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Exam 20: Forms of business organizations

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Question 21

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A shareholder's right of appraisal only applies to transactions that were initially subject to shareholder approval.

A) True
B) False

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Question 22

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Set forth four of the shareholder proposals that must be included in proxy materials according to the Securities and Exchange Commission.

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Following is the list of proposals that ...

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Question 23

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A joint venture is a perpetual partnership of two or more persons for a specific purpose.

A ________ combines the tax advantages of a pass-through entity with the limited liability advantages of a corporation

States may not impose a higher fiduciary duty upon partners than that set forth in the Revised Uniform Partnership Act.

When directors on a board serve for a fixed term but are not elected all at once it is known as a ________ board.

Which of the following is true regarding incorporation?

In what five categories does the Franchise Rule require a franchisor to make material disclosures?

In a ______________,one person owns all of the assets of the business and is liable for all of its debts.

General partners of a limited partnership remain jointly and severally liable for partnership obligations.

Small corporations can avoid double taxation by electing to be treated as a(n)

Compare and contrast a general partnership with a corporation.Explain the advantages and disadvantages of both forms of business ownership.Discuss fully.

Which of the following is not true regarding limited partnerships?

Partners owe each other a duty of care but not a duty of loyalty.

Which of the following statements is not true regarding the characteristics of a general partnership?

Sarah Smith works as a laser technician for a local dermatology center consisting of physicians operating under a partnership agreement.Sarah purchased supplies through the mail from a medical supply facility totaling $5,000.She signed the contract agreeing to pay for the supplies in her name,Sarah Smith.A few weeks later the dermatologists became embroiled in a bitter dispute regarding profits and terminated the partnership.Unfortunately,the partners were not aware of the debt owed to the medical supply facility; and the bill remained unpaid.Sarah received a bill form the supply company for $5,000.Is she liable to the medical supply company,and why or why not?

Fact pattern 20-1 Joan decides to enter into a franchise agreement with Great Burgers to sell their burgers in her town.The franchise agreement she entered into with Great Burgers did not prohibit Great Burgers from granting other franchises in the area,but that did not concern Joan because she thought Great Burgers would treat her fairly.She did not bother to read the franchise papers,contracts,and disclosures she was provided.Joan's business went very well for the six months.Then,however,another Great Burgers franchise opened just down the street from Joan's restaurant.She was very upset and called Great Burgers to complain.They brushed off her concerns and told her that there was enough business for everyone.Joan,however,is interested in suing Great Burgers. -Refer to fact pattern 20-1.What is the position of the Federal Trade Commission regarding a franchisor selling a franchise very near to an existing franchise?

Mike owns a small but successful coffee house.He has decided to incorporate.Should Mike form a C corporation or a subChapter S corporation? Discuss taxation under both forms and explain requirements for formation of an S corporation.

Which of the following is false regarding decision making in a partnership?

A corporation that is technically defective but that is formed in good faith and exercises corporate power is known as a de jure corporation.