Question 1

Which of the following is true with regard to partnership?

Accepted Answer

A) The terms of the Partnership Act will be implied in a partnership agreement that includes provisions on the same point. 
B) Sharing gross receipts is sufficient evidence of the existence of a partnership. 
C) A general partner is not an agent of the firm and the other partners. 
D) No partnership can be formed unless the parties intended to create a partnership. 
E) A limited partnership is an arrangement in which a partner may limit liability to his capital contribution. 
A) The terms of the Partnership Act will be implied in a partnership agreement that includes provisions on the same point. 
B) Sharing gross receipts is sufficient evidence of the existence of a partnership. 
C) A general partner is not an agent of the firm and the other partners. 
D) No partnership can be formed unless the parties intended to create a partnership. 
E) A limited partnership is an arrangement in which a partner may limit liability to his capital contribution.

Question 2

Which of the following is correct with respect to limited partnerships?

Accepted Answer

A) Limited partnership refers to the fact that some partnerships are only created for a limited period of time. 
B) Limited partnership refers to the fact that some partners have limited liability. 
C) Limited partnership refers to the fact that no more than five people are allowed to be partners in such partnerships. 
D) Limited partnership refers to the fact that limited partnerships can only carry on in certain kinds of businesses. 
E) Limited partnership refers to the fact that the partnership can only issue common shares. 
A) Limited partnership refers to the fact that some partnerships are only created for a limited period of time. 
B) Limited partnership refers to the fact that some partners have limited liability. 
C) Limited partnership refers to the fact that no more than five people are allowed to be partners in such partnerships. 
D) Limited partnership refers to the fact that limited partnerships can only carry on in certain kinds of businesses. 
E) Limited partnership refers to the fact that the partnership can only issue common shares.

Question 3

To protect directors from exposure to personal liability in the case of violations of statutes related to the environment and competition, corporations often include terms in the directors' contracts that provide indemnification for losses they incur and legal expenses associated with involvement in these types of actions.

Accepted Answer

A) True 
 B)False

Question 4

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets (such as their homes and cars) are also at risk.

Accepted Answer

A) True 
 B)False

Question 5

A real estate agent, by virtue of his fiduciary duty to his principal, is not allowed to buy the property being sold by his principal without full disclosure to and consent from his principal.The real estate agent does not want to disclose that he is the buyer of the property, so he forms a corporation and takes an offer to his principal from the corporation.Based on these facts, which of the following is true if the principal finds out that the corporation/buyer is owned by the real estate agent and objects to the contract?

Accepted Answer

A) The court would enforce the contract because the corporation is a separate legal entity in the eyes of the law. 
B) The court would not enforce the contract and would "lift the corporate veil." 
C) The court would enforce the contract because this is not a direct breach of the agent's fiduciary duty. 
D) The court would dissolve the corporation. 
E) The court would enforce the contract, but the principal would be able to claim any profits from the agent when he took them out of the corporation. 
A) The court would enforce the contract because the corporation is a separate legal entity in the eyes of the law. 
B) The court would not enforce the contract and would "lift the corporate veil." 
C) The court would enforce the contract because this is not a direct breach of the agent's fiduciary duty. 
D) The court would dissolve the corporation. 
E) The court would enforce the contract, but the principal would be able to claim any profits from the agent when he took them out of the corporation.

Question 6

Joe is a shareholder of XYZ Corporation, an extremely profitable corporation in the software business, and was upset when the directors of the corporation refused to declare a dividend again, putting the money back into research and development.Joe sued, along with several other shareholders, claiming that there was no excuse for withholding dividends under these circumstances.Explain the likely outcome.

Accepted Answer

A shareholder has no

Question 7

Which one of the following statements about general partnerships is false?

Accepted Answer

A) A general partner can limit his liability for the firm's obligations by using the term "limited" after his name on stationery. 
B) Each partner has unlimited personal liability for the debts of the partnership. 
C) The Partnership Act can imply contractual terms into a partnership where the partners did not expressly agree on some detail of the relationship. 
D) Partnership is the relationship that exists between persons carrying on business together with a view to making a profit. 
E) A partnership can exist even without a written partnership agreement. 
A) A general partner can limit his liability for the firm's obligations by using the term "limited" after his name on stationery. 
B) Each partner has unlimited personal liability for the debts of the partnership. 
C) The Partnership Act can imply contractual terms into a partnership where the partners did not expressly agree on some detail of the relationship. 
D) Partnership is the relationship that exists between persons carrying on business together with a view to making a profit. 
E) A partnership can exist even without a written partnership agreement.

