Question 1

Securities regulations are a federal responsibility.

Accepted Answer

A) True 
 B)False

Question 2

A partnership is primarily a contractual relationship and can be created verbally or implied by conduct.

Accepted Answer

A) True 
 B)False

Question 3

With regard to the law of corporations, which of the following is true?

Accepted Answer

A) A director of a corporation could not be personally liable on a promissory note even if he just signed his own name, as long as at the time he had intended to sign on behalf of the corporation. 
B) If a minority shareholder is treated unfairly, the appropriate relief to request is that the court "lift the corporate veil." 
C) In many jurisdictions, pre-emptive rights entitle a shareholder to pass on her right to vote to someone else. 
D) "Relief from oppression" provisions allow a party who has contracted with the corporation to force the corporation to honour a contract it has signed in an irregular manner. 
E) A creditor of a corporation could sue for some remedy if the directors of the corporation voted for a resolution to pay a dividend when the corporation was insolvent. 
A) A director of a corporation could not be personally liable on a promissory note even if he just signed his own name, as long as at the time he had intended to sign on behalf of the corporation. 
B) If a minority shareholder is treated unfairly, the appropriate relief to request is that the court "lift the corporate veil." 
C) In many jurisdictions, pre-emptive rights entitle a shareholder to pass on her right to vote to someone else. 
D) "Relief from oppression" provisions allow a party who has contracted with the corporation to force the corporation to honour a contract it has signed in an irregular manner. 
E) A creditor of a corporation could sue for some remedy if the directors of the corporation voted for a resolution to pay a dividend when the corporation was insolvent.

Question 4

Based on the clarification provided by the Supreme Court of Canada in the BCE case, explain the fiduciary duty owed by directors.

Accepted Answer

The court made it clear that the duty of

Question 5

With regard to the liability of partners, which of the following is false?

Accepted Answer

A) A general partner has unlimited liability for any loss suffered because of the negligent act (e.g., omission) of one of his partners if there are insufficient funds in the partnership to pay the person who suffered the loss. 
B) The partnership, and thus the partners, is liable for any loss suffered because of a tort committed by its employee in the course of employment. 
C) A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner. 
D) A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication. 
E) A limited partner is liable only for the amount of his initial investment if he follows the directions set out in the Partnership Act (e.g., not taking part in management). 
A) A general partner has unlimited liability for any loss suffered because of the negligent act (e.g., omission) of one of his partners if there are insufficient funds in the partnership to pay the person who suffered the loss. 
B) The partnership, and thus the partners, is liable for any loss suffered because of a tort committed by its employee in the course of employment. 
C) A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner. 
D) A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication. 
E) A limited partner is liable only for the amount of his initial investment if he follows the directions set out in the Partnership Act (e.g., not taking part in management).

Question 6

Jed Wimsey, after auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought were improper.Which of the following practices mentioned by Jed would be a breach of fiduciary duty?

Accepted Answer

A) An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors. 
B) A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations. 
C) A director of a corporation profited $25 000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote. 
D) A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home. 
E) The directors failed to declare a dividend for the fourth year in a row. 
A) An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors. 
B) A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations. 
C) A director of a corporation profited $25 000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote. 
D) A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home. 
E) The directors failed to declare a dividend for the fourth year in a row.

Question 7

ABC Ltd.is a closely held corporation.Two of the shareholders serve as directors.As directors, they voted to issue themselves more shares to increase their voting control of the corporation.Which of the following provisions would aid the other shareholders?

Accepted Answer

A) Indoor-management rule 
B) Pre-emptive right provisions 
C) Derivative-action provisions 
D) Relief-from-oppression provisions 
E) Dissent procedure 
A) Indoor-management rule 
B) Pre-emptive right provisions 
C) Derivative-action provisions 
D) Relief-from-oppression provisions 
E) Dissent procedure

Question 8

In which of the following is there not a fiduciary duty owed?

Accepted Answer

A) Officer of a company to the company 
B) Partners to each other 
C) Manager to employer 
D) Agent to her principal 
E) Director to shareholders 
A) Officer of a company to the company 
B) Partners to each other 
C) Manager to employer 
D) Agent to her principal 
E) Director to shareholders

Question 9

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Accepted Answer

A) A partnership can be created by an intention to share the revenues between the partners. 
B) For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
C) For a person to be a limited partner, there must be at least two general partners. 
D) A partnership can be created only by contract. 
E) Where two people agree to enter into a partnership, there is no partnership created unless all elements of a contract are present. 
A) A partnership can be created by an intention to share the revenues between the partners. 
B) For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. 
C) For a person to be a limited partner, there must be at least two general partners. 
D) A partnership can be created only by contract. 
E) Where two people agree to enter into a partnership, there is no partnership created unless all elements of a contract are present.

