Question 1

In a ratification by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

Accepted Answer

A)  the corporation is released from liability. 
B)  the promoter is released from liability. 
C)  the promoter is made secondarily liable. 
D)  none of the above 
A)  the corporation is released from liability. 
B)  the promoter is released from liability. 
C)  the promoter is made secondarily liable. 
D)  none of the above C

Question 2

A corporation is said to have double taxation. What is meant by this statement?

Accepted Answer

A)  The corporation pays double the tax rate of individuals. 
B)  The corporation pays taxes on its income and its shareholders pay taxes on their dividends from the corporation. 
C)  both a and b 
D)  none of the above 
A)  The corporation pays double the tax rate of individuals. 
B)  The corporation pays taxes on its income and its shareholders pay taxes on their dividends from the corporation. 
C)  both a and b 
D)  none of the above B

Question 3

Limited partners can take a management role and remain limited partners.

Accepted Answer

A) True 
 B)False  False

Question 4

Pooling agreements are the same as voting trusts.

Accepted Answer

A) True 
 B)False

Question 5

John Bloomberg and Erick Ashman have been working together to earn money by doing yard work in residential areas. John collects the payments and has purchased the equipment the two use, including a lawn mower, edger, and trimmers. After deducting expenses for gasoline, repairs, and insurance, John gives one-half of the net to Erick. The two have no agreement about their relationship. Which of the following is correct?

Accepted Answer

A)  John and Erick have a general partnership. 
B)  John and Erick have a limited partnership. 
C)  John and Erick have a joint venture. 
D)  John and Erick have no business structure because they have no agreement. 
A)  John and Erick have a general partnership. 
B)  John and Erick have a limited partnership. 
C)  John and Erick have a joint venture. 
D)  John and Erick have no business structure because they have no agreement.

Question 6

A partnership can only be formed voluntarily.

Accepted Answer

A) True 
 B)False

Question 7

Limited liability partnerships are favored by accounting firms because they limit the liability of partners for the acts of the other partners.

Accepted Answer

A) True 
 B)False

Question 8

In 2012, the CEO with the highest compensation was:

Accepted Answer

A)  Lawrence Ellison 
B)  Mark Hurd 
C)  John Donahoe 
D)  none of the above 
A)  Lawrence Ellison 
B)  Mark Hurd 
C)  John Donahoe 
D)  none of the above

Question 9

An assignment of a limited partner's interest terminated the limited partnership.

Accepted Answer

A) True 
 B)False

Question 10

Pooling agreements are:

Accepted Answer

A)  illegal as against public policy. 
B)  the same as voting trusts. 
C)  valid if filed with the corporation's secretary. 
D)  none of the above 
A)  illegal as against public policy. 
B)  the same as voting trusts. 
C)  valid if filed with the corporation's secretary. 
D)  none of the above

Question 11

Which of the following activities will cause a limited partner to lose his limited liability status?

Accepted Answer

A)  being employed by the general partner as an employee 
B)  managing the firm with the general partner 
C)  consulting with or advising the general partner 
D)  All of the above will result in the loss of limited liability status. 
A)  being employed by the general partner as an employee 
B)  managing the firm with the general partner 
C)  consulting with or advising the general partner 
D)  All of the above will result in the loss of limited liability status.

Question 12

Limited partners can consult and advise with the general partner and still retain limited liability.

Accepted Answer

A) True 
 B)False

Question 13

In a novation by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

Accepted Answer

A)  the corporation is released from liability. 
B)  the promoter is released from liability. 
C)  the promoter is made secondarily liable. 
D)  none of the above 
A)  the corporation is released from liability. 
B)  the promoter is released from liability. 
C)  the promoter is made secondarily liable. 
D)  none of the above

Question 14

An S corporation is created as an LLC.

Accepted Answer

A) True 
 B)False

Question 15

AIG was not involved in the subprime mortgage debacle.

