Question 1

Which of the following is a relationship between two or more persons or corporations created for a specific business undertaking?

Accepted Answer

A)  A franchise
B)  A business trust
C)  A syndicate
D)  A joint venture
E)  An enterpriseF) A) and D)
G) A) and E)

Question 2

Which statement is true regarding corporations?

Accepted Answer

A)  A corporation may not be sued.
B)  A corporation is created according to federal law.
C)  A corporation is not a separate legal entity.
D)  The corporation must pay taxes on profits,and shareholders must pay taxes on dividends they receive from the corporation.
E)  Shareholders may typically be held liable for debts of the corporation.F) A) and B)
G) C) and D)

Question 3

A partnership in which the partners share management responsibilities equally,but some partners are limited in regards to the amount of profit distribution to which they are entitled is an example of a limited partnership.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct about the requirements of an LLP?

Accepted Answer

A)  The business name must include the phrase Limited Liability Partnership or an abbreviation of the phrase,and the parties must file a form with the secretary of the state.
B)  The parties must execute a Partnership Agreement identifying itself with the phrase Limited Liability Partnership or an abbreviation of the phrase,and the parties must file a form with the secretary of the state.
C)  The business name must include the phrase Limited Liability Partnership or an abbreviation of the phrase,and the parties must execute a Partnership Agreement.
D)  The business name must include the phrase Limited Liability Partnership or an abbreviation of the phrase,the parties must execute a Partnership Agreement,and the parties must file a form with the secretary of the state.
E)  The parties only need to file a form with the secretary of the state.F) A) and E)
G) B) and E)

Question 5

When one of the members dies,a joint venture is not automatically terminated.

Accepted Answer

A) True 
 B)False

Question 6

What is the term used for the process under which an LLC must register in every additional state in which it intends to operate?

Accepted Answer

A)  Qualification.
B)  Organization.
C)  Registration.
D)  Incorporation.
E)  Approval.F) A) and B)
G) C) and D)

Question 7

What is the correct term for an organization formed by individuals who usually pool their resources to market products?

Accepted Answer

A)  A cooperative
B)  A consortium
C)  A corporation
D)  An enterprise
E)  A universeF) B) and E)
G) C) and D)

Question 8

A sole proprietor is considered a separate legal entity.

Accepted Answer

A) True 
 B)False

Question 9

Who is responsible for running the day-to-day business of a corporation?

Accepted Answer

A)  Administrators
B)  Members of the board of directors
C)  Shareholders
D)  Investors
E)  OfficersF) B) and D)
G) A) and E)

Question 10

In China,which of the following is defined as "an organization which possesses civil legal capacity for civil acts and which,according to the law,independently enjoys civil rights and assumes civil obligations"?

Accepted Answer

A)  Legal person
B)  Public entity
C)  Public organization
D)  Civil organization
E)  Legal corporationF) None of the above
G) B) and E)

Question 11

Which of the following statements is false regarding limited liability companies?

Accepted Answer

A)  Owners of an LLC are referred to as incorporators.
B)  Limited liability companies have the limited liability of corporations yet may be taxed like partnerships.
C)  Members need not be citizens of the U.S.
D)  For purposes of jurisdiction,an LLC is considered a citizen of every state in which its members reside.
E)  A limited liability company is formed by filing articles of organization in the state in which members want to establish their LLC.F) A) and B)
G) None of the above

Question 12

Does the president of Kool Science have the authority to sign a contract with a supplier on behalf of Language Fun for the language-science kits?

Accepted Answer

A)  No,because they first need to file a certificate of authority with the state.
B)  No,because he is not an agent of Language Fun.
C)  No,unless they have already filed articles of organization with the state.
D)  Yes,because members of a joint venture have greater authority as general partners.
E)  Yes,because members of a joint venture have the same authority as general partners.F) B) and D)
G) B) and C)

Question 13

List the advantages and disadvantages of forming a general corporation.

Accepted Answer

The advantages are 1)limited l...

Question 14

Which kind of organization would likely be formed by farmers who want to pool certain crops to ensure that they obtain a high market price for their crops?

Accepted Answer

A)  A business trust
B)  A syndicate
C)  A cooperative
D)  A joint stock company
E)  A joint ventureF) B) and D)
G) All of the above

Question 15

Which of the following partnerships is distinguishable from other forms of partnership because the partners' liability for professional malpractice is limited to the partnership?

Accepted Answer

A)  Limited liability partnership
B)  Loss limiting partnership
C)  Professional partnership
D)  Limited partnership
E)  General partnershipF) B) and D)
G) B) and C)

Question 16

In Mary Kay Inc. ,v.Janet Isbell,the case in the text involving whether the defendant's franchise was wrongfully terminated,what was the result?

