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Law
Q:
Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management
a. only to the extent that she assumes liability for the firm's debts.
b. only to the extent of her investment in the firm.
c. to any extent.
d. to no extent.
Q:
A corporation whose shares are held by relatively few persons is a partnership.
Q:
CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed otherÂwise, participants in the firm's management will be considered to include
a. all members.
b. no member.
c. one member.
d. two members, including at least one general partner.
Q:
A corporation cannot be formed without a profit-making purpose.
Q:
Negligence per se may occur on the violation of a statute.
Q:
StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the memÂbers, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be
a. distributed according to the member' proportionate shares of ownership in the firm.
b. divided equally among the members.
c. forfeited to the state.
d. reinvested in the business until the dispute is resolved.
Q:
In many states, the plaintiff's negligence is a defense that may be raised in a negligence suit.
Q:
A foreign corporation is a corporation formed in another country.
Q:
A business incorporated in one state has an automatic right to do business in any other state.
Q:
Homer's Remodeling, LLC, is a limited liability company. Among the memÂbers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. joint venture law.
Q:
Only a foreseeable intervening event can break the connection between a wrongful act and an injury to another.
Q:
In a comparative negligence state, if a plaintiff is found to be 30 percent negligent, the award against the defendant will be reduced by 70 percent.
Q:
Farm2Fork, LLC, is a limited liability company. Rather than disÂtribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as
a. a corporation.
b. a partnership.
c. a sole proprietorship.
d. a business trust.
Q:
Corporate officers hire corporate directors.
Q:
Jessica's Jumpin Jelly Beans, LLC, is a limited liability company. Unless indiÂcated otherwise on Jessica's federal tax form, the firm will be taxed as
a. a cooperative.
b. a corporation.
c. a joint venture.
d. a partnership.
Q:
A corporate director is an "owner" of the corporation.
Q:
Assumption of risk can be raised as a defense in a negligence suit.
Q:
Jordana is a member of Klondike Coffee, LLC, a limited liability company. Jordana is liable for Klondike's debts
a. in proportion to the total number of members.
b. to the extent of his capital contribution.
c. to the extent that the other members do not pay the debts.
d. to the full extent.
Q:
Generally, there is a uniform body of national corporate law.
Q:
A person assumes any risk that is different from or greater than the risk normally carried by an activity.
Q:
Florence and Grady pool their money and talents to form Happy Home Builders, Inc. They are the firm's only shareholders, directors, and officers. After five years of declining home prices, they decide to cease business. Can they simply dissolve their corporation at will? If so, what are the steps in the process?
Q:
Mit-E Mart LLC was formed in New Jersey. Mit-E Mart's members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of
a. all states.
b. New Jersey and New York.
c. New Jersey only.
d. no state.
Q:
An assumption of risk defense does not require that a risk be voluntarily assumed.
Q:
Proximate cause exists when the connection between an act and an injury is strong enough to justify imposing liability.
Q:
Jade, Kelly, and Lila organize a nonprofit businessJKL Markets, Inc.to buy groceries from wholesalers and sell them to consumers who buy a membership in JKL. Because the firm is a nonprofit entity, it is able to sell the groceries for less than a commercial grocer could. What form of business organization is JKL Markets? Is it significant that JKL is incorporated?
Q:
Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of
a. all states.
b. every state in which its members are citizens.
c. no state.
d. only the state in which it was formed.
Q:
For purposes of establishing negligence, causation in fact exists if an injury would have occurred even without the defendant's act.
Q:
Petra, Queenie, and Randall want to form Sales-to-Infinity, LLC (limited liability company). What should they provide in their operating agreement? If they fail to include some important operating details, what determines these details?
Q:
Coco is considering forms of business organization for her concessions business'Coco's Cupcakes. Most states require that a limited liability company have at least
a. no minimum number of members.
b. at least one member.
c. at least two members.
d. at least three members, including at least one general partner.
Q:
Liability for negligence requires a finding of causation in fact and a determination of proximate cause.
Q:
Vela and other farmers in Washington County form a business organization to provide, without profit, an economic service to its members. This is
a. a business trust.
b. a cooperative.
c. a corporation.
d. a joint stock company.
Q:
Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liabilÂity company, she must file with a central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
Q:
Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of
a. the amount of capital they contribute.
b. the degree to which they participate in management.
c. their transactions with the cooperative.
d. the requirements of the state in which it was incorporated.