Accepted Answer

A) True 
 B)False

Question 16

There are no formal requirements for forming a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 17

Utah Light, Inc. has a takeover offer from Cal Corp. Utah Light is experiencing difficulty with earnings and its share price has dropped from $32 to $19. Cal Corp's offer is for $23 per share. Utah Light's board feels that because of pending plans and developing assets, it should not accept the offer. Must the board accept the offer?

Accepted Answer

No, the case is a classic illu

Question 18

Partners' personal assets:

Accepted Answer

A)  cannot be reached by partnership creditors. 
B)  cannot be reached by partnership creditors unless partnership assets are exhausted. 
C)  can only be reached by personal creditors. 
D)  none of the above 
A)  cannot be reached by partnership creditors. 
B)  cannot be reached by partnership creditors unless partnership assets are exhausted. 
C)  can only be reached by personal creditors. 
D)  none of the above

Question 19

A partner's interest:

Accepted Answer

A)  is the same as the partnership property. 
B)  cannot be attached by creditors. 
C)  cannot be transferred. 
D)  none of the above. 
A)  is the same as the partnership property. 
B)  cannot be attached by creditors. 
C)  cannot be transferred. 
D)  none of the above.

Question 20

Which of the following is not a method for forming a partnership?

Accepted Answer

A)  by agreement 
B)  by estoppel 
C)  by implication 
D)  by transfer 
A)  by agreement 
B)  by estoppel 
C)  by implication 
D)  by transfer

In a ratification by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

A corporation is said to have double taxation. What is meant by this statement?

Limited partners can take a management role and remain limited partners.

Pooling agreements are the same as voting trusts.

A partnership can only be formed voluntarily.

Limited liability partnerships are favored by accounting firms because they limit the liability of partners for the acts of the other partners.

In 2012, the CEO with the highest compensation was:

An assignment of a limited partner's interest terminated the limited partnership.

Pooling agreements are:

Which of the following activities will cause a limited partner to lose his limited liability status?

Limited partners can consult and advise with the general partner and still retain limited liability.

In a novation by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

An S corporation is created as an LLC.

AIG was not involved in the subprime mortgage debacle.

There are no formal requirements for forming a sole proprietorship.

Partners' personal assets:

A partner's interest:

Which of the following is not a method for forming a partnership?

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Cyberlaw, Social Media, and Privacy

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts: Performance, Remedies, and Rights

Sales: Product Advertising and Liability

Products: Business Intellectual Property

Business Competition: Antitrust

Management of Employee Conduct: Agency

Governance and Regulation: Securities Law

Management: Employee Welfare

Management: Employment Discrimination

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Exam 18: Governance and Structure: Forms of Doing Business

In a ratification by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

A corporation is said to have double taxation. What is meant by this statement?

Limited partners can take a management role and remain limited partners.

Pooling agreements are the same as voting trusts.

A partnership can only be formed voluntarily.

Limited liability partnerships are favored by accounting firms because they limit the liability of partners for the acts of the other partners.

In 2012, the CEO with the highest compensation was:

An assignment of a limited partner's interest terminated the limited partnership.

Pooling agreements are:

Which of the following activities will cause a limited partner to lose his limited liability status?

Limited partners can consult and advise with the general partner and still retain limited liability.

In a novation by the board of a pre-incorporation contract involving the corporation, the promoter, and a third party:

An S corporation is created as an LLC.

AIG was not involved in the subprime mortgage debacle.

There are no formal requirements for forming a sole proprietorship.

Partners' personal assets:

A partner's interest:

Which of the following is not a method for forming a partnership?

Introduction to Law

Business Ethics and Social Responsibility

The Judicial System

Managing Disputes: Alternative Dispute Resolution and Litigation Strategies

Business and the Constitution

Administrative Law

International Law

Business Crime

Business Torts

Cyberlaw, Social Media, and Privacy

Environmental Regulation and Sustainability

Contracts and Sales: Introduction and Formation

Contracts: Performance, Remedies, and Rights

Sales: Product Advertising and Liability

Products: Business Intellectual Property

Business Competition: Antitrust

Management of Employee Conduct: Agency

Governance and Regulation: Securities Law

Management: Employee Welfare

Management: Employment Discrimination

Filters