It is not necessary for a limited partnership to have general partners if the limited
partners share management responsibility among themselves.
The concept of federal law taking precedence over state or local law is called the
preemption doctrine.
The highest court in the land is the Supreme Court of the United States, which is
located in Washington DC.
In a processing plant franchise, the franchisor licenses the franchisee to make and sell
its products or services to the public from a retail outlet serving an exclusive
geographical territory.
The UCITA does not become law until a state’s legislature enacts it as a state statute.
Corporations are permitted to become general partners to a limited partnership.
________ requires that any profits made by a statutory insider on transactions involving
short-swing profits belong to the corporation.
A) Section 5 of the Securities Act of 1933
B) Section 12 of the Securities Act of 1933
C) Section 16(b) of the Securities Exchange Act of 1934
D) SEC Rule 10b-5
A person or corporation that is empowered to accept service of process on behalf of a
corporation is referred to as a(n) ________.
A) promoter
B) authorized shareholder
C) registered agent
D) incorporator
Which of the following is true of general and limited partners in a limited partnership?
A) Limited partners are exempt from annual capital investment and need only
participate in management functions.
B) General partners are not personally liable for partnership debts.
C) General partners are required to invest capital and refrain from managerial activities.
D) Limited partners are not personally liable for partnership debts beyond their capital
contributions.
JK Developers and KL Designs, who are experts in architectural engineering, form a
business agreement whereby they agree to work together for two years in order to
complete the design of a planetarium. This is an example of a ________.
A) franchise
B) licensing agreement
C) strategic alliance
D) limited partnership
Which of the following is true of state administrative agencies?
A) They are created by federal administrative agencies.
B) They act as advisory boards for the president.
C) Their decisions can be appealed to a state court.
D) They are not empowered to enforce statutes.
Which of the following is true of the Communications Decency Act of 1996?
A) Businesses can send spam e-mails as long as they don’t lie.
B) ISPs are not liable for the content transmitted over their networks by e-mail users
and websites.
C) Businesses are liable for invading the right to privacy if they send unsolicited
e-mails.
D) The number of servers an ISP can access in a geographical location is limited.
Using a sexually explicit picture or screensaver to mock an employee constitutes
________.
A) sex discrimination
B) quid pro quo sex discrimination
C) sexual harassment
D) emotional abuse
Roger, a lawyer, borrowed money from Jax to start a business. He gave a promissory
note to Jax promising to pay the money back anytime within the next five years. But in
order to accept the note, Jax demanded a security deposit. Roger gave the gold that he
owned as security. Roger in turn demanded that a specific clause be added to the
promissory note to allow faster repayment of the loan in case he inherited money within
the next five years. But even after five years, Roger was unable to complete payment.
He made a new promissory note promising to finish payment within the next year, and
promised to provide free legal service to Jax for the next two years. Which of the
following is true of the validity of the new promissory note made by Roger?
A) It must contain interest on the old principal to become a valid instrument.
B) It must contain a specific date or time to be considered valid.
C) It is a nonnegotiable instrument.
D) It is a negotiable instrument if Jax accepts it.
________ refers to an equitable doctrine that permits the court to rewrite a contract to
express the parties’ true intentions.
A) Reformation
B) Injunction
C) Conjunction
D) Garnishment
The ________ is a federal act which states that federal administrative agencies can
maintain only information about an individual that is relevant and necessary to
accomplish a legitimate agency purpose.
A) Freedom of Information Act
B) Privacy Act
C) Government in the Sunshine Act
D) Equal Access to Justice Act
A contract in which both parties are mistaken about the value of the object of the
contract is considered ________.
A) unenforceable
B) unconscionable
C) non-rescindable
D) void
Which of the following is true of the priority of claims?
A) If two or more secured parties claim an interest in the same collateral but only one
has perfected his or her security interest, the perfected security interest has priority.
B) Although one of the parties to claim an interest in the collateral has perfected his or
her security interest, all the parties are given fair and equal priority.
C) If two or more secured parties claim an interest in the same collateral but neither has
a perfected claim, they are given equal priority irrespective of attachments.
D) If two or more secured parties claim an interest in the same collateral but neither has
a perfected claim, the first to claim has priority.
Kantian ethics is also referred to as ________ ethics.
A) relativistic
B) utilitarian
C) duty
D) nihilistic
Stanley, who owes Milton money, indorses a draft to him with the term “without
recourse.” The instrument later is dishonored. What liability does Stanley have on the
instrument?
A) He has no liabilities on the instrument.
B) He has to pay Milton if the instrument defaults.
C) He has primary liabilities.
D) He has secondary liabilities.
Eliza buys a car from TinCar Autos with a warranty that says any defect of the car will
be repaired or replaced free for a period of six months after the sale. TinCar has taken
security interests in the car. Before completely paying off for the car, Eliza sells the car
to Mona for cash. Mona is unaware of TinCar’s security interest in the car. After Eliza
misses several of her payments, TinCar discovers that Mona has the car, and
repossesses it. Which warranty breach can Mona assert to recover from Eliza?
A) warranty of no security interests
B) warranty against infringements
C) warranty of good title
D) warranty of no interference
The corporation that owns the shares of the subsidiary corporation in a share exchange
is known as the ________.
A) surviving corporation
B) parent corporation
C) sole proprietor
D) primary partner
In a(n) ________ franchise, the franchisor manufactures a product and licenses a retail
dealer to sell the product to the public.
A) processing plant
B) area
C) distributorship
D) chain-style