Question 1

For purposes of jurisdiction,an LLC is considered a citizen of every state in which its members reside.

Accepted Answer

A) True 
 B)False

Question 2

Brice just finished a residence in internal medicine and wants to go into practice with Horace and Joyce.Brice tells you that while he needs to practice with other physicians for call coverage and for other reasons,he does not want to be liable should the other physicians be found guilty of malpractice.You discuss various incorporation options with him,but he tells you that he would like to form a partnership.What business form would you recommend to him and why?

Accepted Answer

A limited liability partnershi...

Question 3

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?

Accepted Answer

A)   Distributorship
B)   Manufacturing arrangement
C)   Chain-style business operation
D)   Approved business franchise
E)   Acknowledged standards operationF) All of the above
G) C) and D)

Question 4

Which of the following is a voluntary association between two or more persons who co-own a business for a profit?

Accepted Answer

A)   Co-owned business
B)   Partnership
C)   Joint proprietorship
D)   Joint corporation
E)   Joint entityF) C) and D)
G) B) and E)

Question 5

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)   Legal corporation
C)   Public entity
D)   Civil organization
E)   Public organizationF) B) and C)
G) A) and E)

Question 6

Which of the following is the most popular form of business ownership in the U.S.?

Accepted Answer

A)   Sole proprietorship
B)   Limited partnership
C)   Limited liability partnership
D)   Corporation
E)   Limited liability companyF) A) and B)
G) B) and D)

Question 7

List the advantages and disadvantages of a sole proprietorship form of business.

Accepted Answer

The advantages are that (1)creation is e...

Question 8

A franchisee is the owner of a trade name or trademark who is a party to an arrangement,whereby another party sells goods or services under the trade name or trademark.

Accepted Answer

A) True 
 B)False

Question 9

A person who decides to go into business on his or her own without further formality forms a[n] _____.

Accepted Answer

A)   Individual entity
B)   Sole proprietorship
C)   Single entity
D)   Sole entrepreneurship
E)   Single entrepreneurshipF) B) and D)
G) B) and E)

Question 10

Which of the following would be an appropriate form of business organization for Kitty and her parents such that her parents could invest but not participate in management?

Accepted Answer

A)   General partnership
B)   Limited partnership
C)   Managed partnership
D)   Combined partnership
E)   Family-Based partnershipF) A) and B)
G) B) and E)

Question 11

Which of the following was the result in Cousins Subs Systems Inc.,v.Michael R.McKinney,the case in the text involving whether the defendant wrongfully terminated a franchise agreement with the plaintiff?

Accepted Answer

A)   That the defendant rightfully terminated the franchise agreement because the plaintiff made false representations in violation of state statutory law regarding how much money the defendant would make.
B)   That the defendant rightfully terminated the franchise agreement because the plaintiff made false representations in violation of state statutory law regarding the amount of advertising that would be done.
C)   That the defendant rightfully terminated the franchise agreement because the plaintiff made false representations in violation of state statutory law regarding efforts at recruitment of other franchisees.
D)   That the plaintiff did not violate the franchise agreement because the written documents did not contain untrue statements of material facts or omissions of material facts.
E)   That while the plaintiff violated the franchise agreement, the defendant also violated the agreement, and that no damages would therefore be awarded to either party.F) A) and E)
G) D) and E)

Question 12

Which of the following governs partnerships in most states in the absence of an express agreement?

Accepted Answer

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

Question 13

Which of the following is false regarding a sole proprietorship?

Accepted Answer

A)   A sole proprietorship requires few legal formalities.
B)   A sole proprietor has complete control of the management of the business.
C)   The sole proprietor keeps all the profits from the business.
D)   Profits are taxed as the personal income of the sole proprietor.
E)   A sole proprietor is not personally liable for obligations of the business.F) B) and C)
G) C) and D)

Question 14

Officers of a corporation are hired by the shareholders.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true regarding joint ventures?

Accepted Answer

A)   Participants in a joint venture usually share profits equally, but share losses based on the percentage of contribution.
B)   Participants in a joint venture usually share losses equally, but share profits based on the percentage of contribution.
C)   The joint venture is not automatically terminated when one of the members dies.
D)   A joint venture requires the filing of a formal agreement with the state.
E)   Courts frequently apply sole proprietorship law to joint ventures.F) B) and C)
G) A) and E)

Question 16

In which of the following,if any,may investors share in profits but not in management responsibilities while avoiding personal liability?

Accepted Answer

A)   Limited partnership
B)   General partnership
C)   Limited liability partnership
D)   Limited liability company
E)   There is no such entityF) A) and B)
G) C) and E)

Question 17

Will Molly likely be held liable to Fred?

Accepted Answer

A)   Yes, but only if Suzette has officially filed for bankruptcy protection.
B)   Yes, but only if Suzette is insolvent.
C)   Yes, because the cookies had her name on them.
D)   No, because she was a franchisor.
E)   It is unclear and depends on whether she exercised too much authority in the day-to-day affairs of Suzette's business.F) A) and C)
G) B) and D)

Question 18

Which of the following would likely be formed by farmers who want to pool certain crops together to ensure that they get a high market price for their crops?

