Question 1

A limited partnership and a limited liability partnership refer to the same type of business organization.

Accepted Answer

A) True 
 B)False  False

Question 2

When a person decides to go into business on his or her own without further formality,what do they form?

Accepted Answer

A) Sole proprietorship 
B) Single entity 
C) Sole entrepreneurship 
D) Individual entity 
E) Single entrepreneurship 
A) Sole proprietorship 
B) Single entity 
C) Sole entrepreneurship 
D) Individual entity 
E) Single entrepreneurship A

Question 3

Which statement is true regarding S corporations?

Accepted Answer

A) They may be formed under federal law. 
B) They are considered partnerships yet taxed like corporations as long as they follow regulations. 
C) Shareholders do not report profit on their personal income tax forms. 
D) They cannot have more than 80 shareholders. 
E) Income is taxed only when distributed to the shareholders,who must not report the income on their personal income tax forms. 
A) They may be formed under federal law. 
B) They are considered partnerships yet taxed like corporations as long as they follow regulations. 
C) Shareholders do not report profit on their personal income tax forms. 
D) They cannot have more than 80 shareholders. 
E) Income is taxed only when distributed to the shareholders,who must not report the income on their personal income tax forms. A

Question 4

Which of the following statements is true regarding Rashi's inspections of franchisees' kitchens?

Accepted Answer

A) Franchise law prohibits such inspections because a franchisee is seen as a separate corporation. 
B) Rashi had the right to do so only if she can establish the existence of customer complaints. 
C) Franchise law prohibits such inspections because a franchisee is seen as a separate partnership. 
D) Rashi had the right to do so only if workers' compensation claims had been filed against the franchisees involved. 
E) Rashi had the right to inspect the kitchens. 
A) Franchise law prohibits such inspections because a franchisee is seen as a separate corporation. 
B) Rashi had the right to do so only if she can establish the existence of customer complaints. 
C) Franchise law prohibits such inspections because a franchisee is seen as a separate partnership. 
D) Rashi had the right to do so only if workers' compensation claims had been filed against the franchisees involved. 
E) Rashi had the right to inspect the kitchens.

Question 5

In Japan,which of the following statements is false regarding limited liability partnerships?

Accepted Answer

A) In regard to profits,Japan's limited liability partnership law requires that the members manage the business and negotiate among each other to determine how profits and losses should be distributed among individual members. 
B) Japan's limited liability partnership law places restrictions on the distribution of partnership assets. 
C) Japan's limited liability partnership law limits the liability of its members by their capital contribution. 
D) When members are establishing the rules of the limited liability partnership,Japan's limited liability partnership law requires either the agreement of all members or a majority of at least two-thirds of the members. 
E) The limited liability partnership has been recognized in Japan since the 1950s. 
A) In regard to profits,Japan's limited liability partnership law requires that the members manage the business and negotiate among each other to determine how profits and losses should be distributed among individual members. 
B) Japan's limited liability partnership law places restrictions on the distribution of partnership assets. 
C) Japan's limited liability partnership law limits the liability of its members by their capital contribution. 
D) When members are establishing the rules of the limited liability partnership,Japan's limited liability partnership law requires either the agreement of all members or a majority of at least two-thirds of the members. 
E) The limited liability partnership has been recognized in Japan since the 1950s.

Question 6

Shareholders elect the members of the board of directors of a corporation.

Accepted Answer

A) True 
 B)False

Question 7

A limited partnership consists of limited partners,but not general partners.

Accepted Answer

A) True 
 B)False

Question 8

An S corporation cannot have more than 75 shareholders.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following would be an appropriate form of business organization for Daria and her parents,such that her parents could invest but not participate in management?

Accepted Answer

A) Managed partnership 
B) Limited partnership 
C) Combined partnership 
D) General partnership 
E) Family-Based partnership 
A) Managed partnership 
B) Limited partnership 
C) Combined partnership 
D) General partnership 
E) Family-Based partnership

Question 10

Which of the following is a group that comes together for the explicit purpose of financing a specific large project?

Accepted Answer

A) A franchise 
B) An enterprise 
C) A joint venture 
D) A business trust 
E) A syndicate 
A) A franchise 
B) An enterprise 
C) A joint venture 
D) A business trust 
E) A syndicate

Question 11

Which of the following is a partnership agreement in which company members hold transferable shares,while all the goods of the company are held in the names of the partners?

Accepted Answer

A) A joint partnership 
B) A collusive partnership 
C) A collusive corporation 
D) A joint stock company 
E) A joint corporation 
A) A joint partnership 
B) A collusive partnership 
C) A collusive corporation 
D) A joint stock company 
E) A joint corporation

Question 12

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?

Accepted Answer

A) Distributorship 
B) Acknowledged standards operation 
C) Chain-style business operation 
D) Approved business franchise 
E) Manufacturing arrangement 
A) Distributorship 
B) Acknowledged standards operation 
C) Chain-style business operation 
D) Approved business franchise 
E) Manufacturing arrangement

Question 13

A limited partnership is usually not affected by the death of a limited partner.