Q:
Greta is a member of Hovercraft LLC. As a member, Greta is
a. a manager or officer, but not an owner.
b. an investor, but not a manager, officer, or owner.
c. an owner.
d. a participant, but not an investor, manager, officer, or owner.
Q:
Causation in fact can exist even if the plaintiff's injury would have occurred without the defendant's act.
Q:
Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other unincorporated cooperatives are generally treated like
a. business trusts.
b. corporations.
c. joint stock companies.
d. partnerships.
Q:
To avoid liability for negligence, a business owner must protect its patrons against all risks.
Q:
Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is
a. an aggregate of Chad and the other members.
b. a natural person in the member' "family."
c. a legal entity apart from the owners.
d. a non-participating third party.
Q:
Neverend Music Company and Monotonous Metronome Corporation form a joint stock company. A joint stock company can be formed for, at the most,
a. an implied duration of not more than six months.
b. a perpetual existence.
c. a single activity or transaction.
d. a stated duration of not more than one year.
Q:
If a person breaches a duty of care and another person suffers an injury, the breach must have caused the harm for liability to result.
Q:
High Pointe LLC's members include Irvin. For purposes of holding title to property, High Pointe is
a. an aggregate of Irvin and the other members.
b. a natural person in the member' "family."
c. a legal entity apart from the owners.
d. a non-participating third party.
Q:
Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of
a. a member of a joint venture.
b. an owner of a sole proprietorship.
c. a partner of a partnership.
d. a shareholder of a corporation.
Q:
Liability for negligence requires intending certain consequences or believing that they will occur.
Q:
National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by
a. partnership certificates.
b. shares of stock.
c. title documents.
d. trust certificates.
Q:
Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Q:
Individuals are expected to exercise a reasonable standard of care in their activities.
Q:
A business trust is created by a written trust agreement.
Q:
Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Q:
A reasonable person standard determines whether allegedly negligent conduct resulted in a breach of a duty of care.
Q:
The owners of an unincorporated cooperative have joint liability for its obligations.
Q:
Like a corporation, the ownership of a joint stock company is represented by shares of stock.
Q:
Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This business organization is
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Q:
If no harm results from an allegedly negligent act, there is no liability.
Q:
International Exports, L.P., is a limited partnership, with $100,000 in deÂclared but unpaid profits. International's creditors include Friendly Credit Corporation for $5,000 and Gwen, one of International's limited partners, also for $5,000. When Harry, one of International's general partners, deÂcides to retire, the other general partners vote to liquidate and dissolve the firm. The limited partners, who are not asked their opinions, want InternaÂtional to continue in business and file a suit against the general partners to compel this result. Can the court order International to continue? If not, what is the priority of the distribution of International's assets on its dissolution?
Q:
Consumers in Delta City form a business organization to provide, without profit, an economic service to its members. This is
a. a business trust.
b. a cooperative.
c. a corporation.
d. a joint stock company.
Q:
If a person breaches a duty of care and another person suffers an injury, causation does not need to be established.
Q:
Business owners have no duty to exercise reasonable care to protect invitees.
Q:
Sally and Tom decide to go into business, selling discounted merchandise through their Web site "e-Buy." They sign a partnership agreement that requires Sally to contribute $12,000 and Tom to contribute $8,000 in capital to start the firm. The agreement also states that only Sally will have the authority to bind the partnership in deals with third parties, but the agreement says nothing about the management of the firm or a division of profits. Without Sally's knowledge, Tom tells United Computer Products, Inc., that he represents the firm and signs a contract with United to buy hard drives for resale on e-Buy. In the first year, e-Buy makes a profit of $50,000. What are the partner' rights with respect to the management of the firm? Is the partnership bound to the contract with United? Do the partners split the first year's profits? If so, how much is each entitled to?
Q:
Fab is the owner and manager of a business trust. Gilly is the beneficiary. Responsibility for the debts and obligations of the trust rest with
a. Fab and Gilly.
b. Fab only.
c. Gilly only.
d. neither Fab nor Gilly.
Q:
The degree of care to be exercised in a situation can vary with a person's profession or occupation.
Q:
Energy Unlimited, LP, is a limited partnership to which its partners, inÂcluding Fink, have contributed capital. Energy's creditors include Graves Engineering, Inc. On Energy's dissolution, its assets will be distributed to pay
a. Fink and Graves proportionately.
b. Fink first.
c. Graves first.
d. neither Fink nor Graves.
