question

The simplest form of business is a sole proprietorship

answer

T

question

A sole proprietorship lacks continuity on the death of the proprietor,

answer

T

question

A sole proprietor has unlimited liability for all obligations that arise in doing business.

answer

T

question

The Uniform Partnership Act governs the operation of partnerships

answer

F

question

An association cannot be a partnership without an express agreement

answer

F

question

A partner's profit from a partnership is taxed as income to the firm

answer

F

question

Withdrawal from a partnership for a term prematurely does not constitute a breach of the partnership agreement

answer

F

question

Under no circumstances can a non-partner be regarded as an agent whose acts are biding on the partnership

answer

F

question

In general partnership, all partners have equal rights in managing the partnership

answer

T

question

Each partner is an agent of the partnership in carrying out the usual business of the firm

answer

F

question

A partner owes to the partnership and the other partners a duty of loyalty

answer

F

question

A partner who pursues his or her own interests automatically violates the partner's fiduciary duties to the partnership

answer

F

question

A partner always has the power and the right to dissociate from the partnership

answer

F

question

A limited liability partnership allows its partners to avoid personal liability for the malpractice of other partners

answer

T

question

In a limited partnership, a limited partner is personally liable to the partnership's creditors

answer

F

question

Limited liability companies (LLCs) are governed by state LLC statutes

answer

T

question

The liability of the members of a limited liability company is limited to the amount of their investments

answer

F

question

In many states an operating agreement is not required for a limited liability company to exist

answer

T

question

A limited liability company must be managed by non-member managers

answer

F

question

Some states provide that in the absence of an agreement to the contrary each member of a limited liability company has one vote

answer

F

question

Normally a dissociated member of a limited liability company (LLC) has the right to have his or her interest in the (LLC) bought by the other members

answer

F

question

Most limited liability company statutes have no provisions regarding member's meetings

answer

F

question

As with partnership, a court can order a limited liability company to dissolve in certain circumstances

answer

F

question

A corporate director is the owner of the corporation

answer

F

question

Normally, corporate shareholders are personally liable for the obligations of the corporation

answer

F

question

A holding company is a company whose business activity consists of holding shares in another company

answer

T

question

A close corporation cannot operate as an $ corporation

answer

T

question

When the corporate privilege is abused for personal benefit, the courts will require the owners to assume personal liability

answer

F

question

A court will not pierce the corporate veil of a corporation that is merely too thinly capitalized

answer

F

question

Common stock provides a proportionate interest in the corporation with regard to control

answer

F

question

Firms are obligated to return a principal amount per share to each holder of common stock

answer

F

question

Common stock provides a proportionate interest in the corporation with regard to net assets

answer

F

question

Preferred shares normally have a fixed maturity date on which the firm must pay them off

answer

F

question

Venture capital provided to new business ventures by professional, outside investors

answer

F

question

A merger involves the legal combination of two or more corporations, only one of which continues to exist

answer

F

question

After a consolidation there is only one surviving corporation

answer

F

question

The officers employees of each corporation involved must approve a merger

answer

F

question

In a share exchange, some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation

answer

F

question

A short form merger is the legal combination of two or more corporations online

answer

F

question

Shareholder appraisal rights do not usually extend to short form mergers

answer

F

question

Once a dissenting shareholder elects appraisal rights, the shareholder loses his or her shareholder status

answer

F

question

A corporation that is selling all of its assets most obtain approval only from its board of directors

answer

F

question

Federal securities laws strictly control the terms, duration and circumstances under which most tender offers are made

answer

F

question

Dissolution can be brought about voluntarily by the directors and shareholders of a corporation

answer

F

question

When a corporations is dissolved voluntarily, the corporation must notify its creditors of the dissolution

answer

F

question

The state can bring can action to dissolve a corporation that has failed to pay its annual taxes

answer

F

question

Corporate shareholders are the ultimate authority in every corporation

answer

F

question

In most states, a director cannot be removed from a corporation board without cause

answer

F

question

Incorporators appoint a corporation's first board of directors

answer

F

question

A director usually serves on a corporation's board for a life term

answer

F

question

An director cannot be elected by the other members of the board

answer

F

question

All directors must be present before a board can transact business

answer

F

question

A board of directors can delegate some functions to corporate officers

answer

F

question

A director is a fiduciary of a corporation

answer

F

question

Officers are required to exercise a reasonable amount of supervision over the corporate directors

answer

F

question

Corporate directors and officers are insurers of business success

answer

F

question

A director my not sit on the board of more than one corporation at a time

answer

F

question

Shareholders own a corporation

answer

F

question

Shareholders have no responsibility for the day to day management of a corporation

answer

F

question

Corporate officers and directors owe no duty to individual shareholders

answer

F

question

Shareholder's meetings do not have to occur on any regular basis

answer

F

question

To vote their shares, share holders must attend a meeting and vote in person

answer

F

question

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders vote

answer

F

question

Shareholder voting agreements are usually held to be invalid and unenforceable

answer

F

question

A preemptive right is preference over other shareholders to cast the determining vote on fundamental changes affecting the corporation

answer

F

question

A corporation cannot refuse a shareholder's request to inspect corporate records

answer

F

question

Any corporate funds are legally available for paying dividends

answer

F

question

A stock warrant is a distribution of corporate profits or income

answer

F

question

A dividend may be paid from undistributed net corporate profits

answer

F

question

Persons whose names appear in a corporation's stock book are ordinarily entitled to notice of shareholders meetings and the right to vote

answer

F

question

Shares issued for more than their fair market value are known as watered stock

answer

F

question

The least common forms of securities are bonds issued by corporations

answer

F

question

A registration statement must include a financial statement certified by an independent public accounting firm

answer

F

question

A registration statement must state how a corporation plans to use the proceeds from the sale of the securities

answer

F

question

Sales of securities must occur within five days of registration

answer

F

question

Generally, stock offerings that are made in a limited manner during any twelve month period are not exempt from the registration requirement

answer

F

question

A free writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement

answer

F

question

Before filling a registration statement, an issuer must offer to sell securities

answer

F

question

A corporation whose security does not qualify for an exemption can avoid the cost and complexity associated with registration

answer

F

question

Generally stock offerings that involve a small dollar amount are exempt from the registration requirement

answer

F

question

Private offerings of securities in unlimited amounts can be exempt from the registration requirement of the Securities Act of 1933

answer

F

question

Few securities can be resold without registration

answer

F

question

Securities that are exempt from the registration requirement can generally be solid and resold without being registered

answer

F

question

Willful violations of the Securities Act of 1933 may be subject to criminal prosecution

answer

F

question

Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense

answer

F

business law 1 finals – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards