Question 1

Subchapter S or S Corporation shareholders have personal liability for corporate debts.

Accepted Answer

A) True 
 B)False

Question 2

Roche Holding and AstraZeneca have agreed to work together to share research data and fund joint research projects so that they can speed up the process for getting approved drugs to the market. Which of the following best describes the relationship between these two corporations?

Accepted Answer

A)  They are a partnership with full liability for the work that they do. 
B)  They have merged. 
C)  They have created a joint venture. 
D)  There is no legal business structure here. 
A)  They are a partnership with full liability for the work that they do. 
B)  They have merged. 
C)  They have created a joint venture. 
D)  There is no legal business structure here.

Question 3

Jim Braun has been a partner in a real estate investment partnership with Alicia Kaynes for 10 years. When the real estate market took a downward turn, one of their investments in a strip mall became a cash drain. Jim refused to contribute any more cash and withdrew from the partnership. Alicia was left to manage the property. Before she could sell it, Alicia had put in $125,000 into the strip mall property. Following the sale, Alicia demanded one-half of the $125,000 from Jim. Jim said he is not liable because he left the partnership.

Accepted Answer

A)  Jim is correct; he withdrew and his liability ended. 
B)  Alicia is correct; Jim owes her his share of what she paid. 
C)  Neither is correct; how much Jim owes depends on when he withdrew. 
D)  none of the above 
A)  Jim is correct; he withdrew and his liability ended. 
B)  Alicia is correct; Jim owes her his share of what she paid. 
C)  Neither is correct; how much Jim owes depends on when he withdrew. 
D)  none of the above

Question 4

Under Sarbanes-Oxley, which of the following is true?

Accepted Answer

A)  Companies must have a separate code of ethics for financial reporting. 
B)  Boards of directors are not subject to the act's provisions. 
C)  The act does not cover publicly traded companies. 
D)  both b and c 
A)  Companies must have a separate code of ethics for financial reporting. 
B)  Boards of directors are not subject to the act's provisions. 
C)  The act does not cover publicly traded companies. 
D)  both b and c

Question 5

Close corporations have less formality in their operational requirements.

Accepted Answer

A) True 
 B)False

Question 6

Shareholders generally elect the officers of the corporation.

Accepted Answer

A) True 
 B)False

Question 7

LLCs have existed in Europe and South America prior to their existence in the U.S.

Accepted Answer

A) True 
 B)False

Question 8

Owners of a limited liability company:

Accepted Answer

A)  have unlimited liability for contracts entered into by the LLC. 
B)  can transfer their membership as a personal property interest. 
C)  cannot assume any management responsibilities. 
D)  all of the above 
A)  have unlimited liability for contracts entered into by the LLC. 
B)  can transfer their membership as a personal property interest. 
C)  cannot assume any management responsibilities. 
D)  all of the above

Question 9

A copy of the voting trust must be on file in the corporate records.

Accepted Answer

A) True 
 B)False

Question 10

A merger requires a board resolution and shareholder approval.

Accepted Answer

A) True 
 B)False

Question 11

The corporate veil can be pierced for inadequate capitalization.

Accepted Answer

A) True 
 B)False

Question 12

Partners are only jointly liable for torts of other partners committed in the scope of the partnership business.

Accepted Answer

A) True 
 B)False

Question 13

Several retirement funds that own shares in News Corp., Inc., have filed suit against Rupert Murdoch, the chairman of the board and CEO of News Corp., alleging that Mr. Murdoch had the board approve the purchase of his daughter's company for $675 million. Part of the purchase deal included putting Murdoch's daughter on the News Corp. board. Which would be the best theory for recovery by the retirement funds?

Accepted Answer

A)  Insider trading 
B)  Violation of the corporate opportunity doctrine 
C)  Violation of the business judgment rule 
D)  Breach of fiduciary duty 
A)  Insider trading 
B)  Violation of the corporate opportunity doctrine 
C)  Violation of the business judgment rule 
D)  Breach of fiduciary duty

Question 14

The business judgment rule holds directors liable for:

Accepted Answer

A)  errors in business judgment. 
B)  their mistakes. 
C)  failure to obtain necessary information for making decisions. 
D)  none of the above 
A)  errors in business judgment. 
B)  their mistakes. 
C)  failure to obtain necessary information for making decisions. 
D)  none of the above

Question 15

The corporate veil can be pierced when:

Accepted Answer

A)  there is only one shareholder in the corporation. 
B)  the corporation was formed to avoid personal liability. 
C)  the corporation has only preferred stock. 
D)  none of the above 
A)  there is only one shareholder in the corporation. 
B)  the corporation was formed to avoid personal liability. 
C)  the corporation has only preferred stock. 
D)  none of the above

Question 16

Limited partnership interests are generally not transferable.

Accepted Answer

A) True 
 B)False

Question 17

Close corporations are generally publicly traded.

Accepted Answer

A) True 
 B)False

Question 18

Under Sarbanes-Oxley, current employees are not considered independent for purposes of board structure.

Accepted Answer

A) True 
 B)False

Question 19

Owners of limited liability companies enjoy pass-through treatment of income and losses.

Accepted Answer

A) True 
 B)False

Question 20

List the provisions of Sarbanes-Oxley that affect corporation governance.

Accepted Answer

The act has provisions on the structure

Subchapter S or S Corporation shareholders have personal liability for corporate debts.

Roche Holding and AstraZeneca have agreed to work together to share research data and fund joint research projects so that they can speed up the process for getting approved drugs to the market. Which of the following best describes the relationship between these two corporations?

Under Sarbanes-Oxley, which of the following is true?

Close corporations have less formality in their operational requirements.

Shareholders generally elect the officers of the corporation.

LLCs have existed in Europe and South America prior to their existence in the U.S.

Owners of a limited liability company:

A copy of the voting trust must be on file in the corporate records.

A merger requires a board resolution and shareholder approval.

The corporate veil can be pierced for inadequate capitalization.

Partners are only jointly liable for torts of other partners committed in the scope of the partnership business.

The business judgment rule holds directors liable for:

The corporate veil can be pierced when:

Limited partnership interests are generally not transferable.

Close corporations are generally publicly traded.

Under Sarbanes-Oxley, current employees are not considered independent for purposes of board structure.

Owners of limited liability companies enjoy pass-through treatment of income and losses.

List the provisions of Sarbanes-Oxley that affect corporation governance.

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

Exam 18: Governance and Structure: Forms of Doing Business

Subchapter S or S Corporation shareholders have personal liability for corporate debts.

Roche Holding and AstraZeneca have agreed to work together to share research data and fund joint research projects so that they can speed up the process for getting approved drugs to the market. Which of the following best describes the relationship between these two corporations?

Under Sarbanes-Oxley, which of the following is true?

Close corporations have less formality in their operational requirements.

Shareholders generally elect the officers of the corporation.

LLCs have existed in Europe and South America prior to their existence in the U.S.

Owners of a limited liability company:

A copy of the voting trust must be on file in the corporate records.

A merger requires a board resolution and shareholder approval.

The corporate veil can be pierced for inadequate capitalization.

Partners are only jointly liable for torts of other partners committed in the scope of the partnership business.

The business judgment rule holds directors liable for:

The corporate veil can be pierced when:

Limited partnership interests are generally not transferable.

Close corporations are generally publicly traded.

Under Sarbanes-Oxley, current employees are not considered independent for purposes of board structure.

Owners of limited liability companies enjoy pass-through treatment of income and losses.

List the provisions of Sarbanes-Oxley that affect corporation governance.

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