Question 1

New members are admitted to an LLC only with approval by a majority of existing members.

Accepted Answer

A) True 
 B)False

Question 2

Partners' personal assets can be reached by partnership creditors.

Accepted Answer

A) True 
 B)False

Question 3

What conduct will cost a limited partner his/her limited liability status?

Accepted Answer

A)  engaging in the management of the business 
B)  allowing his/her name to be used in the business name 
C)  failure to file the limited partnership agreement 
D)  All of the above will result in a loss of limited liability status. 
A)  engaging in the management of the business 
B)  allowing his/her name to be used in the business name 
C)  failure to file the limited partnership agreement 
D)  All of the above will result in a loss of limited liability status.

Question 4

A Subchapter S or S Corporation is:

Accepted Answer

A)  a special class of close corporation under the MBCA. 
B)  an IRS tax treatment option for corporations owned by a limited number of shareholders. 
C)  a not-for-profit corporation. 
D)  none of the above 
A)  a special class of close corporation under the MBCA. 
B)  an IRS tax treatment option for corporations owned by a limited number of shareholders. 
C)  a not-for-profit corporation. 
D)  none of the above

Question 5

When shareholders get to vote on executive compensation it is referred to as what?

Accepted Answer

A)  Pay-to-play 
B)  Say-on-pay 
C)  Day-of-pay 
D)  Play-on-payday 
A)  Pay-to-play 
B)  Say-on-pay 
C)  Day-of-pay 
D)  Play-on-payday

Question 6

Under Sarbanes-Oxley, the majority of members of the audit committee must be independent directors.

Accepted Answer

A) True 
 B)False

Question 7

Ann Archer purchased shares from XYZ Corp. for $10. The par value of the shares is $5. What is the amount of water per share in the shares?

Accepted Answer

A)  $0 
B)  $5 
C)  $10 
D)  $1 
A)  $0 
B)  $5 
C)  $10 
D)  $1

Question 8

The corporate opportunity doctrine requires directors to first present related business opportunities to the corporation.

Accepted Answer

A) True 
 B)False

Question 9

A partnership by estoppel:

Accepted Answer

A)  is the same as a partnership by implication. 
B)  results when third parties are led to believe a partnership exists. 
C)  is the same as a joint venture. 
D)  none of the above 
A)  is the same as a partnership by implication. 
B)  results when third parties are led to believe a partnership exists. 
C)  is the same as a joint venture. 
D)  none of the above

Question 10

Enron's off­the­book financings consisted mostly of LLCs and LLPs.

Accepted Answer

A) True 
 B)False

Question 11

Limited partners' profits and losses are allocated equally.

Accepted Answer

A) True 
 B)False

Question 12

For income tax purposes, a partnership:

Accepted Answer

A)  files a return and pays taxes. 
B)  is an entity. 
C)  has no taxes. 
D)  none of the above 
A)  files a return and pays taxes. 
B)  is an entity. 
C)  has no taxes. 
D)  none of the above

Question 13

Any shareholder can demand access to the corporate books and records.

Accepted Answer

A) True 
 B)False

Question 14

The shareholders of Beazer Homes USA filed suit against the directors for the compensation plan that the Board approved for officers that provided the officers with bonuses despite the losses the company experienced and the continuing declines in sales of homes. Which of the following is correct about the suit?

Accepted Answer

A)  Shareholders are not permitted to sue their own directors. 
B)  Absent fraud or illegality, the shareholders have no rights against the directors. 
C)  The shareholders will need to establish a violation of the business judgment rule. 
D)  Unless the shareholders were harmed directly, they have no right to bring suit or recover. 
A)  Shareholders are not permitted to sue their own directors. 
B)  Absent fraud or illegality, the shareholders have no rights against the directors. 
C)  The shareholders will need to establish a violation of the business judgment rule. 
D)  Unless the shareholders were harmed directly, they have no right to bring suit or recover.

Question 15

Discuss CEO concerns regarding CEO compensation.

