Bus law test 4 Review 1

Developed by: Dan

Test 4 Review 1

Question 1: Which of the following is NOT a part of being a sole proprietor?

	You have to file a fictitious name statement if business name is not the same as your legal name
	Opens a business themselves
	2 or more people engaged in business for profit
	File Chapter 7 Bankruptcy
	Responsible for all the profits and losses

Question 2: Which of the following ISN'T true in a general partnership?

	Cannot be sued for more than what they’ve invested
	Creditors can go after personal assets
	Partnership can be sued or the individuals
	2 or more people engaged in business for profit
	All participate in management decisions equally no matter how small or big the contribution to enter the partnership was

Question 3: Which of the following ISN'T true about a limited partnership?

	Must have 1 general partner, the others can be limited partners
	It can create a limited liability company and not all partners have the right to participate in managerial decision
	Must file a certificate of limited partnership w/ Secretary of State for that state
	Limited partners cannot be sued for more than what they’ve invested
	Double taxation of profit and limited liability

Question 4: Which of the following IS NOT true about a limited liability company?

	Create the Articles of Organization
	Must file a document like limited partnership
	Protects you from personal liabilities; protects the incorporator unless you do 2 things to be liable --- crime or fraud
	Double taxation of profit and limited liability

Question 5: Provides a corporate veil: protects you from personal liabilities; protects the incorporator unless you do 2 things to be liable --- crime or fraud. Allows you to have just 1 person for all positions

	Limited Partnership
	Corporation
	Limited Liability Company
	General Partnership
	Sole Proprietorship

Question 6: All the information about the birth of the Corporation must be filed with the Secretary of State

	Articles of organization
	Articles of incorporation
	Constitution of incorporation

Question 7: Can a member of a limited liability company be liable for more than they’ve invested?

	N/A
	No, it happens to members in a limited partnership company only
	Yes, if they do 1 of 2 things: negotiate a loan or engage in management duties.

Question 8: Can limited partners in a limited partnership lose their limited partnership status?

	Yes, if they do 1 of 2 things: negotiate a loan or engage in management duties
	No, it happens to members in a limited liability company only
	N/A

Question 9: If you do business in another state, not the home state

	Foreign Corporation
	Inter state corporation
	Alien Corporation

Question 10: Doing business in another country

	International Corporation
	Foreign Corporation
	Alien Corporation

Question 11: Direct officers what can be done to operate the business; telling employees what to do; a policy or manual giving authority to employees; it can be amended-- “the rules that regulate and govern the internal operations of the corporation. Must be followed by shareholders, directors, and officers “

	By-laws
	Rules
	Articles

Question 12: T/F: Articles of Incorporation not easily amended like by-laws

	True
	N/A
	False

Question 13: S-Corp-No corporate income tax if ___ or less employees

	80
	50
	95
	65
	75

Question 14: T/F: If you’re publicly traded in stocks, stockholders own the corporation

	False
	True
	N/A

Question 15: Employer and employee agree on employment for a certain time or that job security is provided

	Implied Contract
	Express contract
	Good faith and fair dealing

Question 16: May restrict the grounds for termination or require specific procedure to be followed in dismissal

	Good faith and fair dealing
	Express Contract
	Implied Contract

Question 17: A person who works for another person

	Agent
	Principal
	Contractor

Question 18: Say the who principle is - Example: Someone comes up to me and says, “you work for Stephanie?” I said, “Yes.” I can say it because I have Stephanie’s permission. I am a disclosed agent and Stephanie cannot sue for saying it or blame me for doing anything wrong.

	Totally undisclosed agent
	Partially disclosed agent
	Totally disclosed agent

Question 19: Cannot say who the principle is but can say they represent someone - I am going to give you a written document and make you my agent. You’re going to take my celebrity clients out. You’re going to be a partially disclosed agent. - Example: Someone comes to me, “Do you work for Stephanie?” I have to say, “NO.” I am an agent and cannot say who the principal is.

