Question 1

Principle factors influencing the choice of business organizational form include whether the firm will likely choose to exercise its power of condemnation.

Accepted Answer

A) True 
 B)False  False

Question 2

Discuss the items included in partnership agreements.

Accepted Answer

The items typically included in partnership agreements are:
a. name and address of the partnership;
b. name and address of the partners;
c. purpose of the partnership;
d. duration of the partnership;
e. amount and type of the investment of each partner (for example, cash, realty, or services);
f. loans to the partnership;
g. how profits and losses are to be shared;
h. management and voting power of each partner;
i. method of settling disputes that should arise;
j. cross-insurance of partners;
k. duties of each partner;
l. how the books are to be set up and maintained;
m. banking arrangements - who has the authority to deposit and withdraw;
n. who has the authority to borrow money in the name of the partnership; and
o. who does the hiring and firing of employees.

Question 3

A business owned by one person, who has complete control over management and profits, is known as a .

Accepted Answer

A)  public corporation 
B)  general partnership 
C)  sole proprietorship 
D)  limited liability company 
A)  public corporation 
B)  general partnership 
C)  sole proprietorship 
D)  limited liability company C

Question 4

The primary law governing limited partnerships is the .

Accepted Answer

A)  Revised Uniform Partnership Act (RUP
A)  
B)  Uniform Partnership Act (UP
A)  
C)  Revised Uniform Limited Partnership Act (RULP
A)  
D)  Revised Limited Partnership Act (RLP
A)  
A)  Revised Uniform Partnership Act (RUP
A)  
B)  Uniform Partnership Act (UP
A)  
C)  Revised Uniform Limited Partnership Act (RULP
A)  
D)  Revised Limited Partnership Act (RLP
A)

Question 5

Which of the following is a fee for advertising and promotional campaigns and administrative costs billed to franchisees either as a flat monthly or annual fee or as a percentage of gross sales?

Accepted Answer

A)  assessment fee 
B)  initial license fee 
C)  royalty fee 
D)  lease fee 
A)  assessment fee 
B)  initial license fee 
C)  royalty fee 
D)  lease fee

Question 6

The is the party in a franchise relationship who sells or distributes goods using the trade name or trademark.

Accepted Answer

A)  franchisee 
B)  franchisor 
C)  delegator 
D)  delegatee 
A)  franchisee 
B)  franchisor 
C)  delegator 
D)  delegatee

Question 7

A franchisee pays a royalty fee for the continued use of a franchisor's trade name, property, and assistance.

Accepted Answer

A) True 
 B)False

Question 8

Explain the duties and rights of partners in a general partnership.

Accepted Answer

The duties among partners are as follows

Question 9

Explain the differences between general partnerships and limited partnerships.

Accepted Answer

The differences between general partners

Question 10

On its "deathbed," a partnership goes through a process called _.

Accepted Answer

A)  dissolution and winding-up 
B)  bankruptcy 
C)  realignment and merger 
D)  foreclosure 
A)  dissolution and winding-up 
B)  bankruptcy 
C)  realignment and merger 
D)  foreclosure

Question 11

A syndicate is an investment group that makes a private agreement to come together for the purpose of financing a large commercial project that the individual members could not finance alone.

Accepted Answer

A) True 
 B)False

Question 12

The Franchise Rule promulgated by the Federal Trade Commission requires a franchisor to disclose all material facts to a franchisee before entering into a franchise agreement.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following pieces of information is required to be disclosed under the Uniform Franchise Offering Circular (UFOC)?

Accepted Answer

A)  the list of competitors within the same industry 
B)  the material terms of the franchise agreement 
C)  the age of all owners of the trademark 
D)  the nationality of all the employees of the franchise 
A)  the list of competitors within the same industry 
B)  the material terms of the franchise agreement 
C)  the age of all owners of the trademark 
D)  the nationality of all the employees of the franchise

Question 14

In a Subchapter S corporation, the owner has complete control over daily management decisions.

Accepted Answer

A) True 
 B)False

Question 15

Sheila and Rob mutually decide to start a business together. Being close friends, they do not enter into a written agreement and agree to split all responsibilities and profits equally. However, Sheila soon finds herself saddled with more than her share of work. She now resents splitting the profits equally since her contribution to the business is more. This has affected Rob and Sheila's friendship. What form of business organization is followed by Rob and Sheila? What should they have done to prevent any misunderstandings between themselves? Can Sheila legally claim a greater share of profits?

