Exam 7: Methods of Carrying on Business

Which one of the following situations will result in a partnership existing? Assume that no corporation has been created.

Which of the following might be a successful claim (i.e., defence) if a director is charged personally for violation of environmental regulations, resulting in pollution?

Which of the following is incorrect with respect to the creation of a partnership?

"A partnership can be created by the conduct of the parties." Discuss the accuracy of this statement.

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

Directors owe a fiduciary duty to the shareholders.

If a director fails in his duty to the corporation, what rights does a minority shareholder have to hold him accountable?

John Hollin was an officer, director, and employee of a large broadly held corporation.At a directors meeting, he learned that the corporation was voting on a resolution to buy a piece of property from Sam Keanu for $100 000.It so happens that Hollin is one of three co-owners of that property.Hollin voted for the purchase and the resolution passed without discussion by a vote of 5-0.Several months after completion of the purchase, the other directors learned of Hollin's ownership and called on him to account to the corporation for any profit made.Which of the following is false?

Explain under what circumstances a shareholder's right to dissent arises.

Explain what a retiring partner should do to ensure that he is no longer liable for the company's obligations.

When two people enter into a partnership by agreement but neglect to set out the terms of such agreement, or where the parties becomes partners inadvertently, where are the terms and arrangements of that partnership set out?

Partners are vicariously liable for the wrongful acts of employees committed on partnership business.

"Partners in a limited liability partnership (LLP) are not liable for the liability of the partnership." Discuss the accuracy of this statement.

If three partners set out a term in their partnership agreement that John would only be responsible for 10 percent of any losses, yet he has to pay 100 percent of a claim because the other partners have no funds, John could seek contributions from the other partners according to the partnership agreement.

To whom does the director owe the duty to be careful?

A sole proprietor carries on business alone and cannot employ others in the process.

What is the significance of a corporation being classed as a separate legal entity?

Three classmates incorporated about a week after graduation.The authorized capital was 500 000 common no-par-value shares.Each classmate took one share, and each was a director.If the directors decide to issue more shares from the treasury to raise more capital, which of the following provisions ensures that they keep their proportionate holdings?

Explain the regulation environment in Canada related to the purchase, sale, and promotion of shares and other financial vehicles (i.e., securities).

A corporation is a fiction that does not exist in reality.