	Totally undisclosed agent
	Partially disclosed agent
	Totally disclosed agent

Question 20: This agent can never say who the principle is or that they even represent someone - Cannot say anything to anyone who your principal is or say you’re an agent.

	Totally disclosed agent
	Partially disclosed agent
	Totally undisclosed agent

Question 21: Relationship between agent and principal (and others) based on trust, loyalty, and confidence in each other

	Fiduciary duty
	Duty to cooperate
	Duty to compensate

Question 22: What are the duties a principal owes to an agent?

	Duty to reimburse and duty to indemnify
	Must not furnish goods of inferior quality
	Duty to cooperate
	All of the above
	Provide safe working environment

Question 23: Perform responsibilities as agreed in agency

	Duty to reimburse
	Duty to indemnify
	Duty to cooperate

Question 24: For authorized payments made by agent to 3rd parties on principal’s behalf

	Duty to reimburse
	Duty to indemnify
	Duty to cooperate

Question 25: Pay for damages or to insure agent against losses suffered

	Duty to indemnify
	Duty to reimburse
	Duty to cooperate

Question 26: What are the duties that an agent owes to the principal?

	Duty of loyalty
	Duty of obedience and performance
	Duty to account and duty to inform
	Exercise reasonable care and skill in performance
	All of the above

Question 27: Places principal’s interests before agent’s personal interests; trust, honesty, and confidence for principal

	Duty of obedience and performance
	Duty of loyalty
	Duty to account
	Duty to inform

Question 28: Perform instructions provided by principal but no obligation to engage in acts that can lead to personal liability

	Duty of obedience and performance
	Duty to account
	Duty to inform
	Duty of loyalty

Question 29: For funds and property of principal

	Duty of obedience and performance
	Duty to account
	Duty to inform
	Duty of loyalty

Question 30: Keep principal informed of all facts relevant to agency

	Duty of obedience and performance
	Duty of loyalty
	Duty to account
	Duty to inform

Question 31: The servant is an employee who's conduct is controlled by the employer. A servant can also be and agent.

	Employer-Independent Contractor
	Principal-Agent
	Master Servant Relationship

Question 32: Agent acts on behalf of the principal, with a degree of personal discretion

	Sub-agent
	Employer-Independent Contractor
	Master-Servant relationship
	Principal-Agent

Question 33: Not an employee, and the employer does not control the details of this person's performance. This person is usually not an agent

	Master-Servant relationship
	Employer-Independent Contractor
	Sub-Agent
	Principal Agent

Question 34: When an agent secretly hires another agent for themselves, making the principal not liable. (In order for the principal to be liable, they have to agree. Then the agent has two titles-Tier system.

	Employer-Independent Contractor
	Principal-Agent
	Sub-Agent
	Master-Servant relationship

Question 35: Acceptance of responsibility Example: Principal not liable for subagent if not agreed by principal but if principal agreed liable for acts of subagents. Also liable for both – agent and subagent

	Express ratification
	Principal's ratification
	Apparent authority
	Actual authority

Question 36: Principal’s clear signal to be bound to unauthorized agreement

	Implied ratification
	Principal's ratification
	Express ratification

Question 37: When principal behaves as if he/she has intent of ratifying agreement

	Implied Ratification
	Express ratification
	Principal's ratification

Question 38: Arises when the principal creates an appearance of authority in an agent that leads a 3rd party to conclude reasonably that the agent has authority to act for the principal

	Apparent Authority
	Actual Authority
	Express ratification
	Implied ratification

Question 39: Real authority; given by principal, express/implied; changes the principal’s legal status–“given by the principle to the agent to change the principal’s legal status. It can be expressed or implied”

	Apparent authority
	Express Ratification
	Implied ratification
	Actual Authority

Question 40: Employee at will, which are true? I. Employers free to discharge employees for any reason any time II. Employees free to quit for any reason any time

	II only
	Neither are true
	Both I and II
	I only

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