In states that follow the Revised Uniform limited partnersship Act, the —neednot be
included in the certificate of limitedpartnership.
A. names and addresses of all limited partners
B.namesandaddress esofallgeneralpartners
C.nameandaddressoftheagentforserviceof
D. name of the limited partnership
In several states, a(n) is filed with the secretary of state prior to filing the arti- cles of
dissolution.
A. statement of intent to dissolve
B. liquidation notice
C. articles of liquidation document
D. certificate of withdrawal
Shareholder approval would notbe required to amend a corporation’s articles of
incorporation to change the
A. authorized stock of the corporation before stock is issued.
B. voting rights of one class of stock.
C. number of authorized shares of stock of the corporation.
D. number of directors required on the corporation’s board of directors.
To become an S Corporation, the corporation’s shareholders must
A. file an election with the secretary of state or other appropriate state official.
B. designate the corporation as an S Corpora- tion in the articles of incorporation.
C. publish notice of S Corporation status.
D. file an election to be treated as an S Corpo- ration, approved by all shareholders,
with the IRS.
When a court disregards the corporate entity to prevent an injustice, it is referred to as
A. piercing the corporate veil.
B. corporate liability.
C. unlimited shareholder liability.
D. shareholder responsibility.
Reimbursement by a corporation to its officers and directors who are named as
defendants in litigation involving the corporation for their expenses incurred in
defending themselves is referred to as
A. litigation reimbursement.
B. director reimbursement.
C. personal liability reimbursement.
D. indemnification.
10. Instead of minutes to an organnizational meet-ing,—may beusedto approve the
resolutions of the corporate organizers.
A. a unanimous writing in lieu of an organiza- tional meeting
B. bylaws
C. an agreement of incorporators
D. a preincorporation agreement
A corporation that transacts business in a foreign state without qualifying to transact
business in accordance with the statutes of that state may
A. be prohibited from bringing suit in the foreign state.
B. be dissolved by the secretary of state of the foreign state.
C. not be sued in the foreign state.
D. bring an action in the courts of the for- eign state to enforce contracts made in that
state.
A principal is notliable for the torts of his or her agent if the
A. tort is committed by the agent acting in the scope of his or her employment by the
principal.
B. agent’s action is unrelated to the agency relationship.
C. principal is negligent or reckless in super- vising the agent.
D. agent is acting under the principal’s direc- tion when committing the tort.
A limited liability company is
A. considered an aggregate of the company’s members.
B. an unincorporated business organization owned by members.
C. owned and managed by shareholders.
D. taxed as a corporation.
Under the Uniform Partnership Act (1997), partners do not have the right to
A. an equal share in the profits of the partner- ship.
B. participate in the management of the part- nership.
C. receive a salary paid by the partnership.
D. inspect the books and records of the part- nership.
When a foreign corporation may transact business in a particular state in the future, and
it is desirable to reserve the corporation’s name in that state for an extended period of
time, the foreign corporation may
A. file a copy of its articles of incorporation with the secretary of state of the foreign
state.
B. publish a notice of name use by foreign corporation in a newspaper in the foreign
state.
C. register its name with the secretary of state of the foreign state.
D. register its name with the secretary of state of its state of domicile.
7. Partners have —-authority to act on behalf of the partnership with regard to actions
in the ordinary course of business.
A. accrued
B. actual
C. fiduciary
D. express
A business corporation is not an
A. entity created by law.
B. organization that can exist perpetually.
C. organization with certain rights and powers granted by statute.
D. entity that is disregarded for income tax purposes.
The registration statement that must commonly be filed under the Securities Act of
1933 is the
A. FormS-1
B. Form A.
C. Form 10-1.
D. Form 10-K.
A—is a trans action where by one corporation acquires all of the outstanding shares of
one or more classes or series of another corporation by an exchange that is compulsory
on the shareholders of the target corporation.
A. stock acquisition
B. statutory merger
C. statutory share exchange
D. compulsory share exchange
The partners of a limited partnership must include at least
A. two general partners and two limited partners.
B. One individual and one corporation
C. one general partner and one limited partner.
D. three partners.
State laws that provide that a corporation or other business organization doing business
in the state without authority is precluded from maintaining an action in the courts of
that state are referred to as
A. long-arm statutes.
B. door-closing statutes.
C. foreign corporation statutes.
D. foreign court statutes.
The limited liability company’s articles of organization do notusually include
A. the name of the limited liability company.
B. the names and addresses of the managers
who are personally liable for the debts and obligations of the company.
C. the name and address of the agent for ser-vice of process.
D. the duration of the company or a statement that the company has perpetual existence.
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
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.
