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100
The _____ theory suggests that a partnership is the totality of the persons engaged in a business, and not a separate entity. a. aggregate b. totality c. agency d. entity
a. aggregate
100
A director’s duties to the corporation and shareholders do not include a a. fiduciary duty. b. duty of care. c. duty to have firsthand knowledge of all business affairs of the corporation. d. duty of loyalty.
c. duty to have firsthand knowledge of all business affairs of the corporation.
100
Corporations are usually required by law to pay dividends a. in cash. b. quarterly. c. from the net earnings or surplus of the corporation. d. on the first day of every month.
c. from the net earnings or surplus of the corporation.
100
The name _____ would probably not be an acceptable corporate name. a. “ABC Furniture Rental” b. “ABC Furniture Company” c. “ABC Furniture, Inc.” d. “ABC Furniture, Incorporated”
a. “ABC Furniture Rental”
100
The primary source of business corporation law is a. the statutes of the corporation’s state of domicile. b. the Internal Revenue Code. c. common law. d. federal statutes.
a. the statutes of the corporation’s state of domicile.
200
Securities that represent loans to the corporation that must be repaid are referred to as a. equity securities. b. par value securities. c. debt securities. d. redeemable securities.
c. debt securities.
200
The method of voting that gives minority shareholders the right to cumulate their votes and increase their chances of electing a director is called a. preemptive voting rights. b. voting by ballot. c. cumulative voting. d. minority shareholder voting.
c. cumulative voting.
200
In states that have adopted full shield statutes, partners may be held personally liable for a. any debts and obligations of the partnership. b. partnership obligations incurred due to their own wrongdoing. c. no debts and obligations incurred by the partnership. d. partnership debts and obligations incurred due to the wrongdoing of other partners.
b. partnership obligations incurred due to their own wrongdoing.
200
Unanimous consent of partners is not required a. to dissolve the partnership. b. to amend the partnership agreement. c. to elect limited liability partnership status. d. to enter into transactions in the ordinary course of business.
d. to enter into transactions in the ordinary course of business.
200
In states that have adopted partial shield statutes, partners may not be held personally liable for a. any debts and obligations of the partnership. b. partnership obligations incurred due to their own wrongdoing. c. partnership debts and obligations incurred due to the wrongdoing of other partners. d. both B and C.
c. partnership debts and obligations incurred due to the wrongdoing of other partners.
300
In states that follow the Model Business Corporation Act, the _____ need not be included in the articles of incorporation. a. name of the corporation b. names and addresses of the officers of the corporation c. street address of the corporation’s initial registered office address d. number of shares the corporation is authorized to issue
b. names and addresses of the officers of the corporation
300
The agenda for a meeting of the shareholders of a corporation would not usually include a. ratification of the acts of the board of directors for the previous year. b. election of the corporation’s officers. c. election of the corporation’s directors for the upcoming year. d. amendment to the articles of incorporation.
b. election of the corporation’s officers.
300
Limited liability companies and partnerships both a. offer limited personal liability to their owners. b. can be formed by oral agreement without a written document. c. are taxed like a partnership. d. have interests that are freely transferable.
c. are taxed like a partnership.
300
The _____ of a limited partnership do not have personal liability for the debts and obligations of the limited partnership. a. partners b. limited partners c. general partners d. managing partners
b. limited partners
300
New general partners may usually be admitted to a limited partnership a. by permission of the managing partner. b. by completing an application for admission to limited partnership. c. with the unanimous written consent of all partners. d. if there is sufficient income to pay the new partner’s salary.
c. with the unanimous written consent of all partners.
400
The _____ can be filed by a partnership to give notice of the authority, or lack of authority, of certain partners. a. statement of authority b. notice of partnership authority c. partnership articles d. statement of agreement
a. statement of authority
400
Both general partnerships and limited partnerships a. must include at least one limited partner. b. must include at least one general partner. c. are formed by filing a certificate with the secretary of state. d. offer limited liability to all partners.
b. must include at least one general partner.
400
Under the Uniform Limited Partnership Act of 2001, _____ may participate in the management of the limited partnership business and have limited liability status. a. general partners b. limited partners c. limited partners and general partners d. no partners
b. limited partners
400
The partners of a limited partnership must include a. at least two general partners and two limited partners. b. at least one individual and one corporation. c. at least one general partner and one limited partner. d. at least three partners.
c. at least one general partner and one limited partner.
400
The _____ of a limited partnership do not have personal liability for the debts and obligations of the limited partnership. a. partners b. limited partners c. general partners d. managing partners
b. limited partners
500
The corporation is domiciled in the state in which a. it transacts the majority of its business. b. it holds its board of directors meetings. c. the corporation’s articles of incorporation are filed. d. the corporation’s principal office is located.
c. the corporation’s articles of incorporation are filed.
500
A stock subscription agreement does not usually include the a. subscriber’s name and address. b. name of the corporation. c. number and class of the shares subscribed to. d. rules and guidelines for the internal governance of the corporation.
d. rules and guidelines for the internal governance of the corporation.
500
Under the RULPA, limited partners do not have the right to a. assign their interests in the limited partnership. b. inspect the books and records of the limited partnership. c. vote on certain extraordinary actions taken by the limited partnership. d. participate in the management of the limited partnership.
d. participate in the management of the limited partnership.
500
A director may be personally liable for damages caused by a. his or her failure to make the correct business decision. b. his or her actions beyond the scope of the director’s duty. c. fraudulent or tortious acts committed by the others in the corporation that the director was reasonably unaware of. d. his or her failure to vote on matters that personally involve the director.
b. his or her actions beyond the scope of the director’s duty. c. fraudulent or tortious acts committed by the others in the corporation that the director was reasonably unaware of.
500
A _____ is an action brought by a limited partner on behalf of a limited partnership to recover a judgment in its favor. a. limited partnership action b. class action c. derivative action d. dissolution action
c. derivative action
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