Question 1

Partners are responsible for the debts and obligations of the partnership.With respect to contracts,each partner is considered to be:

Accepted Answer

A) the primarily liable party if the partner takes on the role of agent. 
B) a principal of any contract entered into by an employee of the partnership. 
C) an agent of the other partners so that any contract entered into by one partner with respect to the partnership business is binding on them all. 
D) an agent of the partnership only so that any contract entered into by one partner only binds the partnership entity itself and not the other partners. 
E) liable only for his or her capital investment should a breach of contract occur.

Question 2

Explain how the principle of fiduciary duty works in a partnership relationship.

Accepted Answer

The answer of Explain how the principle of fiduciary duty...

Question 3

Jones is a partner in a law firm in a small town,and he is also doing legal work out of his home in the evenings for himself.Explain the rights of his partners in this situation.

Accepted Answer

The answer of Jones is a partner in a law...

Question 4

Which of the following is incorrect with respect to the creation of a partnership?

Accepted Answer

A) A partnership can only be created with the consent of the parties. 
B) The duties and obligations of partners to each other can be modified by agreement. 
C) The business activity must be continuing in order for it to indicate the existence of a partnership. 
D) The common method of creating a partnership is by agreement. 
E) An important indication as to whether a partnership exists is the sharing of the profits of the business activity.

Question 5

"For a partnership to exist,the parties must have consented to its creation." Comment on the accuracy of this statement.

Accepted Answer

The answer of "For a partnership to exist,the parties must...

Question 6

Directors owe a fiduciary duty to the public.

Accepted Answer

A) True 
 B)False

Question 7

John Hollin was an officer,director,and employee of a large broadly held corporation.At a directors meeting,he learned that the corporation was voting on a resolution to buy a piece of property from Sam Keanu for $100 000.It so happens that Hollin is one of three co-owners of that property.Hollin voted for the purchase and the resolution passed without discussion by a vote of 5-0.Several months after completion of the purchase,the other directors learned of Hollin's ownership and called on him to account to the corporation for any profit made.Which of the following is false?

Accepted Answer

A) Hollin should have disclosed his interest and refrained from voting or otherwise influencing the decision. 
B) Hollin owed a fiduciary duty to the corporation and breached that duty by his actions. 
C) Hollin must account for any profit made because he failed to disclose his interest and voted on the question. 
D) If the directors failed to take action,the shareholders could have brought an action on behalf of the corporation against Hollin. 
E) The shareholders could proceed under the dissent procedure and force the corporation to buy them out.

Question 8

When two people enter into a partnership by agreement but neglect to set out the terms of such agreement,or where the parties becomes partners inadvertently,where are the terms and arrangements of that partnership set out?

Accepted Answer

The answer of When two people enter into a partnership...

Question 9

Joe entered into partnership with two others in the establishment of a real estate sales agency.The other two,Sam and Harry,had considerable experience in the real estate business but no money.Joe,on the other hand,had his own home and several significant assets,and although he didn't have any experience in the real estate business,his monetary contribution made him an equal partner with Sam and Harry.Unfortunately,Harry misused some trust funds that had come into his care as a result of business,investing them in the business of one of his sons rather than in an interest-bearing account.The business of the son went sour and the money was lost.The client sued Harry,Sam,and Joe.Explain the legal position of Joe here.

Accepted Answer

The answer of Joe entered into partnership with two others...

Question 10

Preferred shareholders usually get preference when dividends are declared,but receive no vote.

Accepted Answer

A) True 
 B)False

Question 11

Discuss and contrast the various methods of financing a corporation.Deal with the advantages and disadvantages of each.

Accepted Answer

The answer of Discuss and contrast the various methods of...

Question 12

To protect directors from exposure to personal liability in the case of violations of statutes related to the environment and competition,corporations often include terms in the directors' contracts that provide indemnification for losses they incur and legal expenses associated with involvement in these types of actions.

Accepted Answer

A) True 
 B)False

Question 13

A secured creditor has first claim against assets used as security.

Accepted Answer

A) True 
 B)False

Question 14

An example of estoppel is when a person allows himself or herself to be called a partner.

Accepted Answer

A) True 
 B)False

Question 15

Explain under what circumstances a shareholder's right to sue against oppression arises.

Accepted Answer

The answer of Explain under what circumstances a shareholder's right...

Question 16

Descrive the advantages offered in a franchise arrangement to the franchisor.

Accepted Answer

The answer of Descrive the advantages offered in a franchise...

Question 17

Where a corporation borrows money,only the corporation is responsible for that debt,not the shareholders.

Accepted Answer

A) True 
 B)False

Question 18

With regard to the law of corporations,which of the following is true?

Accepted Answer

A) A director of a corporation could not be personally liable on a promissory note even if he just signed his own name,as long as at the time he had intended to sign on behalf of the corporation. 
B) If a minority shareholder is treated unfairly,the appropriate relief to request is that the court "lift the corporate veil." 
C) In many jurisdictions,pre-emptive rights entitle a shareholder to pass on her right to vote to someone else. 
D) "Relief-from-oppression" provisions allow a party who has contracted with the corporation to force the corporation to honour a contract it has signed in an irregular manner. 
E) A creditor of a corporation could sue for some remedy if the directors of the corporation voted for a resolution to pay a dividend when the corporation was insolvent.

Question 19

Indicate three advantages to incorporation.

Accepted Answer

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Question 20

Which of the following is considered to be a separate legal person in law?

Accepted Answer

A) a corporation 
B) a sole proprietorship 
C) an agency 
D) a partnership 
E) a professional practice

Exam 7: Methods of Carrying on Business

Partners are responsible for the debts and obligations of the partnership.With respect to contracts,each partner is considered to be:

Explain how the principle of fiduciary duty works in a partnership relationship.

Jones is a partner in a law firm in a small town,and he is also doing legal work out of his home in the evenings for himself.Explain the rights of his partners in this situation.

Which of the following is incorrect with respect to the creation of a partnership?

"For a partnership to exist,the parties must have consented to its creation." Comment on the accuracy of this statement.

Directors owe a fiduciary duty to the public.

When two people enter into a partnership by agreement but neglect to set out the terms of such agreement,or where the parties becomes partners inadvertently,where are the terms and arrangements of that partnership set out?

Preferred shareholders usually get preference when dividends are declared,but receive no vote.

Discuss and contrast the various methods of financing a corporation.Deal with the advantages and disadvantages of each.

A secured creditor has first claim against assets used as security.

An example of estoppel is when a person allows himself or herself to be called a partner.

Explain under what circumstances a shareholder's right to sue against oppression arises.

Descrive the advantages offered in a franchise arrangement to the franchisor.

Where a corporation borrows money,only the corporation is responsible for that debt,not the shareholders.

With regard to the law of corporations,which of the following is true?

Indicate three advantages to incorporation.

Which of the following is considered to be a separate legal person in law?