Accepted Answer

A) True 
 B)False

Question 14

Cooperatives must be incorporated.

Accepted Answer

A) True 
 B)False

Question 15

Elias and his rich friends want to purchase a professional baseball team and need to raise a large amount of money in a short time.Which of the following forms of business organization is often used in Elias' situation?

Accepted Answer

A) Syndicate. 
B) Cooperative. 
C) Sole proprietorship. 
D) Limited Liability Partnership. 
E) Joint stock company. 
A) Syndicate. 
B) Cooperative. 
C) Sole proprietorship. 
D) Limited Liability Partnership. 
E) Joint stock company.

Question 16

Which of the following statements is true about a joint venture?

Accepted Answer

A) A joint venture is automatically terminated when one member dies. 
B) A joint venture is similar to a partnership as they are usually both created for making and selling a single product. 
C) Courts frequently apply partnership law to joint ventures. 
D) Members of a joint venture are agents of the other members. 
E) Although a formal agreement is not necessary for a partnership,it is necessary for a joint venture. 
A) A joint venture is automatically terminated when one member dies. 
B) A joint venture is similar to a partnership as they are usually both created for making and selling a single product. 
C) Courts frequently apply partnership law to joint ventures. 
D) Members of a joint venture are agents of the other members. 
E) Although a formal agreement is not necessary for a partnership,it is necessary for a joint venture.

Question 17

The president of Kool Science wants to draw up a written contract because it is unclear what type of law will be applied if there are problems.However,the president of Language Fun states that,although it is always a good idea to have a written contract,it is not necessary because partnership law will be applied if there are problems.Who is correct?

Accepted Answer

A) Language Fun's president is correct because a joint venture may be formed without drawing up a formal agreement since the parties are required to file a certificate of joint venture with the state. 
B) Language Fun's president is correct because a joint venture may be formed without drawing up a formal agreement,and courts frequently apply partnership law to joint ventures. 
C) Kool Science's president is correct because courts will not know what type of law to apply without an express written provision in a contract. 
D) Kool Science's president is correct because a formal agreement is required for a joint venture. 
E) Neither person is correct. 
A) Language Fun's president is correct because a joint venture may be formed without drawing up a formal agreement since the parties are required to file a certificate of joint venture with the state. 
B) Language Fun's president is correct because a joint venture may be formed without drawing up a formal agreement,and courts frequently apply partnership law to joint ventures. 
C) Kool Science's president is correct because courts will not know what type of law to apply without an express written provision in a contract. 
D) Kool Science's president is correct because a formal agreement is required for a joint venture. 
E) Neither person is correct.

Question 18

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory?

Accepted Answer

A) Manufacturing arrangement 
B) Chain-style business operation 
C) Approved business franchise 
D) Acknowledged standards operation 
E) Distributorship 
A) Manufacturing arrangement 
B) Chain-style business operation 
C) Approved business franchise 
D) Acknowledged standards operation 
E) Distributorship

Question 19

An LLC is considered a citizen of every state in which its members reside for purposes of jurisdiction.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a voluntary association between two or more persons who co-own a business for a profit?

Accepted Answer

A) Partnership 
B) Joint entity 
C) Joint proprietorship 
D) Joint corporation 
E) Co-owned business 
A) Partnership 
B) Joint entity 
C) Joint proprietorship 
D) Joint corporation 
E) Co-owned business

Exam 35: Forms of Business Organization

A limited partnership and a limited liability partnership refer to the same type of business organization.

When a person decides to go into business on his or her own without further formality,what do they form?

Which statement is true regarding S corporations?

Which of the following statements is true regarding Rashi's inspections of franchisees' kitchens?

In Japan,which of the following statements is false regarding limited liability partnerships?

Shareholders elect the members of the board of directors of a corporation.

A limited partnership consists of limited partners,but not general partners.

An S corporation cannot have more than 75 shareholders.

Which of the following would be an appropriate form of business organization for Daria and her parents,such that her parents could invest but not participate in management?

Which of the following is a group that comes together for the explicit purpose of financing a specific large project?

Which of the following is a partnership agreement in which company members hold transferable shares,while all the goods of the company are held in the names of the partners?

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?

A limited partnership is usually not affected by the death of a limited partner.

Cooperatives must be incorporated.

Elias and his rich friends want to purchase a professional baseball team and need to raise a large amount of money in a short time.Which of the following forms of business organization is often used in Elias' situation?

Which of the following statements is true about a joint venture?

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory?

An LLC is considered a citizen of every state in which its members reside for purposes of jurisdiction.

Which of the following is a voluntary association between two or more persons who co-own a business for a profit?

An Introduction to Dynamic Business Law

Business Ethics

The Uslegal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title,risk of Loss,and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, holder in Due Course, and Defenses

Liability, defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Partnerships: Nature, formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, officers, and Shareholders

Corporations: Mergers, consolidations, terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters