Question 1

A merger requires a board resolution and shareholder approval.

Accepted Answer

A) True 
 B)False

Question 2

Jim Braun has been a partner in a real estate investment partnership with Alicia Kaynes for 10 years.When the real estate market took a downward turn,one of their investments in a strip mall became a cash drain.Jim refused to contribute any more cash and withdrew from the partnership.Alicia was left to manage the property.Before she could sell it,Alicia had put in $125,000 into the strip mall property.Following the sale,Alicia demanded one-half of the $125,000 from Jim.Jim said he is not liable because he left the partnership.

Accepted Answer

A) Jim is correct; he withdrew and his liability ended. 
B) Alicia is correct; Jim owes her his share of what she paid. 
C) Neither is correct; how much Jim owes depends on when he withdrew. 
D) none of the above 
A) Jim is correct; he withdrew and his liability ended. 
B) Alicia is correct; Jim owes her his share of what she paid. 
C) Neither is correct; how much Jim owes depends on when he withdrew. 
D) none of the above

Question 3

Discuss investors' concerns regarding CEO compensation.

Accepted Answer

The main concerns are the following: inc

Question 4

Limited partners have liability:

Accepted Answer

A) for the full amount of partnership debts. 
B) only for the amount of their contribution. 
C) for the negligent acts of the general partner. 
D) none of the above 
A) for the full amount of partnership debts. 
B) only for the amount of their contribution. 
C) for the negligent acts of the general partner. 
D) none of the above

Question 5

Which is the proper order for distribution of assets upon dissolution of a limited partnership?

Accepted Answer

A) outside creditors; distributions owed to partners; capital contributions; remainder split according to distribution agreement 
B) outside creditors; limited partners' profits; limited partners' capital; general partners' advances; general partners' profit; general partners' capital 
C) limited partners' capital; outside creditors; limited partners' advances; general partners' capital and profits 
D) none of the above 
A) outside creditors; distributions owed to partners; capital contributions; remainder split according to distribution agreement 
B) outside creditors; limited partners' profits; limited partners' capital; general partners' advances; general partners' profit; general partners' capital 
C) limited partners' capital; outside creditors; limited partners' advances; general partners' capital and profits 
D) none of the above

Question 6

The directors of Kmart,Inc.voted several years ago to approve a new marketing plan that involved endorsements by Martha Stewart of Kmart home products such as linens,paint and decorations.Marketing studies have shown that Martha Stewart was not the right match for endorsements for Kmart's customer base.Kmart is now in Chapter 11 bankruptcy.Its shareholders believe the Martha Stewart decision was the cause of the company's demise.

Accepted Answer

A) The shareholders have a cause of action against the directors for violation of the business judgment rule. 
B) The shareholders have a cause of action against the directors for violation of the corporate opportunity doctrine. 
C) The shareholders can have the court order the directors removed for cause. 
D) The directors of Kmart are protected under the business judgment rule. 
E) none of the above 
A) The shareholders have a cause of action against the directors for violation of the business judgment rule. 
B) The shareholders have a cause of action against the directors for violation of the corporate opportunity doctrine. 
C) The shareholders can have the court order the directors removed for cause. 
D) The directors of Kmart are protected under the business judgment rule. 
E) none of the above

Question 7

A tenancy in partnership does not carry rights of survivorship.

Accepted Answer

A) True 
 B)False

Question 8

List the provisions of Sarbanes-Oxley that affect corporation governance.

Accepted Answer

The act has provisions on the structure

Question 9

The CEO of Citigroup announced a $8 billion write-down for the company because of bad loans.This announcement followed a previous announcement of a $5 billion write-down three quarters earlier.The board asked him to step down.

Accepted Answer

A) The board does not have the authority to remove a CEO. 
B) The shareholders must approve the removal of a CEO. 
C) The CEO is elected by the shareholders. 
D) none of the above 
A) The board does not have the authority to remove a CEO. 
B) The shareholders must approve the removal of a CEO. 
C) The CEO is elected by the shareholders. 
D) none of the above

Question 10

Piercing the corporate veil has been used for purposes of imposing CERCLA liability.

Accepted Answer

A) True 
 B)False

Question 11

A shareholder proxy is:

Accepted Answer

A) good until revoked. 
B) not subject to any securities laws. 
C) a transfer of a right to vote. 
D) none of the above 
A) good until revoked. 
B) not subject to any securities laws. 
C) a transfer of a right to vote. 
D) none of the above

Question 12

Several retirement funds that own shares in News Corp.,Inc.,have filed suit against Rupert Murdoch,the chairman of the board and CEO of News Corp.,alleging that Mr.Murdoch had the board approve the purchase of his daughter's company for $675 million.Part of the purchase deal included putting Murdoch's daughter on the News Corp.board.Which would be the best theory for recovery by the retirement funds?

Accepted Answer

A) Insider trading 
B) Violation of the corporate opportunity doctrine 
C) Violation of the business judgment rule 
D) Breach of fiduciary duty 
A) Insider trading 
B) Violation of the corporate opportunity doctrine 
C) Violation of the business judgment rule 
D) Breach of fiduciary duty

Question 13

A copy of the voting trust must be on file in the corporate records.