Accepted Answer

A)   A business trust
B)   A syndicate
C)   A joint venture
D)   A joint stock company
E)   A cooperativeF) B) and C)
G) D) and E)

Question 19

Set forth the advantages and disadvantages of forming a general corporation.

Accepted Answer

The advantages are (1)limited liability ...

Question 20

Which of the following is false regarding limited liability companies?

Accepted Answer

A)   Members need not be citizens of the U.S.
B)   Limited liability companies have the limited liability of corporations yet may be taxed like partnerships.
C)   A limited liability company is formed by filing articles of organization in the state in which members want to establish their LLC.
D)   For purposes of jurisdiction, an LLC is considered a citizen of every state in which its members reside.
E)   Owners of an LLC are referred to as incorporators.F) B) and E)
G) B) and C)

Exam 35: Forms of Business Organizations

Which of the following was the result in Cousins Subs Systems Inc.,v.Michael R.McKinney,the case in the text involving whether the defendant wrongfully terminated a franchise agreement with the plaintiff?

Correct Answer
verified

Which of the following governs partnerships in most states in the absence of an express agreement?

Correct Answer
verified

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?

Correct Answer
verified

Correct Answer
verified
A limited liability partnershi...
View Answer

Will Molly likely be held liable to Fred?

Correct Answer
verified

Set forth the advantages and disadvantages of forming a general corporation.

Correct Answer
verified
The advantages are (1)limited liability ...
View Answer

Which of the following would likely be formed by farmers who want to pool certain crops together to ensure that they get a high market price for their crops?

Correct Answer
verified

In which of the following,if any,may investors share in profits but not in management responsibilities while avoiding personal liability?

Correct Answer
verified

A person who decides to go into business on his or her own without further formality forms a[n] _____.

Correct Answer
verified

Which of the following is the most popular form of business ownership in the U.S.?

Correct Answer
verified

Which of the following is false regarding a sole proprietorship?

Correct Answer
verified

For purposes of jurisdiction,an LLC is considered a citizen of every state in which its members reside.

Correct Answer
verified

A franchisee is the owner of a trade name or trademark who is a party to an arrangement,whereby another party sells goods or services under the trade name or trademark.

Correct Answer
verified

Which of the following is false regarding limited liability companies?

Correct Answer
verified

Which of the following would be an appropriate form of business organization for Kitty and her parents such that her parents could invest but not participate in management?

Correct Answer
verified

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 Answer
verified

Which of the following is a voluntary association between two or more persons who co-own a business for a profit?

Correct Answer
verified

List the advantages and disadvantages of a sole proprietorship form of business.

Correct Answer
verified
The advantages are that (1)creation is e...
View Answer

Officers of a corporation are hired by the shareholders.

Correct Answer
verified

Which of the following is true regarding joint ventures?

Correct Answer
verified

Exam 35: Forms of Business Organizations

Which of the following was the result in Cousins Subs Systems Inc.,v.Michael R.McKinney,the case in the text involving whether the defendant wrongfully terminated a franchise agreement with the plaintiff?

Correct AnswerverifiedShow Answer

Which of the following governs partnerships in most states in the absence of an express agreement?

Correct AnswerverifiedShow Answer

In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA limited liability partnershi...View AnswerShow Answer

Will Molly likely be held liable to Fred?

Correct AnswerverifiedShow Answer

Set forth the advantages and disadvantages of forming a general corporation.

Correct AnswerverifiedThe advantages are (1)limited liability ...View AnswerShow Answer

Which of the following would likely be formed by farmers who want to pool certain crops together to ensure that they get a high market price for their crops?

Correct AnswerverifiedShow Answer

In which of the following,if any,may investors share in profits but not in management responsibilities while avoiding personal liability?

Correct AnswerverifiedShow Answer

A person who decides to go into business on his or her own without further formality forms a[n] _____.

Correct AnswerverifiedShow Answer

Which of the following is the most popular form of business ownership in the U.S.?

Correct AnswerverifiedShow Answer

Which of the following is false regarding a sole proprietorship?

Correct AnswerverifiedShow Answer

For purposes of jurisdiction,an LLC is considered a citizen of every state in which its members reside.

Correct AnswerverifiedShow Answer

A franchisee is the owner of a trade name or trademark who is a party to an arrangement,whereby another party sells goods or services under the trade name or trademark.

Correct AnswerverifiedShow Answer

Which of the following is false regarding limited liability companies?

Correct AnswerverifiedShow Answer

Which of the following would be an appropriate form of business organization for Kitty and her parents such that her parents could invest but not participate in management?

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 of the following is a voluntary association between two or more persons who co-own a business for a profit?

Correct AnswerverifiedShow Answer

List the advantages and disadvantages of a sole proprietorship form of business.

Correct AnswerverifiedThe advantages are that (1)creation is e...View AnswerShow Answer

Officers of a corporation are hired by the shareholders.

Correct AnswerverifiedShow Answer

Which of the following is true regarding joint ventures?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
A limited liability partnershi...
View Answer

Correct Answer
verified

Correct Answer
verified
The advantages are (1)limited liability ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The advantages are that (1)creation is e...
View Answer

Correct Answer
verified

Correct Answer
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