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1. Twisted Dipsy Pretzels Inc. offers entrepreneurs the opportunity to
operate a franchise under the Twisted Dipsy trade name as a member
of a select group of dealers that engage in the retail pretzel-concession
business. To potential investors, Twisted Dipsy makes earnings claims.
For those claims, the franchisor must have
a. a hypothetical basis.
b. a reasonable basis.
c. an actual basis.
d. no basis.
1. Kirby is a manager of Jumpstart Fitness LLC, a limited liability
company. Jumpstart is formed in a state that imposes fiduciary duties on LLC
managers. Kirby owes these duties to
a. Jumpstart’s members.
b. Jumpstart’s suppliers.
c. Jumpstart’s customers.
d. none of the choices.
1. Beyond Gamez, Inc., a video game retailer based in California, does
business in all fifty states exclusively online. According to New York
state tax law, an out-of-state online retailer must collect and remit state
taxes to New York if the retailer
a. plans to establish a substantial physical presence in New York.
b. targets a potential marketing base in New York.
c. maintains a Web site accessible in New York.
d. pays a party within New York to solicit business for its products.
1. Logan is a director for Metal Masters Company. Ordinarily, Logan
owes fiduciary duties only to
a. himself.
b. Metal Masters’s creditors.
c. Metal Masters’s personnel.
d. Metal Masters’s shareholders.
1. Home & Hearth, Inc., is a close corporation owned by Iona, Jamon,
and Kleo, who are siblings. Each shareholder is also a director and
officer. When the family disagrees over how to operate Home & Hearth,
Jamon and Kleo vote to oust Iona from her position as Home &
Hearth’s president. Iona files a suit against the others, alleging a
breach of fiduciary duty. The court may order Jamon and Kleo to
a. buy Iona’s shares.
b. sell Iona’s shares publicly.
c. sell Jamon and Kleo’s shares publicly.
d. sell Jamon and Kleo’s shares to Iona.