Accepted Answer

A) True 
 B)False

Question 14

Unanimous consent of the partners is required for:

Accepted Answer

A) confession of a judgment. 
B) borrowing money in a trading partnership. 
C) signing checks. 
D) none of the above 
A) confession of a judgment. 
B) borrowing money in a trading partnership. 
C) signing checks. 
D) none of the above

Question 15

The corporate veil liability theory has been applied in situations that involve environmental clean-up issues.

Accepted Answer

A) True 
 B)False

Question 16

What conduct will cost a limited partner his/her limited liability status?

Accepted Answer

A) engaging in the management of the business 
B) allowing his/her name to be used in the business name 
C) failure to file the limited partnership agreement 
D) All of the above will result in a loss of limited liability status. 
A) engaging in the management of the business 
B) allowing his/her name to be used in the business name 
C) failure to file the limited partnership agreement 
D) All of the above will result in a loss of limited liability status.

Question 17

Partners' personal assets:

Accepted Answer

A) cannot be reached by partnership creditors. 
B) cannot be reached by partnership creditors unless partnership assets are exhausted. 
C) can only be reached by personal creditors. 
D) none of the above 
A) cannot be reached by partnership creditors. 
B) cannot be reached by partnership creditors unless partnership assets are exhausted. 
C) can only be reached by personal creditors. 
D) none of the above

Question 18

Limited liability companies are peculiar to the United States.

Accepted Answer

A) True 
 B)False

Question 19

Incorporators are not liable for contracts entered into before incorporation.

Accepted Answer

A) True 
 B)False

Question 20

Becca Franklin and Suzanne Peterson formed an LLC as co-owners and managers.The LLC made $275,000 after expenses last year.There are no provisions in their operating agreement on how profits are to be split.​
-Becca Franklin and Suzanne Peterson have formed a general partnership.The partnership,BFSP Dental,sells used dental equipment.Tragically,Suzanne is killed in an auto accident.At the time of the accident,BFSP has two dental chairs ($50,000 each)and four high-powered drills ($30,000 each).Suzanne's husband says that he just wants to take possession of one of the dental chairs and two of the drills.Which of the following is correct?

Accepted Answer

A) ​Suzanne's husband has a right to one-half of the partnership inventory. 
B) ​Suzanne's husband has no right in the partnership or its inventory since the right of survivorship leaves Becca with the business. 
C) The chairs and drills belong to BFSP and cannot be taken by Suzanne's husband. 
D) After the business is restructured, Suzanne's husband can have the chair and drills. 
A) ​Suzanne's husband has a right to one-half of the partnership inventory. 
B) ​Suzanne's husband has no right in the partnership or its inventory since the right of survivorship leaves Becca with the business. 
C) The chairs and drills belong to BFSP and cannot be taken by Suzanne's husband. 
D) After the business is restructured, Suzanne's husband can have the chair and drills.

A merger requires a board resolution and shareholder approval.

Discuss investors' concerns regarding CEO compensation.

Limited partners have liability:

Which is the proper order for distribution of assets upon dissolution of a limited partnership?

A tenancy in partnership does not carry rights of survivorship.

List the provisions of Sarbanes-Oxley that affect corporation governance.

The CEO of Citigroup announced a $8 billion write-down for the company because of bad loans.This announcement followed a previous announcement of a $5 billion write-down three quarters earlier.The board asked him to step down.

Piercing the corporate veil has been used for purposes of imposing CERCLA liability.

A shareholder proxy is:

A copy of the voting trust must be on file in the corporate records.

Unanimous consent of the partners is required for:

The corporate veil liability theory has been applied in situations that involve environmental clean-up issues.

What conduct will cost a limited partner his/her limited liability status?

Partners' personal assets:

Limited liability companies are peculiar to the United States.

Incorporators are not liable for contracts entered into before incorporation.

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance,Remedies,and Collection

Product Advertising and Liability

Business Competition: Antitrust

Business and Intellectual Property Law

Management of Employee Conduct: Agency

Governance and Regulation: Securities Law

Management of Employee Welfare

Management: Employment Discrimination

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Exam 17: Governance and Structure: Forms of Doing Business

A merger requires a board resolution and shareholder approval.

Discuss investors' concerns regarding CEO compensation.

Limited partners have liability:

Which is the proper order for distribution of assets upon dissolution of a limited partnership?

A tenancy in partnership does not carry rights of survivorship.

List the provisions of Sarbanes-Oxley that affect corporation governance.

The CEO of Citigroup announced a $8 billion write-down for the company because of bad loans.This announcement followed a previous announcement of a $5 billion write-down three quarters earlier.The board asked him to step down.

Piercing the corporate veil has been used for purposes of imposing CERCLA liability.

A shareholder proxy is:

A copy of the voting trust must be on file in the corporate records.

Unanimous consent of the partners is required for:

The corporate veil liability theory has been applied in situations that involve environmental clean-up issues.

What conduct will cost a limited partner his/her limited liability status?

Partners' personal assets:

Limited liability companies are peculiar to the United States.

Incorporators are not liable for contracts entered into before incorporation.

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts and Sales: Performance,Remedies,and Collection

Product Advertising and Liability

Business Competition: Antitrust

Business and Intellectual Property Law

Management of Employee Conduct: Agency

Governance and Regulation: Securities Law

Management of Employee Welfare

Management: Employment Discrimination

Filters