Q:
An ordinary person standard determines whether allegedly negligent conduct resulted in a breach of a duty of care.
Q:
Elmo is the owner and manager of a business trust. Under the terms of a business trust, Elmo is required to
a. distribute the profits and manage the property.
b. distribute the profits only.
c. manage the property only.
d. neither distribute the profits nor manage the property.
Q:
As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is
a. limited to his capital investment in the trust.
b. limited to his personal assets.
c. nothing.
d. unlimited.
Q:
Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a limÂited partnerÂship. Connie dies. The partnership can
a. continue only after a distribution of its assets.
b. continue only as a general partnership.
c. continue only if Drew and Ellen consent.
d. not continue because Connie's death dissolves the firm.
Q:
Venture Capital, LP, is a limited partnership. Its limited partners include more than 150 sophisticated investors and investment professionals. A Venture limited partner loses his or her limited liability if he or she
a. acts as the firm's manager.
b. does not participate in the firm's management.
c. invests in Unified Fund, one of Venture's competitors.
d. votes on the firm's sale or dissolution.
Q:
To determine whether a duty of care has been breached, a judge asks how he or she would have acted in the same circumstances.
Q:
Drew is a beneficiary of a business trust. As a beneficiary, Drew is required to
a. distribute the profits and manage the property.
b. distribute the profits only.
c. manage the property only.
d. neither distribute the profits nor manage the property.
Q:
Lucy is a limited partner in Metro Contractors, a limited partnership, which cannot pay its debts. Lucy is personally liable for the debts
a. in proportion to the number of partners in the firm.
b. to no extent.
c. to the extent of her capital contribution.
d. to the full extent.
Q:
Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to
a. avoid personal liability for the acts of the cooperative.
b. obtain an exemption from state laws governing corporations.
c. pay no taxes on their business income.
d. pool their resources to gain an advantage in the market.
Q:
Persons are free to act as they please so long as they do not infringe on the interests of others.
Q:
A water pipe bursts, flooding a General Business Company (GBC) utility room and tripping the circuit breakers on a panel in the room. GBC contacts Hal, a licensed electrician with ten years of experience, to investigate the damage and turn the breakers "on." Hal attempts to turn on one of the breakers without testing for short circuits, which he knows should be done. Hal is electrocuted, and files a suit against GBC for damages, alleging negligence. How might GBC defend itself?
Q:
Rick and Sandy are limited partners in Total Profit Enterprises, a limited partÂnerÂship. To avoid personal liability for partnership obligations, they must not
a. acquire an interest in the firm.
b. contribute property to the firm.
c. engage in activities independent of the firm's business.
d. participate in the firm's management.
Q:
Loni, Michel, and Nita are investors in Oceanic Exploration, a business trust. A business trust is managed by its
a. directors and officers.
b. general partners.
c. managing members.
d. trustees.
Q:
Fern and Gray want to form a limited partnership to manage two restaurants: Café Latte and Deli Delite. In most states, a limited partnership will be created when
a. a certificate of limited partnership is filed.
b. a partnership agreement is executed.
c. the business for which the firm is formed actually begins.
d. the partners make their capital contributions.
Q:
Ann commits an act that endangers Bob. Carol and Dick see the danger. Carol tries to help Bob and is injured. Dick watches and does nothing. Can Ann be held liable for Carol's injury? Can Dick be held liable for not trying to help Bob?
Q:
Ray, Sully, and Toma form a syndicate to buy a professional football team. This syndicate could be set up as
a. a corporation only.
b. a corporation or a partnership.
c. a partnership only.
d. neither a corporation nor a partnership.
Q:
Jack and Kyra are partners in Law Firm, LLP, a limited liability partnership. Jack supervises Kyra, who negligently fails to appear in court on behalf of Milo, a client. Liability to Milo rests with
a. Jack and Kyra.
b. Jack only.
c. Kyra only.
d. neither Jack nor Kyra.
Q:
Eve owns First-Rate Salvage, a demolition company. A demolition by a First-Rate crew injures Glen, a passerby. Under the theory of strict liability, Eve must pay for Glen's injury
a. only if Glen's injury was not reasonably foreseeable.
b only if Glen's injury was reasonably foreseeable.
c. only if the First-Rate crew was at fault.
d. whether or not the First-Rate crew was at fault.
Q:
Omega Corporation and Precision Coding, Inc., two software firms, wish to combine their research and development capabilities to make a special, limited edition computer game. The most appropriate legal entity for this project might be
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.