Question 8

Indicate three significant results of a corporation being classed as a separate legal personality.

Accepted Answer

1.Limited liability

Question 9

Chan sold a business to Scott and in the process they valued the "goodwill" at $50 000.In the sale contract, it was agreed that this amount would be paid by Scott, giving Chan 15% of the business profits until it was paid.This creates a partnership between them.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true with respect to the obligations in a partnership relationship?

Accepted Answer

A) In the absence of agreement to the contrary, the partnership is dissolved when one of the partners serves the others with notice to the effect that he wishes to continue. 
B) When a partnership is dissolved, its resources must be used to pay its debts and liabilities; if its assets are insufficient to do this, the partners must use personal resources to meet those obligations. 
C) When a partnership is dissolved, each partner can only be forced by a creditor to pay a portion of the debt equal to his share of the capital contributed. 
D) A partnership can be dissolved only by court order. 
E) In the absence of agreement to the contrary, when one of the partners is injured, the partnership is dissolved. 
A) In the absence of agreement to the contrary, the partnership is dissolved when one of the partners serves the others with notice to the effect that he wishes to continue. 
B) When a partnership is dissolved, its resources must be used to pay its debts and liabilities; if its assets are insufficient to do this, the partners must use personal resources to meet those obligations. 
C) When a partnership is dissolved, each partner can only be forced by a creditor to pay a portion of the debt equal to his share of the capital contributed. 
D) A partnership can be dissolved only by court order. 
E) In the absence of agreement to the contrary, when one of the partners is injured, the partnership is dissolved.

Question 11

Joe and Sam set up an import/export business in partnership, but they need extra money.Harry is invited to invest as a limited partner.Unfortunately, the business begins to lose money because of the poor business sense of Joe and Sam.Harry has the business expertise to turn the business around, or at least he thinks so.What would your advice be to Harry in these circumstances?

Accepted Answer

Not to get involved in the man

Question 12

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a violation of the fiduciary duty of a partner?

Accepted Answer

A) Where one partner carries on a business unrelated to the partnership with the permission of the partners 
B) Where a partner uses the partnership property for partnership business 
C) Where one partner learns of an investment opportunity in the field of the partnership and tells the partners.The partners decline on the opportunity, so he takes advantage of it himself. 
D) Where one partner uses information that he has gained from the partnership for the advantage of the partnership 
E) Where one partner starts another business, without the consent of the other partners, that is the same as or in competition with the partnership business 
A) Where one partner carries on a business unrelated to the partnership with the permission of the partners 
B) Where a partner uses the partnership property for partnership business 
C) Where one partner learns of an investment opportunity in the field of the partnership and tells the partners.The partners decline on the opportunity, so he takes advantage of it himself. 
D) Where one partner uses information that he has gained from the partnership for the advantage of the partnership 
E) Where one partner starts another business, without the consent of the other partners, that is the same as or in competition with the partnership business

Question 14

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Accepted Answer

Here students must show that they unders

Question 15

Mrs.Marine was a director of a major investment corporation.In the course of her normal work, she identified a land development investment opportunity that she felt would be good for the company and passed along the information to the board of directors.The board rejected the opportunity and told Mrs.Marine she could pursue it on her own.Mrs.Marine is trying to decide if she should take advantage of the investment opportunity.What advice would you offer to her?

Accepted Answer

A) Mrs.Marine should consider the opportunity and ensure that no harm could come to the corporation if she participates in the deal, as a shareholder may be able to bring an oppression action against her in such a situation. 
B) Mrs.Marine should enter into the investment opportunity with confidence, as she fulfilled her fiduciary duty and has permission from the board of directors. 
C) Mrs.Marine should consider the opportunity and ensure that no harm could come to the corporation if she participates in the deal, as a shareholder may be able to bring a representative action against her in such a situation. 
D) Mrs.Marine should only enter into the investment opportunity after she has the permission from the board of directors in writing. 
E) Mrs.Marine should not proceed with the opportunity, as she should realize that the board of directors could change its decision. 
A) Mrs.Marine should consider the opportunity and ensure that no harm could come to the corporation if she participates in the deal, as a shareholder may be able to bring an oppression action against her in such a situation. 
B) Mrs.Marine should enter into the investment opportunity with confidence, as she fulfilled her fiduciary duty and has permission from the board of directors. 
C) Mrs.Marine should consider the opportunity and ensure that no harm could come to the corporation if she participates in the deal, as a shareholder may be able to bring a representative action against her in such a situation. 
D) Mrs.Marine should only enter into the investment opportunity after she has the permission from the board of directors in writing. 
E) Mrs.Marine should not proceed with the opportunity, as she should realize that the board of directors could change its decision.