Accepted Answer

The main concerns are the following: mic

Question 16

The statutory agent is the party who will be served with lawsuits against the corporation.

Accepted Answer

A) True 
 B)False

Question 17

Boards cannot rely on outside experts in decision making.

Accepted Answer

A) True 
 B)False

Question 18

A corporate dissolution:

Accepted Answer

A)  cannot result from an agreement. 
B)  results when a corporation does not hold an annual meeting. 
C)  can begin with a board resolution. 
D)  none of the above 
A)  cannot result from an agreement. 
B)  results when a corporation does not hold an annual meeting. 
C)  can begin with a board resolution. 
D)  none of the above

Question 19

Members of limited liability companies have no right to vote on who should manage their companies.

Accepted Answer

A) True 
 B)False

Question 20

The directors of Kmart, Inc. voted several years ago to approve a new marketing plan that involved endorsements by Martha Stewart of Kmart home products such as linens, paint and decorations. Marketing studies have shown that Martha Stewart was not the right match for endorsements for Kmart's customer base. Kmart is now in Chapter 11 bankruptcy. Its shareholders believe the Martha Stewart decision was the cause of the company's demise.

Accepted Answer

A)  The shareholders have a cause of action against the directors for violation of the business judgment rule. 
B)  The shareholders have a cause of action against the directors for violation of the corporate opportunity doctrine. 
C)  The shareholders can have the court order the directors removed for cause. 
D)  The directors of Kmart are protected under the business judgment rule. 
E)  none of the above 
A)  The shareholders have a cause of action against the directors for violation of the business judgment rule. 
B)  The shareholders have a cause of action against the directors for violation of the corporate opportunity doctrine. 
C)  The shareholders can have the court order the directors removed for cause. 
D)  The directors of Kmart are protected under the business judgment rule. 
E)  none of the above

New members are admitted to an LLC only with approval by a majority of existing members.

Partners' personal assets can be reached by partnership creditors.

What conduct will cost a limited partner his/her limited liability status?

A Subchapter S or S Corporation is:

When shareholders get to vote on executive compensation it is referred to as what?

Under Sarbanes-Oxley, the majority of members of the audit committee must be independent directors.

Ann Archer purchased shares from XYZ Corp. for $10. The par value of the shares is $5. What is the amount of water per share in the shares?

The corporate opportunity doctrine requires directors to first present related business opportunities to the corporation.

A partnership by estoppel:

Enron's offthebook financings consisted mostly of LLCs and LLPs.

Limited partners' profits and losses are allocated equally.

For income tax purposes, a partnership:

Any shareholder can demand access to the corporate books and records.

Discuss CEO concerns regarding CEO compensation.

The statutory agent is the party who will be served with lawsuits against the corporation.

Boards cannot rely on outside experts in decision making.

A corporate dissolution:

Members of limited liability companies have no right to vote on who should manage their companies.

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

New members are admitted to an LLC only with approval by a majority of existing members.

Partners' personal assets can be reached by partnership creditors.

What conduct will cost a limited partner his/her limited liability status?

A Subchapter S or S Corporation is:

When shareholders get to vote on executive compensation it is referred to as what?

Under Sarbanes-Oxley, the majority of members of the audit committee must be independent directors.

Ann Archer purchased shares from XYZ Corp. for $10. The par value of the shares is $5. What is the amount of water per share in the shares?

The corporate opportunity doctrine requires directors to first present related business opportunities to the corporation.

A partnership by estoppel:

Enron's off­the­book financings consisted mostly of LLCs and LLPs.

Limited partners' profits and losses are allocated equally.

For income tax purposes, a partnership:

Any shareholder can demand access to the corporate books and records.

Discuss CEO concerns regarding CEO compensation.

The statutory agent is the party who will be served with lawsuits against the corporation.

Boards cannot rely on outside experts in decision making.

A corporate dissolution:

Members of limited liability companies have no right to vote on who should manage their companies.

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

Enron's offthebook financings consisted mostly of LLCs and LLPs.