Accepted Answer

Sheila and Rob are in a general partners

Question 16

Which of the following is a similarity between general partnerships and limited partnerships?

Accepted Answer

A)  They are created by a contractual agreement between two or more persons. 
B)  Losses are divided equally among the partners. 
C)  The personal liability of all partners is unlimited. 
D)  All partners have an equal role in the management of the organization. 
A)  They are created by a contractual agreement between two or more persons. 
B)  Losses are divided equally among the partners. 
C)  The personal liability of all partners is unlimited. 
D)  All partners have an equal role in the management of the organization.

Question 17

List the advantages and disadvantages of a sole proprietorship over other forms of business organization.

Accepted Answer

The advantages of a sole proprietorship

Question 18

Which of the following is an incorrect statement regarding a syndicate?

Accepted Answer

A)  A syndicate is an investment group. 
B)  A syndicate comes together for the purpose of financing a large commercial project. 
C)  The advantage of a syndicate is that members are not liable to third parties for project failure. 
D)  The advantage of a syndicate is that it can raise large amounts of capital quickly. 
A)  A syndicate is an investment group. 
B)  A syndicate comes together for the purpose of financing a large commercial project. 
C)  The advantage of a syndicate is that members are not liable to third parties for project failure. 
D)  The advantage of a syndicate is that it can raise large amounts of capital quickly.

Question 19

Which of the following is not a principal factor influencing the choice of business organizational form?

Accepted Answer

A)  eminent domain 
B)  ease and expense of formation and operations 
C)  transferability of ownership interests 
D)  projected life of the organization 
A)  eminent domain 
B)  ease and expense of formation and operations 
C)  transferability of ownership interests 
D)  projected life of the organization

Question 20

The Franchising Rule was promulgated by the in 1979.

Accepted Answer

A)  Federal Communications Commission 
B)  Securities and Exchange Commission 
C)  Federal Trade Commission 
D)  Consumer Financial Protection Bureau 
A)  Federal Communications Commission 
B)  Securities and Exchange Commission 
C)  Federal Trade Commission 
D)  Consumer Financial Protection Bureau

Exam 16: Law and Business Associations I

Principle factors influencing the choice of business organizational form include whether the firm will likely choose to exercise its power of condemnation.

Discuss the items included in partnership agreements.

A business owned by one person, who has complete control over management and profits, is known as a .

The primary law governing limited partnerships is the .

Which of the following is a fee for advertising and promotional campaigns and administrative costs billed to franchisees either as a flat monthly or annual fee or as a percentage of gross sales?

The is the party in a franchise relationship who sells or distributes goods using the trade name or trademark.

A franchisee pays a royalty fee for the continued use of a franchisor's trade name, property, and assistance.

Explain the duties and rights of partners in a general partnership.

Explain the differences between general partnerships and limited partnerships.

On its "deathbed," a partnership goes through a process called _.

A syndicate is an investment group that makes a private agreement to come together for the purpose of financing a large commercial project that the individual members could not finance alone.

The Franchise Rule promulgated by the Federal Trade Commission requires a franchisor to disclose all material facts to a franchisee before entering into a franchise agreement.

Which of the following pieces of information is required to be disclosed under the Uniform Franchise Offering Circular (UFOC)?

In a Subchapter S corporation, the owner has complete control over daily management decisions.

Which of the following is a similarity between general partnerships and limited partnerships?

List the advantages and disadvantages of a sole proprietorship over other forms of business organization.

Which of the following is an incorrect statement regarding a syndicate?

Which of the following is not a principal factor influencing the choice of business organizational form?

The Franchising Rule was promulgated by the in 1979.

Critical Thinking and Legal Reasoning

Introduction to Law and the Legal Environment of Business

The American Legal System

Alternative Tools of Dispute Resolution

Constitutional Principles

White-Collar Crime and the Business Community

Ethics, Social Responsibility, and the Business Manager

The International Legal Environment of Business

The Law of Contracts and Sales I

The Law of Contracts and Sales Ii

The Law of Torts

Product and Service Liability Law

Law of Property: Real and Personal

Intellectual Property

Agency Law

Law and Business Associations II

The Law of Administrative Agencies

The Employment Relationship and Immigration Laws

Laws Governing Labor-Management Relations

Employment Discrimination

Environmental Law

Rules Governing the Issuance and Trading of Securities

Antitrust Laws

Laws of Debtor-Creditor Relations and Consumer Protection

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