business law 1 finals

85 terms by vajl09

Create a new folder

Advertisement Upgrade to remove ads

The simplest form of business is a sole proprietorship

T

A sole proprietorship lacks continuity on the death of the proprietor,

T

A sole proprietor has unlimited liability for all obligations that arise in doing business.

T

The Uniform Partnership Act governs the operation of partnerships

F

An association cannot be a partnership without an express agreement

F

A partner's profit from a partnership is taxed as income to the firm

F

Withdrawal from a partnership for a term prematurely does not constitute a breach of the partnership agreement

F

Under no circumstances can a non-partner be regarded as an agent whose acts are biding on the partnership

F

In general partnership, all partners have equal rights in managing the partnership

T

Each partner is an agent of the partnership in carrying out the usual business of the firm

F

A partner owes to the partnership and the other partners a duty of loyalty

F

A partner who pursues his or her own interests automatically violates the partner's fiduciary duties to the partnership

F

A partner always has the power and the right to dissociate from the partnership

F

A limited liability partnership allows its partners to avoid personal liability for the malpractice of other partners

T

In a limited partnership, a limited partner is personally liable to the partnership's creditors

F

Limited liability companies (LLCs) are governed by state LLC statutes

T

The liability of the members of a limited liability company is limited to the amount of their investments

F

In many states an operating agreement is not required for a limited liability company to exist

T

A limited liability company must be managed by non-member managers

F

Some states provide that in the absence of an agreement to the contrary each member of a limited liability company has one vote

F

Normally a dissociated member of a limited liability company (LLC) has the right to have his or her interest in the (LLC) bought by the other members

F

Most limited liability company statutes have no provisions regarding member's meetings

F

As with partnership, a court can order a limited liability company to dissolve in certain circumstances

F

A corporate director is the owner of the corporation

F

Normally, corporate shareholders are personally liable for the obligations of the corporation

F

A holding company is a company whose business activity consists of holding shares in another company

T

A close corporation cannot operate as an $ corporation

T

When the corporate privilege is abused for personal benefit, the courts will require the owners to assume personal liability

F

A court will not pierce the corporate veil of a corporation that is merely too thinly capitalized

F

Common stock provides a proportionate interest in the corporation with regard to control

F

Firms are obligated to return a principal amount per share to each holder of common stock

F

Common stock provides a proportionate interest in the corporation with regard to net assets

F

Preferred shares normally have a fixed maturity date on which the firm must pay them off

F

Venture capital provided to new business ventures by professional, outside investors

F

A merger involves the legal combination of two or more corporations, only one of which continues to exist

F

After a consolidation there is only one surviving corporation

F

The officers employees of each corporation involved must approve a merger

F

In a share exchange, some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation

F

A short form merger is the legal combination of two or more corporations online

F

Shareholder appraisal rights do not usually extend to short form mergers

F

Once a dissenting shareholder elects appraisal rights, the shareholder loses his or her shareholder status

F

A corporation that is selling all of its assets most obtain approval only from its board of directors

F

Federal securities laws strictly control the terms, duration and circumstances under which most tender offers are made

F

Dissolution can be brought about voluntarily by the directors and shareholders of a corporation

F

When a corporations is dissolved voluntarily, the corporation must notify its creditors of the dissolution

F

The state can bring can action to dissolve a corporation that has failed to pay its annual taxes

F

Corporate shareholders are the ultimate authority in every corporation

F

In most states, a director cannot be removed from a corporation board without cause

F

Incorporators appoint a corporation's first board of directors

F

A director usually serves on a corporation's board for a life term

F

An director cannot be elected by the other members of the board

F

All directors must be present before a board can transact business

F

A board of directors can delegate some functions to corporate officers

F

A director is a fiduciary of a corporation

F

Officers are required to exercise a reasonable amount of supervision over the corporate directors

F

Corporate directors and officers are insurers of business success

F

A director my not sit on the board of more than one corporation at a time

F

Shareholders own a corporation

F

Shareholders have no responsibility for the day to day management of a corporation

F

Corporate officers and directors owe no duty to individual shareholders

F

Shareholder's meetings do not have to occur on any regular basis

F

To vote their shares, share holders must attend a meeting and vote in person

F

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders vote

F

Shareholder voting agreements are usually held to be invalid and unenforceable

F

A preemptive right is preference over other shareholders to cast the determining vote on fundamental changes affecting the corporation

F

A corporation cannot refuse a shareholder's request to inspect corporate records

F

Any corporate funds are legally available for paying dividends

F

A stock warrant is a distribution of corporate profits or income

F

A dividend may be paid from undistributed net corporate profits

F

Persons whose names appear in a corporation's stock book are ordinarily entitled to notice of shareholders meetings and the right to vote

F

Shares issued for more than their fair market value are known as watered stock

F

The least common forms of securities are bonds issued by corporations

F

A registration statement must include a financial statement certified by an independent public accounting firm

F

A registration statement must state how a corporation plans to use the proceeds from the sale of the securities

F

Sales of securities must occur within five days of registration

F

Generally, stock offerings that are made in a limited manner during any twelve month period are not exempt from the registration requirement

F

A free writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement

F

Before filling a registration statement, an issuer must offer to sell securities

F

A corporation whose security does not qualify for an exemption can avoid the cost and complexity associated with registration

F

Generally stock offerings that involve a small dollar amount are exempt from the registration requirement

F

Private offerings of securities in unlimited amounts can be exempt from the registration requirement of the Securities Act of 1933

F

Few securities can be resold without registration

F

Securities that are exempt from the registration requirement can generally be solid and resold without being registered

F

Willful violations of the Securities Act of 1933 may be subject to criminal prosecution

F

Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense

F

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set