Question 10

Indicate three advantages to incorporation.

Accepted Answer

Limited liability; reduced taxes under s

Question 11

Joe R.notified his partners in writing that he would be retiring from the business partnership at the end of 2013.It was acknowledged and agreed upon and, at year-end, the remaining partners paid him for his interest in the partnership.In February 2014, one of the remaining partners misapplied some trust funds that a long-time client had placed in the care of the partnership for the purchase of a hotel.The partnership was sued, but the assets of the partnership were not sufficient to satisfy the judgment.The successful plaintiff went against the personal assets of the partners, including those of Joe R.What is the likely outcome?

Accepted Answer

A) Joe R.is not liable because he had retired from the partnership at year-end and had properly notified his partners. 
B) Joe R.is not liable because he had nothing whatsoever to do with the misapplication of the trust money. 
C) Joe R.is not liable since he was not a partner when the misapplication happened. 
D) Joe R.is only liable for his share of the losses even if the other partners don't have the assets to pay. 
E) Joe R.is liable if he failed to give proper notice to outsiders, namely, the long-time client whose funds were misapplied. 
A) Joe R.is not liable because he had retired from the partnership at year-end and had properly notified his partners. 
B) Joe R.is not liable because he had nothing whatsoever to do with the misapplication of the trust money. 
C) Joe R.is not liable since he was not a partner when the misapplication happened. 
D) Joe R.is only liable for his share of the losses even if the other partners don't have the assets to pay. 
E) Joe R.is liable if he failed to give proper notice to outsiders, namely, the long-time client whose funds were misapplied.

Question 12

Joe is an environmental activist and he acquired shares in MacMillan Bloedel (a forestry corporation), only for the purpose of undermining MacMillan Bloedel, speaking against its practices at annual shareholders' meetings, and getting access to confidential information.Joe spoke against MacMillan Bloedel at every opportunity.Explain his legal obligations to the corporation under these circumstances.

Accepted Answer

He has none.As a sha

Question 13

Which of the following is correct with respect to partnership?

Accepted Answer

A) A partnership can be made up of only limited partners. 
B) Partnership is a separate legal entity. 
C) Partners are not agents for each other. 
D) General partners have unlimited liability. 
E) General partners have limited liability. 
A) A partnership can be made up of only limited partners. 
B) Partnership is a separate legal entity. 
C) Partners are not agents for each other. 
D) General partners have unlimited liability. 
E) General partners have limited liability.

Question 14

"For a partnership to exist, the parties must have consented to its creation." Comment on the accuracy of this statement.

Accepted Answer

It's inaccurate.A partnership

Securities regulations are a federal responsibility.

A partnership is primarily a contractual relationship and can be created verbally or implied by conduct.

With regard to the law of corporations, which of the following is true?

Based on the clarification provided by the Supreme Court of Canada in the BCE case, explain the fiduciary duty owed by directors.

With regard to the liability of partners, which of the following is false?

Jed Wimsey, after auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought were improper.Which of the following practices mentioned by Jed would be a breach of fiduciary duty?

ABC Ltd.is a closely held corporation.Two of the shareholders serve as directors.As directors, they voted to issue themselves more shares to increase their voting control of the corporation.Which of the following provisions would aid the other shareholders?

In which of the following is there not a fiduciary duty owed?

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Indicate three advantages to incorporation.

Which of the following is correct with respect to partnership?

"For a partnership to exist, the parties must have consented to its creation." Comment on 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

Exam 7: Methods of Carrying on Business

Securities regulations are a federal responsibility.

A partnership is primarily a contractual relationship and can be created verbally or implied by conduct.

With regard to the law of corporations, which of the following is true?

Based on the clarification provided by the Supreme Court of Canada in the BCE case, explain the fiduciary duty owed by directors.

With regard to the liability of partners, which of the following is false?

Jed Wimsey, after auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought were improper.Which of the following practices mentioned by Jed would be a breach of fiduciary duty?

ABC Ltd.is a closely held corporation.Two of the shareholders serve as directors.As directors, they voted to issue themselves more shares to increase their voting control of the corporation.Which of the following provisions would aid the other shareholders?

In which of the following is there not a fiduciary duty owed?

Which one of the following statements is correct with respect to the creation of a partnership agreement?

Indicate three advantages to incorporation.

Which of the following is correct with respect to partnership?

"For a partnership to exist, the parties must have consented to its creation." Comment on 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