Question 1

If dividends are not paid, preferred shares usually convert to voting shares.

Accepted Answer

A) True 
 B)False

Question 2

In the BCE case, the Supreme Court clarified the fiduciary duty owed by directors.Which of the following correctly reflects the court's view in this case?

Accepted Answer

A) The duty is owed to the corporation; in determining what is in the best interest of the corporation, directors may consider the interests of all stakeholders. 
B) The duty is owed to the corporation and only the corporation; no consideration should be given to shareholders, employees, or creditors. 
C) The duty is owed to all stakeholders; the interests of shareholders, employees, and creditors should be emphasized in all decisions. 
D) The duty is owed to the corporation; in determining what is in the best interest of the corporation, directors must consider the interests of shareholders. 
E) The duty is owed to the corporation; in determining what is in the best interest of the corporation, the directors must consider the interests of employees. 
A) The duty is owed to the corporation; in determining what is in the best interest of the corporation, directors may consider the interests of all stakeholders. 
B) The duty is owed to the corporation and only the corporation; no consideration should be given to shareholders, employees, or creditors. 
C) The duty is owed to all stakeholders; the interests of shareholders, employees, and creditors should be emphasized in all decisions. 
D) The duty is owed to the corporation; in determining what is in the best interest of the corporation, directors must consider the interests of shareholders. 
E) The duty is owed to the corporation; in determining what is in the best interest of the corporation, the directors must consider the interests of employees.

Question 3

A broadly held corporation has fewer and less stringent reporting and accounting requirements than a closely held corporation.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following statements is correct with respect to the law of partnership?

Accepted Answer

A) Partners are responsible for any contracts entered into by the partners related to the partnership business. 
B) Partners are only responsible for contracts entered into by the partnership if the third party knew that the person it was dealing with was a partner in the partnership. 
C) A partner is responsible for contracts with third parties entered into by the partners only where it has been clearly stated by the partner to the third parties that he is entering the contract on behalf of the partnership. 
D) Partners cannot bind their partners in contract without specific written authority. 
E) Every partner is responsible for every contract entered into by the partnership. 
A) Partners are responsible for any contracts entered into by the partners related to the partnership business. 
B) Partners are only responsible for contracts entered into by the partnership if the third party knew that the person it was dealing with was a partner in the partnership. 
C) A partner is responsible for contracts with third parties entered into by the partners only where it has been clearly stated by the partner to the third parties that he is entering the contract on behalf of the partnership. 
D) Partners cannot bind their partners in contract without specific written authority. 
E) Every partner is responsible for every contract entered into by the partnership.

Question 5

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Accepted Answer

A) Partnership exists where two or more persons carry on business in common with a view to profit. 
B) A partnership exists only where two or more people enter into a written agreement to be partners. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists where any business is carried on with a view toward profits. 
A) Partnership exists where two or more persons carry on business in common with a view to profit. 
B) A partnership exists only where two or more people enter into a written agreement to be partners. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists where any business is carried on with a view toward profits.

Question 6

A sole proprietor is free from regulatory control.

Accepted Answer

A) True 
 B)False

Question 7

A corporation is considered to be a separate legal entity from the shareholders who make it up.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following will establish the existence of a partnership?

Accepted Answer

A) The goodwill portion of the sale of a business is repaid by a share of the profits. 
B) An employee receives a profit-sharing bonus. 
C) The beneficiary of a deceased partner takes that partner's share of the income from the partnership. 
D) The parties intend to share the expenses of the business. 
E) A debt is repaid by the creditor taking a share of the profits. 
A) The goodwill portion of the sale of a business is repaid by a share of the profits. 
B) An employee receives a profit-sharing bonus. 
C) The beneficiary of a deceased partner takes that partner's share of the income from the partnership. 
D) The parties intend to share the expenses of the business. 
E) A debt is repaid by the creditor taking a share of the profits.

Question 9

Shareholders in a closely held corporation are entitled to sell their shares to whomever they want without restriction.

Accepted Answer

A) True 
 B)False

Question 10

When the partners fail to register their partnership, they can neither sue nor be sued.

Accepted Answer

A) True 
 B)False

Question 11

Jones is a partner in a law firm in a small town, and he is also doing legal work out of his home in the evenings for himself.Which of the following statements is correct with respect to his responsibility for the money he earns?

Accepted Answer

A) Jones has a duty to tell the other partners, but the money is his and he can continue the extra work regardless of the other partners' consent. 
B) Jones has no responsibility; the money he makes through this extra work is his. 
C) Such conduct will automatically dissolve the partnership, but Jones can keep what he has made. 
D) If Jones did not have the consent of his partners, he must pay over all money he makes through his business at home to the partnership. 
E) If Jones is a one-third partner in the law firm, he need only pay over a third of what he makes on the side. 
A) Jones has a duty to tell the other partners, but the money is his and he can continue the extra work regardless of the other partners' consent. 
B) Jones has no responsibility; the money he makes through this extra work is his. 
C) Such conduct will automatically dissolve the partnership, but Jones can keep what he has made. 
D) If Jones did not have the consent of his partners, he must pay over all money he makes through his business at home to the partnership. 
E) If Jones is a one-third partner in the law firm, he need only pay over a third of what he makes on the side.

Question 12

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

Accepted Answer

Partners have unlimited liability for th

Question 13

When a partnership dissolves, which of the following is not one of the causes?

Accepted Answer

A) The partnership is dissolved when one of the partners dies. 
B) The partnership is dissolved when one of the partners starts a business in competition with the partnership business. 
C) The partnership is dissolved when one of the partners goes bankrupt. 
D) The partnership is dissolved when one of the partners serves notice on the other partners to that effect. 
E) A partnership can be dissolved by order of the court. 
A) The partnership is dissolved when one of the partners dies. 
B) The partnership is dissolved when one of the partners starts a business in competition with the partnership business. 
C) The partnership is dissolved when one of the partners goes bankrupt. 
D) The partnership is dissolved when one of the partners serves notice on the other partners to that effect. 
E) A partnership can be dissolved by order of the court.

