Question 1

Explain the liability of a partner for another partner's actions.

Accepted Answer

Each partner is vicariously liable in to

Question 2

Explain under what circumstances a shareholder will not be permitted to sell his or her shares.

Accepted Answer

Closely held corporations usua

Question 3

"Partners must make clear in their partnership agreement any limitations on authority they wish to impose on each other when entering into contracts with outsiders." Discuss the accuracy of this statement.

Accepted Answer

Partners cannot limit their liability to

Question 4

Explain the limitations of the liability of partners for the acts of other partners.

Accepted Answer

Each partner has unlimited liability for

Question 5

"Partners in a limited liability partnership (LLP)are not liable for the liability of the partnership." Discuss the accuracy of this statement.

Accepted Answer

This statement is not accurate.Professio

Question 6

Where a corporation is not able to pay the debts it owes,the creditors can turn to the shareholders for payment.

Accepted Answer

A) True 
 B)False

Question 7

Joe is a shareholder of XYZ Corporation,an extremely profitable corporation in the software business,and was upset when the directors of the corporation refused to declare a dividend again,putting the money back into research and development.Joe sued,along with several other shareholders,claiming that there was no excuse for withholding dividends under these circumstances.Explain the likely outcome.

Accepted Answer

A shareholder has no

Question 8

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Accepted Answer

A) Partnership exists where two or more persons carry on business in common with a view to profit. 
B) A partnership exists only where two or more people enter into a written agreement to be partners. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists where any business is carried on with a view toward profits. 
A) Partnership exists where two or more persons carry on business in common with a view to profit. 
B) A partnership exists only where two or more people enter into a written agreement to be partners. 
C) A partnership is created where a corporation with shareholders is registered with the federal government. 
D) A partnership is only created where the partners actually share the profits from a business. 
E) A partnership exists where any business is carried on with a view toward profits.

Question 9

Mr.Malik,an investment counsellor by training,sat on the board of directors of Talbot Enterprises Ltd.,a broadly held corporation.During a meeting of the board,he advised the corporation to buy some condominiums given the present soft real estate market.Malik did not disclose that he owned shares in the corporation that owned the properties,nor did he disclose that he would be entitled to a commission for every unit he helped sell.When the question was put to the board,he voted in favour of it.Read each of the following statements separately,and indicate which is true.

Accepted Answer

A) A director must disclose his interest in a contract before the board,but is not required to refrain from voting for it. 
B) A shareholder,learning of his actions,could proceed under the dissent procedure,which would cause the corporation to buy his shares at fair market value. 
C) Malik doesn't have to disclose his interest in the contract if he has signed an agreement with the other directors relieving them of their fiduciary duties. 
D) Malik has breached his fiduciary duty,but if the sale was fair,he need not give up his profits. 
E) Malik must account for any profit made because he failed to disclose his interest and voted on the question. 
A) A director must disclose his interest in a contract before the board,but is not required to refrain from voting for it. 
B) A shareholder,learning of his actions,could proceed under the dissent procedure,which would cause the corporation to buy his shares at fair market value. 
C) Malik doesn't have to disclose his interest in the contract if he has signed an agreement with the other directors relieving them of their fiduciary duties. 
D) Malik has breached his fiduciary duty,but if the sale was fair,he need not give up his profits. 
E) Malik must account for any profit made because he failed to disclose his interest and voted on the question.

Question 10

Joe Smith owns a bookstore as a sole proprietor.He is also a partner in a hotel,which borrowed $100 000 from the bank.Which of the following statements is true?

Accepted Answer

A) The bank can look to the assets of the bookstore to pay off the debt. 
B) Although the bank can go after Smith's personal assets,it cannot go after the assets of the bookstore because the bookstore is a separate legal entity from Smith. 
C) The bank can only go after the assets of the bookstore if Smith is the actual person who negotiated the loan with the bank. 
D) The bookstore's assets will only be available to the bank if the bookstore is operated by Smith in conjunction with the hotel. 
E) Because of the concept of limited liability,Smith can lose only what he has invested in the hotel. 
A) The bank can look to the assets of the bookstore to pay off the debt. 
B) Although the bank can go after Smith's personal assets,it cannot go after the assets of the bookstore because the bookstore is a separate legal entity from Smith. 
C) The bank can only go after the assets of the bookstore if Smith is the actual person who negotiated the loan with the bank. 
D) The bookstore's assets will only be available to the bank if the bookstore is operated by Smith in conjunction with the hotel. 
E) Because of the concept of limited liability,Smith can lose only what he has invested in the hotel.

Question 11

The biggest issue for a sole proprietor is unlimited liability.

Accepted Answer

A) True 
 B)False

Question 12

Indicate the main disadvantages to incorporation.

Accepted Answer

In a closely held corporation,there are

Question 13

It is possible through a partnership agreement to create different classes of partners.

Accepted Answer

A) True 
 B)False

Question 14

Discuss the principle of limited liability,why it arises in the law governing corporations,and its significance.