The document that must be furnished to a pro- spective purchaser of registered
securities is re- ferred to as the
A. Form S-1.
B. prospectus.
C. registration statement.
D. securities disclosure statement.
Paralegals who are assisting in providing services to a sole proprietorship should not
A. advise the sole proprietor with regard to the income tax consequences of doing
business as a sole proprietor.
B. assist with the preparation of state and fed- eral forms to comply with state and
federal taxation requirements.
C. draft and file an application for a certificate of assumed name when that document is
required.
D. draft and file an application for employer identification number when that document
is required.
Upon completion of a statutory merger, the liabilities of the merging corporation
A. are assumed by the surviving corporation.
B. disappear.
C. become the personal responsibility of the merging corporation’s shareholders.
D. are assigned to a subsidiary corporation.
A stock split
A. is a form of stock dividend.
B. decreases the number of outstanding shares of a corporation.
C. increases the capital of a corporation.
D. is the proportionate division of all author- ized shares of a class of stock into two or
more shares.
The number of partnerships in the United States is
A. greater than the number of corporations.
B. about the same as the number of corpora- tions.
C. greater than the number of sole proprietor- ships.
D. Less than the number of both corporations and sole proprietorships.
Statutory close corporations typically
A. have more than 50 shareholders.
B. are managed by a board of directors with at least five directors.
C. are managed by the shareholders of the corporation.
D. may not have restrictions on the transfer of shares of their stock.
The amount of consideration received in pay- ment of stock in excess of the par value
of the shares is referred to as
A. capital surplus.
B. stated capital.
C. par value consideration.
D. excess capital.
The process of paying the debts of the corporation and distributing its assets is often re-
ferred to as the corporate
A. distribution.
B. dissolution.
C. liquidation.
D. termination.
The application for employer identification number must be filed with the
A. secretary of state.
B. State Unemployment Insurance Department.
C. Internal Revenue Service.
D. U.S. Department of Labor.
The agenda for an organizational meeting would probably notinclude
A. ratification of the acts of the incorporators.
B. election of the first board of directors.
C. approval and signing of the preincorpora- tion agreement.
D. issuance of shares of stock.
The allocation of profits and losses is deter- mined unless otherwise indicated in the
limited partnership agreement.
A. by the vote of a majority of limited partners
B. by the vote of a majority of general partners
C. by the managing partner
D.onthebasisofthevalueofthecontribu-tionsmadebyeachpartnerthathavenot been returned
Both limited liability companies and partner- ships
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.
must be filed with the secretary of state or other appropriate state authority to dissolve
the corporation in states following the Model Business Corporation Act.
A. A notice of intent to dissolve
B. A notice to creditors
C. Articles of dissolution
D. A revocation of articles of incorporation
The Uniform Limited Liability Company Act
A. has been adopted by all states except Loui- siana.
B. was adopted by the National Conference of the Commissioners of Uniform State
Law in
C. has had no influence on the state laws that have been adopted concerning limited
liability companies.
D. was drafted to give state legislatures uni- form guidelines for drafting state
legislation.
The most common method of equity financing is the issuance of common stock in
exchange for cash.
The aggregate theory applies in many sections of the Uniform Partnership Act (1914)
relating to the substantive liabilities and duties of the partners
A favorable determination letter issued by the Internal Revenue Service states that the
plan has been reviewed and that it complies with the requirements for a qualified plan.
Under the statutes of most states, annual meet- ings of the board of directors are
mandatory.
A sole proprietor may delegate management and decisions concerning the business to
agents and employees.
Partners owe a duty of loyalty and a duty of care to the partnership and the other
partners.
The income or loss of the partnership is passed through the partnership to the partners
without double taxation.
The Securities Act provides an exemption from registration requirements for the
issuance of se- curities that does not involve a public offering.
Sole proprietors can attract new employees by offering shares of their business as
compensation.
Unless otherwise specified in the partnership agreement or other written agreement, in
states that follow the Uniform Partnership Act (1914), the partnership dissolves
whenever one partner ceases to be a partner, for whatever reason.
In smaller statutory close corporations, the corporation is usually managed by the board
of directors, with little input or interference from the shareholders.
The proper documentation must be filed with the secretary of state to elect limited
liability limited partnership status.
Disputes concerning agency law are typically resolved under the contract or common
law of the state where the agency was created.
The board of directors of a public corporation has oversight responsibility for the
corpora- tion’s business performance and plans.
The shareholders of a dissolved corporation have no responsibility for any claims left
un- paid by the corporation when it is dissolved.
Partners of a general partnership typically have joint and several liability for the debts
and obligations of the partnership.
If specified in the articles of incorporation, shares of stock with no voting rights may be
issued.
The statutory authority granted to the board of directors to manage the business and
affairs of the corporation is absolute and may not be limited in any way by the articles
of incorporation or the corporate shareholders.