Accepted Answer

A)  That under federal law,no franchise existed.
B)  That under state law a franchise existed;but that under applicable law,the franchise was not wrongfully terminated.
C)  That under federal law a franchise existed;but that under applicable law,the franchise was not wrongfully terminated.
D)  That under state law a franchise existed that was wrongfully terminated.
E)  That under state law,no franchise existed.F) C) and E)
G) D) and E)

Question 17

Kendra and Amelia operate an art gallery,owned as a partnership.Kendra disappeared.A few days later,Amelia learned that Kendra embezzled $75,000 of government grant money through the company.Is Amelia responsible for the $75,000?

Accepted Answer

A)  Yes,because Amelia and Kendra are partners.
B)  Yes,but only if Amelia was aware of the embezzlement.
C)  No,because the embezzlement was done by Kendra.
D)  Yes,but only to the extent of Amelia's investment into the partnership.
E)  No,because partners are not responsible for the wrongful acts of other partners.F) D) and E)
G) A) and D)

Question 18

What is the correct term for the investor-owners of a corporation?

Accepted Answer

A)  Shareholders
B)  Limited partners
C)  Profit owners
D)  Profit and loss owners
E)  Approved investorsF) None of the above
G) A) and E)

Question 19

Is André correct in his assertion that by sharing control of the business and splitting profits equally there could be no personal liability for debts?

Accepted Answer

A)  Yes,because so long as they have nothing in writing,their arrangement will be considered a joint venture.
B)  Yes,he is correct so long as they do not reach an agreement in writing.
C)  No,he is incorrect.
D)  Yes,so long as they sign no contracts by which they agree to be personally liable.
E)  Yes,because they will be considered a partnership regardless of whether any agreement is in writing.F) A) and B)
G) A) and E)

Question 20

In the absence of an express agreement,which act governs partnerships in most states?

Accepted Answer

A)  The Joint Partnership Act
B)  The Uniform Partnership Act
C)  The Uniform Joint Agreement Act
D)  The Joint Agreement Act
E)  The Associated Partnership ActF) A) and B)
G) A) and E)

Exam 35: Forms of Business Organization

A sole proprietor is considered a separate legal entity.

Correct AnswerverifiedShow Answer

When one of the members dies,a joint venture is not automatically terminated.

Correct AnswerverifiedShow Answer

What is the correct term for an organization formed by individuals who usually pool their resources to market products?

Correct AnswerverifiedShow Answer

Is André correct in his assertion that by sharing control of the business and splitting profits equally there could be no personal liability for debts?

Correct AnswerverifiedShow Answer

Which of the following statements is false regarding limited liability companies?

Correct AnswerverifiedShow Answer

In China,which of the following is defined as "an organization which possesses civil legal capacity for civil acts and which,according to the law,independently enjoys civil rights and assumes civil obligations"?

Correct AnswerverifiedShow Answer

Which statement is true regarding corporations?

Correct AnswerverifiedShow Answer

In the absence of an express agreement,which act governs partnerships in most states?

Correct AnswerverifiedShow Answer

Which kind of organization would likely be formed by farmers who want to pool certain crops to ensure that they obtain a high market price for their crops?

Correct AnswerverifiedShow Answer

What is the term used for the process under which an LLC must register in every additional state in which it intends to operate?

Correct AnswerverifiedShow Answer

In Mary Kay Inc. ,v.Janet Isbell,the case in the text involving whether the defendant's franchise was wrongfully terminated,what was the result?

Correct AnswerverifiedShow Answer

Which of the following is a relationship between two or more persons or corporations created for a specific business undertaking?

Correct AnswerverifiedShow Answer

Which of the following partnerships is distinguishable from other forms of partnership because the partners' liability for professional malpractice is limited to the partnership?

Correct AnswerverifiedShow Answer

Which of the following statements is correct about the requirements of an LLP?

Correct AnswerverifiedShow Answer

Kendra and Amelia operate an art gallery,owned as a partnership.Kendra disappeared.A few days later,Amelia learned that Kendra embezzled $75,000 of government grant money through the company.Is Amelia responsible for the $75,000?

Correct AnswerverifiedShow Answer

List the advantages and disadvantages of forming a general corporation.

Correct AnswerverifiedThe advantages are 1)limited l...View AnswerShow Answer

Who is responsible for running the day-to-day business of a corporation?

Correct AnswerverifiedShow Answer

What is the correct term for the investor-owners of a corporation?

Correct AnswerverifiedShow Answer

A partnership in which the partners share management responsibilities equally,but some partners are limited in regards to the amount of profit distribution to which they are entitled is an example of a limited partnership.

Correct AnswerverifiedShow Answer

Does the president of Kool Science have the authority to sign a contract with a supplier on behalf of Language Fun for the language-science kits?

Correct AnswerverifiedShow Answer

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The advantages are 1)limited l...
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