Accepted Answer

This is a relatively straightforward que

Question 15

Explain what is meant by pre-emptive rights.

Accepted Answer

Depending on the legislation and the jur

Question 16

In which one of the following situations will a court find that a partnership exists?

Accepted Answer

A) Joe sells his business to Harry for $10 000 for the assets and a further $20 000 for goodwill,the goodwill portion to be paid at a rate of 20% of the profits from the business until paid. 
B) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
C) Joe and Mary promote several dances at school and split the profits. 
D) Joe,a partner in a law firm,dies and Joe's widow takes over Joe's share of the profits. 
E) Joe and Mary,while attending university,purchase a house and share the profits from the rent after deducting expenses. 
A) Joe sells his business to Harry for $10 000 for the assets and a further $20 000 for goodwill,the goodwill portion to be paid at a rate of 20% of the profits from the business until paid. 
B) Joe is a partner in a shoe store and sells his share of the business to Harry without the consent of his partner. 
C) Joe and Mary promote several dances at school and split the profits. 
D) Joe,a partner in a law firm,dies and Joe's widow takes over Joe's share of the profits. 
E) Joe and Mary,while attending university,purchase a house and share the profits from the rent after deducting expenses.

Question 17

The rights associated with preferred shares are always the same,and there is no actual right to a dividend.

Accepted Answer

A) True 
 B)False

Question 18

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Accepted Answer

A) True 
 B)False

Question 19

Based on the clarification provided by the Supreme Court of Canada in the BCE case,explain the fiduciary duty owed by directors.

Accepted Answer

The court made it clear that the duty of

Question 20

If a director fails in his duty to the corporation,what rights does a minority shareholder have to hold him accountable?

Accepted Answer

The minority shareholder can b

Explain the liability of a partner for another partner's actions.

Explain under what circumstances a shareholder will not be permitted to sell his or her shares.

"Partners must make clear in their partnership agreement any limitations on authority they wish to impose on each other when entering into contracts with outsiders." Discuss the accuracy of this statement.

Explain the limitations of the liability of partners for the acts of other partners.

"Partners in a limited liability partnership (LLP)are not liable for the liability of the partnership." Discuss the accuracy of this statement.

Where a corporation is not able to pay the debts it owes,the creditors can turn to the shareholders for payment.

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Joe Smith owns a bookstore as a sole proprietor.He is also a partner in a hotel,which borrowed $100 000 from the bank.Which of the following statements is true?

The biggest issue for a sole proprietor is unlimited liability.

Indicate the main disadvantages to incorporation.

It is possible through a partnership agreement to create different classes of partners.

Discuss the principle of limited liability,why it arises in the law governing corporations,and its significance.

Explain what is meant by pre-emptive rights.

In which one of the following situations will a court find that a partnership exists?

The rights associated with preferred shares are always the same,and there is no actual right to a dividend.

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Based on the clarification provided by the Supreme Court of Canada in the BCE case,explain the fiduciary duty owed by directors.

If a director fails in his duty to the corporation,what rights does a minority shareholder have to hold him accountable?

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Enforcing Contractual Obligations

Legislation in the Marketplace

Agency and Employment

Property

Ideas and Information

Electronic Commerce and International Trade

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Exam 7: Methods of Carrying on Business

Explain the liability of a partner for another partner's actions.

Explain under what circumstances a shareholder will not be permitted to sell his or her shares.

"Partners must make clear in their partnership agreement any limitations on authority they wish to impose on each other when entering into contracts with outsiders." Discuss the accuracy of this statement.

Explain the limitations of the liability of partners for the acts of other partners.

"Partners in a limited liability partnership (LLP)are not liable for the liability of the partnership." Discuss the accuracy of this statement.

Where a corporation is not able to pay the debts it owes,the creditors can turn to the shareholders for payment.

Which of the following is the proper definition of a partnership as set out in the Partnership Act?

Joe Smith owns a bookstore as a sole proprietor.He is also a partner in a hotel,which borrowed $100 000 from the bank.Which of the following statements is true?

The biggest issue for a sole proprietor is unlimited liability.

Indicate the main disadvantages to incorporation.

It is possible through a partnership agreement to create different classes of partners.

Discuss the principle of limited liability,why it arises in the law governing corporations,and its significance.

Explain what is meant by pre-emptive rights.

In which one of the following situations will a court find that a partnership exists?

The rights associated with preferred shares are always the same,and there is no actual right to a dividend.

Unlimited liability means that an investor can lose everything he or she has invested in a corporation.

Based on the clarification provided by the Supreme Court of Canada in the BCE case,explain the fiduciary duty owed by directors.

If a director fails in his duty to the corporation,what rights does a minority shareholder have to hold him accountable?

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Enforcing Contractual Obligations

Legislation in the Marketplace

Agency and Employment

Property

Ideas and Information

Electronic Commerce and International Trade

Filters