Question 1

A franchisor can require a franchisee to supply equipment and furnishings for the premises of the franchise.

Accepted Answer

A) True 
 B)False  True

Question 2

A limited liability company must be managed by non-member managers.

Accepted Answer

A) True 
 B)False  False

Question 3

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

Accepted Answer

A) no law. 
B) the federal Uniform LLC Law. 
C) the principles of partnership law. 
D) the state corporation statute. 
A) no law. 
B) the federal Uniform LLC Law. 
C) the principles of partnership law. 
D) the state corporation statute. C

Question 4

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Accepted Answer

A) True 
 B)False

Question 5

On a partner's dissociation,his or her duty of loyalty to the partnership ends.

Accepted Answer

A) True 
 B)False

Question 6

A sole proprietor owns the entire business but does not receive all of the profit.

Accepted Answer

A) True 
 B)False

Question 7

Sustainable Café LLC is a limited liability company.Like any other LLC,unless Sustainable Café chooses otherwise,the firm will be taxed as

Accepted Answer

A) a corporation. 
B) a sole proprietorship. 
C) a partnership. 
D) none of the choices. 
A) a corporation. 
B) a sole proprietorship. 
C) a partnership. 
D) none of the choices.

Question 8

A partner always has the power and the right to dissociate from the partnership.

Accepted Answer

A) True 
 B)False

Question 9

Good faith and fair dealing are important in terminating a franchise relationship.

Accepted Answer

A) True 
 B)False

Question 10

Laws governing franchising are designed in part to prevent franchisors from terminating franchises without good cause.

Accepted Answer

A) True 
 B)False

Question 11

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Accepted Answer

A) True 
 B)False

Question 12

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Accepted Answer

A) capital contributions. 
B) participation in management. 
C) the number of members. 
D) transactions with the firm. 
A) capital contributions. 
B) participation in management. 
C) the number of members. 
D) transactions with the firm.

Question 13

Refer to Fact Pattern 14-1.Desi and Gwen are

Accepted Answer

A) not partners,because Gwen does not have an ownership interest or manage?ment rights in eSites. 
B) not partners,because the pay includes an hourly wage. 
C) not partners,because the pay includes only 10 percent of the profits. 
D) partners in a partnership for two years. 
A) not partners,because Gwen does not have an ownership interest or manage?ment rights in eSites. 
B) not partners,because the pay includes an hourly wage. 
C) not partners,because the pay includes only 10 percent of the profits. 
D) partners in a partnership for two years.

Question 14

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Accepted Answer

A) True 
 B)False

Question 15

Under no circumstances can a non-partner be regarded as an agent whose acts are binding on the partnership.

Accepted Answer

A) True 
 B)False

Question 16

Limited liability companies (LLCs)are governed by state LLC statutes.

Accepted Answer

A) True 
 B)False

Question 17

The simplest form of business is a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 18

Esteban and Florian want to form a limited liability company (LLC)to manage their business,Gordian Nuts.LLC statutes have been adopted in

Accepted Answer

A) every state. 
B) no state. 
C) less than one-fifth of the states. 
D) only Wyoming. 
A) every state. 
B) no state. 
C) less than one-fifth of the states. 
D) only Wyoming.

Question 19

A partner owes to the partnership and the other partners a duty of loyalty.

Accepted Answer

A) True 
 B)False

Question 20

Sylvester buys a franchise from Resistance Athletic Shoes Inc.This relationship,like all other franchise relationships,is governed by

Accepted Answer

A) contract law. 
B) no law. 
C) the Franchise Disclosure Document,or FDD. 
D) the Uniform Commercial Code. 
A) contract law. 
B) no law. 
C) the Franchise Disclosure Document,or FDD. 
D) the Uniform Commercial Code.

Exam 14: Small Business Organizations

A franchisor can require a franchisee to supply equipment and furnishings for the premises of the franchise.

A limited liability company must be managed by non-member managers.

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

A sole proprietor has unlimited liability for all obligations that arise in doing business.

On a partner's dissociation,his or her duty of loyalty to the partnership ends.

A sole proprietor owns the entire business but does not receive all of the profit.

Sustainable Café LLC is a limited liability company.Like any other LLC,unless Sustainable Café chooses otherwise,the firm will be taxed as

A partner always has the power and the right to dissociate from the partnership.

Good faith and fair dealing are important in terminating a franchise relationship.

Laws governing franchising are designed in part to prevent franchisors from terminating franchises without good cause.

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Refer to Fact Pattern 14-1.Desi and Gwen are

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Under no circumstances can a non-partner be regarded as an agent whose acts are binding on the partnership.

Limited liability companies (LLCs)are governed by state LLC statutes.

The simplest form of business is a sole proprietorship.

Esteban and Florian want to form a limited liability company (LLC)to manage their business,Gordian Nuts.LLC statutes have been adopted in

A partner owes to the partnership and the other partners a duty of loyalty.

Sylvester buys a franchise from Resistance Athletic Shoes Inc.This relationship,like all other franchise relationships,is governed by

Business and Its Legal Environment

A: Online Developments:

Ethics and Business Decision Making

Courts and Alternative Dispute Resolution

Constitutional Authority to Regulate Business

Torts,cyber Torts,and Strict Liabiity

Criminal Law and Cyber Crime

International Law in a Global Economy

Intellectual Property and Internet Law

A: Online Developments:

Formation in Traditional and E-Contracts

Contract Performance,breach,and Remedies

Sales,leases,and Product Liability

Creditor-Debtor Relations and Bankruptcy

Mortgages Foreclosures After the Recession

A: Landmark in the Legal Environment:

Corporations

Agency

Employment,immigration,and Labor Law

Employment Discrimination

Powers and Functions of Administrative Agencies

Consumer Protection

Protecting the Environment

Real Property and Land-Use Control

Antitrust Law and Promoting Competition

Investor Protection and Corporate Governance

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