BUS 346 Week 7 Quiz

BUS 346 Week 7 Quiz | Assignment Help | Mercer University

Exam 7: Chapter 11

Question

In a limited liability partnership, a partner is personally liable for the malpractice of other partners.

o   True

o   False

Question 2

A limited liability company is operated in compliance with state law.

o   True

o   False

Question 3

Bonds represent the borrowing of funds by firms.

o   True

o   False

Question 4

The federal government regulates franchising through laws that apply to specific industries.

o   True

o   False

Question 5

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

o   True

o   False

Question 6

The Revised Model Business Corporation Act gives a close corporation less flexibility in determining its rules of operation.

o   True

o   False

Question 7

In choosing a form of business organization for a new enterprise, important factors include the liability of the owner.

o   True

o   False

Question 8

A limited partner has every right to participate in the management and operation of a limited partnership.

o   True

o   False

Question 9

Shareholders must approve fundamental changes affecting the corporation before the changes can be implemented.

o   True

o   False

Question 10

The franchise relationship is defined by a contract.

o   True

o   False

Question 11

Directors have a right to participate in all board of directors’ meetings.

o   True

o   False

Question 12

In a limited partnership, a limited partner has full responsibility for the partnership and for all its debts.

o   True

o   False

Question 13

The primary document needed to incorporate a business is the articles of incorporation.

o   True

o   False

Question 14

In choosing a form of business organization for a new enterprise, important factors include the ease of creation.

o   True

o   False

Question 15

Good faith and fair dealing are important in terminating a franchise relationship.

o   True

o   False

Question 16

Foreign investors cannot participate in a limited liability company.

o   True

o   False

Question 17

Express powers of a corporation are found in its articles of incorporation.

o   True

o   False

Question 18

Before shareholders can bring a derivative suit, they must submit a written demand to the corporation, asking the board of directors to take action.

o   True

o   False

Question 19

Partners are subject to personal liability for partnership obligations.

o   True

o   False

Question 20

Shareholders are personally liable for the debts of a corporation.

o   True

o   False

Question 21

Greta is a member of Hovercraft LLC. As a member, Greta is

o   a manager or officer, but not an owner.

o   an investor, but not a manager, officer, or owner.

o   an owner.

o   a participant, but not an investor, manager, officer, or owner.

Question 22

Tumble Gymnastics & Karate, Inc., grants a franchise to Stefan to operate a Tumble gym. Tumble may require Stefan to pay the franchisor a percentage of the business’s

o   annual sales or volume.

o   weekly payroll expense.

o   monthly overhead savings.

o   none of the choices.

Question 23

Zero Sum Games Corporation has forty-three shareholders. The minimum number that must be present at a meeting for a shareholders’ vote is

o   all of the shareholders

o   a quorum.

o   a proxy.

o   three of the shareholders.

Question 24

Naomi and Ogden are shareholders of MediCare Residences, Inc. As shareholders, they must approve

o   conducting a merger.

o   deciding to pursue new business opportunities.

o   terminating a managerial employee.

o   negotiating a contract between management and labor.

Question 25

Sophie and Tiny incorporate their beverage-container business as U-Twist Products, Inc. The first board of directors may be appointed by the firm’s

o   board of directors.

o   incorporates.

o   officers.

o   shareholders.

Question 26

Qatar Global Investments is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

o   act as a creditor, but cannot otherwise invest or participate.

o   become a member.

o   not become a member, but can participate in its operations.

o   not become a member or otherwise participate in its operations.

Question 27

Heidi and Ian are directors and shareholders of Globe Software, Inc. Heidi’s written authorization to Ian to vote Heidi’s shares at a Globe shareholders’ meeting is

o   a close corporation.

o   a fiduciary.

o   a proxy.

o   a quorum.

Question 28

Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Kirby owes fiduciary duties to

o   Jumpstart and its members.

o   Jumpstart’s suppliers.

o   Jumpstart’s customers.

o   all of the choices.

Question 29

Ruby Red Restaurant Corporation is incorporated in South Carolina. In that state, Ruby Red is

o   a domestic corporation.

o   a foreign corporation.

o   an alien corporation.

o   a de jure corporation.

Question 30

Gladys is a shareholder of Frozen Yogurt, Inc. As a shareholder, Gladys must approve

o   amending the bylaws.

o   declaring a corporate dividend.

o   hiring a chief executive officer.

o   issuing additional shares.

Question 31

Ed, Jon, and Phoebe do business as Reliable Movers. Phoebe develops a debilitating illness and can no longer work. Phoebe

o   may dissociate from the partnership.

o   may not dissociate from the partnership without Ed and Jon’s consent.

o   must pay damages to Ed and Jon for the loss of her work.

o   may terminate the partnership.

Question 32

FreezE Yogurt Corporation provides its prospective franchisees with projected earnings figures based on actual data. FreezE Yogurt must also disclose

o   the number and percentage of franchisees that achieved the figures.

o   hypothetical examples of potential earnings.

o   an answer to the entrepreneur’s question, “How much will I make?”

o   none of the choices.

Question 33

Like the bylaws of other corporations, the bylaws of Farmland Equipment, Inc.,

o   establish the operating name of the corporation.

o   establish the value and classes of corporate stock.

o   were adopted at its first organizational meeting.

o   were submitted for approval to the public official in charge.

Question 34

Farm2Fork, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as

o   a corporation.

o   a partnership.

o   a sole proprietorship.

o   a franchise.

Question 35

Wild & Scenic River Tours, Inc., is a corporation. Wild & Scenic has the implied power to

o   issue stocks and bonds.

o   execute contracts and negotiable instruments.

o   buy and sell (or lease) property.

o   perform all acts reasonably appropriate and necessary to accomplish its corporate purposes.

Question 36

Niki owns O.K. Oil Corporation. Niki uses O.K.’s funds to pay her personal expenses, creates Pure Fuel Corporation to engage in the same business as O.K., transfers O.K.’s assets to Pure Fuel, and petitions O.K. into bankruptcy. This most likely warrants

o   a bonus to Niki for financial manoeuvres.

o   a discharge for O.K. in bankruptcy.

o   a pierce of O.K.’s corporate veil.

o   a review of Pure Fuel’s articles of incorporation.

Question 37

Sylvester buys a franchise from Resistance Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by

o   contract law.

o   no law.

o   the Franchise Disclosure Document, or FDD.

o   the Uniform Commercial Code.

Question 38

Reba is a director of Quantum Mechanix Corporation. Reba’s rights, as a director, do not include a right to

o   indemnification.

o   inspection.

o   participation.

o   self-dealing.

Question 39

Skyla and Terry want to form and do business as Unbound Games Corporation. Most statutes governing the formation and use of corporations are guided by

o   city or county corporate codes.

o   the Entrepreneur’s Corporate Handbook.

o   the federal Administrative Procedure Act.

o   the Revised Model Business Corporation Act.

Question 40

Leigh wants to go into the business of construction contracting. Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be

o   its greater organizational flexibility.

o   its limited liability.

o   its perpetual existence.

o   the ease of transferring the business to other family members.