Question 14

Which one of the following statements is correct with respect to sole proprietorships?

Accepted Answer

A) The sole proprietor has the same extent of liability as a shareholder. 
B) The sole proprietor must consult with the other owners before making any major decisions regarding the business. 
C) The sole proprietor is responsible for the torts committed by an employee that take place within the scope of employment. 
D) The sole proprietor need not adhere to any licensing and government regulations. 
E) The sole proprietor has limited liability. 
A) The sole proprietor has the same extent of liability as a shareholder. 
B) The sole proprietor must consult with the other owners before making any major decisions regarding the business. 
C) The sole proprietor is responsible for the torts committed by an employee that take place within the scope of employment. 
D) The sole proprietor need not adhere to any licensing and government regulations. 
E) The sole proprietor has limited liability.

Question 15

A sole proprietor is responsible not only for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following statements is correct with respect to the liability of partners?

Accepted Answer

A) A general partner is responsible, independent of what she has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
B) If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
C) When a partner enters into a partnership arrangement, she can only lose what she has invested in that partnership. 
D) If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner. 
E) A partner can protect herself from any liability beyond her investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability. 
A) A general partner is responsible, independent of what she has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim. 
B) If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner. 
C) When a partner enters into a partnership arrangement, she can only lose what she has invested in that partnership. 
D) If there are three equal partners in a partnership, an injured third party can only collect one third of the claim from any one partner. 
E) A partner can protect herself from any liability beyond her investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability.

Question 17

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

Accepted Answer

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

Question 18

Distinguish between a partnership and a corporation.

Accepted Answer

A partnership involves two or more peopl

Question 19

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

Accepted Answer

A) True 
 B)False

Question 20

In which one of the following situations will a court find that a partnership exists?

Accepted Answer

A) Joe sells his business to Harry for $10 000 for the assets and a further $20 000 for goodwill, the goodwill portion to be paid at a rate of 20% of the profits from the business until paid. 
B) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
C) Joe and Mary promote several dances at school and split the profits. 
D) Joe, a partner in a law firm, dies and Joe's widow takes over Joe's share of the profits. 
E) Joe and Mary, while attending university, purchase a house and share the profits from the rent after deducting expenses. 
A) Joe sells his business to Harry for $10 000 for the assets and a further $20 000 for goodwill, the goodwill portion to be paid at a rate of 20% of the profits from the business until paid. 
B) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
C) Joe and Mary promote several dances at school and split the profits. 
D) Joe, a partner in a law firm, dies and Joe's widow takes over Joe's share of the profits. 
E) Joe and Mary, while attending university, purchase a house and share the profits from the rent after deducting expenses.

If dividends are not paid, preferred shares usually convert to voting shares.

In the BCE case, the Supreme Court clarified the fiduciary duty owed by directors.Which of the following correctly reflects the court's view in this case?

A broadly held corporation has fewer and less stringent reporting and accounting requirements than a closely held corporation.

Which one of the following statements is correct with respect to the law of partnership?

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

A sole proprietor is free from regulatory control.

A corporation is considered to be a separate legal entity from the shareholders who make it up.

Which of the following will establish the existence of a partnership?

Shareholders in a closely held corporation are entitled to sell their shares to whomever they want without restriction.

When the partners fail to register their partnership, they can neither sue nor be sued.

Jones is a partner in a law firm in a small town, and he is also doing legal work out of his home in the evenings for himself.Which of the following statements is correct with respect to his responsibility for the money he earns?

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

When a partnership dissolves, which of the following is not one of the causes?

Which one of the following statements is correct with respect to sole proprietorships?

A sole proprietor is responsible not only for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Which one of the following statements is correct with respect to the liability of partners?

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

Distinguish between a partnership and a corporation.

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

In which one of the following situations will a court find that a partnership exists?

The Canadian Legal System

Torts and Professional Liability

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Enforcing Contractual Obligations

Legislation in the Marketplace

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Exam 7: Methods of Carrying on Business

If dividends are not paid, preferred shares usually convert to voting shares.

In the BCE case, the Supreme Court clarified the fiduciary duty owed by directors.Which of the following correctly reflects the court's view in this case?

A broadly held corporation has fewer and less stringent reporting and accounting requirements than a closely held corporation.

Which one of the following statements is correct with respect to the law of partnership?

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

A sole proprietor is free from regulatory control.

A corporation is considered to be a separate legal entity from the shareholders who make it up.

Which of the following will establish the existence of a partnership?

Shareholders in a closely held corporation are entitled to sell their shares to whomever they want without restriction.

When the partners fail to register their partnership, they can neither sue nor be sued.

Jones is a partner in a law firm in a small town, and he is also doing legal work out of his home in the evenings for himself.Which of the following statements is correct with respect to his responsibility for the money he earns?

Discuss the problem of liability with respect to partnership and how this difficulty can be overcome if partnership is chosen as the method of carrying on business.

When a partnership dissolves, which of the following is not one of the causes?

Which one of the following statements is correct with respect to sole proprietorships?

A sole proprietor is responsible not only for his own conduct but also for the wrongful conduct of any employee done in the course of employment.

Which one of the following statements is correct with respect to the liability of partners?

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

Distinguish between a partnership and a corporation.

A partnership can always be brought to an end by the service of notice on the other partners, no matter what the partnership agreement says.

In which one of the following situations will a court find that a partnership exists?

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