Question 16

Discuss the principle of limited liability, why it arises in the law governing corporations, and its significance.

Accepted Answer

This is a relatively straightforward que

Question 17

If expected dividends are not paid to preferred shareholders, there is no right to sue although those unpaid dividends will accumulate.

Accepted Answer

A) True 
 B)False

Question 18

Joe entered into partnership with two others in the establishment of a real estate sales agency.The other two, Sam and Harry, had considerable experience in the real estate business but no money.Joe, on the other hand, had his own home and several significant assets, and although he didn't have any experience in the real estate business, his monetary contribution made him an equal partner with Sam and Harry.Unfortunately, Harry misused some trust funds that had come into his care as a result of business, investing them in the business of one of his sons rather than in an interest-bearing account.The business of the son went sour and the money was lost.The client sued Harry, Sam, and Joe.Explain the legal position of Joe here.

Accepted Answer

Because Joe is a partner with the other

Question 19

"As in other forms of business, when decisions are to be taken, the majority of the partners must approve the decision." Discuss the accuracy of this statement.

Accepted Answer

It's inaccurate.All of the par

Question 20

Smith, director of ABC Ltd., intercepted a corporate opportunity for his own benefit and thereby caused the corporation to miss a $45 000 profit.A shareholder urged the board of directors to take action against him.The other directors, all close friends of Smith from school days, did not take any action against him, although they did voice their dissatisfaction with his move.Which of the following provisions would aid the shareholder?

Accepted Answer

A) Dissent procedure 
B) Representative action (derivative-action) provision 
C) Indoor-management rule 
D) Pre-emptive right provision 
E) Relief-from-oppression provision 
A) Dissent procedure 
B) Representative action (derivative-action) provision 
C) Indoor-management rule 
D) Pre-emptive right provision 
E) Relief-from-oppression provision

Which of the following is true with regard to partnership?

Which of the following is correct with respect to limited partnerships?

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets (such as their homes and cars) are also at risk.

Which one of the following statements about general partnerships is false?

Indicate three significant results of a corporation being classed as a separate legal personality.

Chan sold a business to Scott and in the process they valued the "goodwill" at $50 000.In the sale contract, it was agreed that this amount would be paid by Scott, giving Chan 15% of the business profits until it was paid.This creates a partnership between them.

Which of the following statements is true with respect to the obligations in a partnership relationship?

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Which of the following is a violation of the fiduciary duty of a partner?

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Discuss the principle of limited liability, why it arises in the law governing corporations, and its significance.

If expected dividends are not paid to preferred shareholders, there is no right to sue although those unpaid dividends will accumulate.

"As in other forms of business, when decisions are to be taken, the majority of the partners must approve the decision." Discuss the accuracy of this statement.

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Enforcing Contractual Obligations

Legislation in the Marketplace

Agency and Employment

Property

Ideas and Information

Electronic Commerce and International Trade

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Exam 7: Methods of Carrying on Business

Which of the following is true with regard to partnership?

Which of the following is correct with respect to limited partnerships?

The unlimited liability of partners means that not only can they lose their entire investment in the business, but their personal assets (such as their homes and cars) are also at risk.

Which one of the following statements about general partnerships is false?

Indicate three significant results of a corporation being classed as a separate legal personality.

Chan sold a business to Scott and in the process they valued the "goodwill" at $50 000.In the sale contract, it was agreed that this amount would be paid by Scott, giving Chan 15% of the business profits until it was paid.This creates a partnership between them.

Which of the following statements is true with respect to the obligations in a partnership relationship?

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Which of the following is a violation of the fiduciary duty of a partner?

Explain why the law of partnership poses a danger to people carrying on joint business activities.

Discuss the principle of limited liability, why it arises in the law governing corporations, and its significance.

If expected dividends are not paid to preferred shareholders, there is no right to sue although those unpaid dividends will accumulate.

"As in other forms of business, when decisions are to be taken, the majority of the partners must approve the decision." Discuss the accuracy of this statement.

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Enforcing Contractual Obligations

Legislation in the Marketplace

Agency and Employment

Property

Ideas and Information

Electronic Commerce and International Trade

Filters