle
B)  leader
C)  principal
D)  judge
E)  ownerF) B) and D)
G) A) and D)

Question 12

The articles of incorporation usually include all of the following except:

Accepted Answer

A)  classes of stock to be issued
B)  address of the corporation
C)  purpose of the business
D)  address of the corporation and the purpose of the business only are included
E)  address of the corporation and the purpose of the business and classes of stock to be issued are includedF) A) and E)
G) B) and C)

Question 13

The _____________ provides "default rules" that determine the operation of partnerships when the partnership agreement is silent or where there is no formal agreement among the partners.

Accepted Answer

A)  Revised Uniform Proprietorship Act
B)  Revised Universal Partnership Act
C)  Revised Real Partnership Act
D)  Revised Unified Partnership Act
E)  none of the other choices are correctF) C) and D)
G) A) and B)

Question 14

Limited liability companies need no formal document to begin operations;an oral agreement can be sufficient.

Accepted Answer

A) True 
 B)False

Question 15

To terminate a partnership,the partners must go through a deconstruction process.

Accepted Answer

A) True 
 B)False

Question 16

In Storetrax.com v.Gurland,where Gurland,the founder of Storetrax.com,was removed as president but denied severance pay and sued for that,the appeals court held that he was:

Accepted Answer

A)  protected by "safe harbor" because he gave the company sufficient notification of the imminence of a lawsuit
B)  not protected by "safe harbor" because he failed to give the company sufficient notification of the imminence of a lawsuit
C)  protected by "sufficient notification" because he gave the company sufficient notification of the imminence of a lawsuit
D)  not by "sufficient notification" because he failed to give the company sufficient notification of the imminence of a lawsuit
E)  not allowed to sue the company because he was on the board of directorsF) B) and E)
G) C) and D)

Question 17

The New York Stock Exchange is an example of a stock exchange where:

Accepted Answer

A)  the stock of sole proprietorships can be traded
B)  the stock of public corporations can be traded
C)  the stock of private corporations can be traded
D)  the stock of public corporations cannot be traded
E)  the stock of public corporations can be sold but not boughtF) B) and E)
G) C) and E)

Question 18

Which of the following are usually included in a written partnership agreement:

Accepted Answer

A)  state law that applies to the partnership
B)  contributions of the partners
C)  limits on transfers of partnership shares
D)  how partnership shares will be valued
E)  all of the other specific choices are usually includedF) B) and E)
G) A) and E)

Question 19

In the final dispersal of the assets of the limited partnership,creditors' rights:

Accepted Answer

A)  do not precede partners' rights
B)  precede partners' rights
C)  are immaterial
D)  precede some precede partners' rights,but not others
E)  only precede general partners' rightsF) B) and D)
G) A) and C)

Question 20

Which of the following statements about a corporation is true? Corporations are not entitled to constitutionally protected:

Accepted Answer

A)  free speech
B)  equal protection
C)  privileges against self-incrimination
D)  freedom from unreasonable searches and seizures
E)  none of the other choices are trueF) B) and C)
G) A) and E)

Exam 13: Business Organizations

Unlike a corporation,a limited liability company is:?

Correct AnswerverifiedShow Answer

Shareholders have the right to instruct directors or top managers how to run the corporation.

Correct AnswerverifiedShow Answer

To terminate a partnership,the partners must go through a deconstruction process.

Correct AnswerverifiedShow Answer

The _____________ provides "default rules" that determine the operation of partnerships when the partnership agreement is silent or where there is no formal agreement among the partners.

Correct AnswerverifiedShow Answer

The board of directors of a corporation are elected by:

Correct AnswerverifiedShow Answer

Which of the following statements about a corporation is true? Corporations are not entitled to constitutionally protected:

Correct AnswerverifiedShow Answer

In the final dispersal of the assets of the limited partnership,creditors' rights:

Correct AnswerverifiedShow Answer

In Storetrax.com v.Gurland,where Gurland,the founder of Storetrax.com,was removed as president but denied severance pay and sued for that,the appeals court held that he was:

Correct AnswerverifiedShow Answer

In most states a limited partnership does not have to file what information with the appropriate state official?

Correct AnswerverifiedShow Answer

Which of the following are usually included in a written partnership agreement:

Correct AnswerverifiedShow Answer

Shareholders are the owners of a corporation.

Correct AnswerverifiedShow Answer

Legally,the board of directors is the ____________ of a corporation.

Correct AnswerverifiedShow Answer

A limited liability company:

Correct AnswerverifiedShow Answer

Limited liability companies need no formal document to begin operations;an oral agreement can be sufficient.

Correct AnswerverifiedShow Answer

The Franchise Rule requires franchisors to produce a detailed disclosure document before any money is paid by franchisees.

Correct AnswerverifiedShow Answer

In Ironite Products v.Samuels,where a major shareholder (Samuels) of Ironite sued,contending the bylaws had been violated,the appeals court held that:

Correct AnswerverifiedShow Answer

In Storetrax.com v.Gurland,where Gurland,the founder of Storetrax.com,was removed as president but denied severance pay and sued for that,the appeals court held that he was:

Correct AnswerverifiedShow Answer

The New York Stock Exchange is an example of a stock exchange where:

Correct AnswerverifiedShow Answer

The articles of incorporation usually include all of the following except:

Correct AnswerverifiedShow Answer

Coca-Cola,Microsoft and General Motors are all examples of:

Correct AnswerverifiedShow Answer

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