midterm6 buisness207 fall03 Perello - Nam BUS 207 Midterm v...

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Unformatted text preview: / . _, . Nam. :. BUS. 207 - Midterm v I 7 Perello — Fall 2003 A. Name the fiVe pieces of information stating no partner has the power to ‘ needed in artich of incorporation: ‘ terminate it a D mag. {3 N5 rwé, [email protected] 4. A corporation must issue 7 . ‘ dividends at least once a year. Q\ g @[QHEQIXQ 00 [pg 32; _. ‘ _ w 5. Non-competition contracts made 3\ ,Enagfearg 5 between a partner and a partnership ‘ ' terminate if a new partner joins the I“ fi if SflfUILLf V firm and no express partnership agreement has been made. S3 anml talents... . 6. Although not legally required to B. Name the five primary rights of attend board meetings, corporate ownership of a share of corporate stock. - directors may be subject to liability . for corporate losses if they do not attend. . Or a 7. E0 ciosr’pfirate officer will have actual, implied or apparent authority unless it is specifically granted by either the shareholders Or the directors. a mgrflg, @F 8. If a corporation is not properly r L formed, it becomes a partnership. Answer the following questions on ‘ your scantmn, T® 9. An ultra vires act is any actio ' I ‘ by an officer or director causing 1. If the articles of incorporation the Corporation to 1053 mOHEY- t. are incorrectly filed, the "L: ‘ corporation may be formed by 10. Each share of stock represents 3 estoppel.‘ ercentage ownership of 0 the corporation. 2. After leaving a partnership, the $6, ix leaving partner is still liable for the 11~ Directors and officers generally debts incurred while he was a are not liable for corporate losses partner. because of corporate limited ‘ K V liability. 1. ‘ Ta 3. A partner cannot dissolve a x65“ b I Warship if he Signs an express @5 12. Keeping minutes of all ' @Ag‘ ' partnership agreement clearly shareholder and director meetings. («Chi \ is the best way to ensure corporate 20. Gross undercapitalization can best- be agents have actual authority to described as carry out a particular duty. A . eliberately underfimding a @F .13. Corporate formalities refer to corporation. the meetings and paperwork b. negligently underfunding a . necessary to create and run a corporation. corporation] ‘ c. severely underfunding a ' ' corporation. @F 14. Directors and officers owe a (1. just plggd/uflderfimding a fiduciary duty to the corporation. corpor ' n. @® 15‘. A shareholder who wins a 22. Al, Betty & Chuck are equal derivative suit is “entitled to recover shareholders in ABC Inc. Al _& Betty the money he would hav made are killed in a car wreck. through dividends. ‘ ‘ [JABC is terminated because a @F 16. Each partner is responsible for shareholder is dead. . paying the tax on his share of the Wenninated because a ‘ «. partnership income even if h t “ majority of the shareholders are receives no money from th 7 dead. partnership. ' c. ABC survives because one shareholder is still alive. /F 17. A Limited Liability Company C is not affected. is essentially a corporation th lasts only a specified time 23. Bob owns one share of IBM’s ’ 1,000,000 outstanding shares. He paid @fl California, you create an 8- $100 for it. If IBM goes broke and still A; ‘ ,_ orporation by filing papers with has debts to pay, how much will Bob ‘ i the Secretary of State specifyi have to pay out of his pocket? you planning to use S-Corp s .1 0. 19. Which of the following is the closest b. Another $100. to the priority in which a partnership’s c. One millionth of the outstanding debts are to be paid after termination? debt. (1. He will be liable for all corporate @Creditors, inside lenders, return of debts in joint and several liability along capital, profit. with all the other shareholders of IBM. b. Creditors, ployees, outside ‘ ' lenders, rofit. /A 24. Al, Bob and Charlie are partners. c. EmployeWénders, profit, Their agreement states that the r'capitalf’ _ percentage of partnership liabilities for d. Outsidele/{nt‘érs creditors, inside which each is responsible is the same as lenders rofit. _ their current percentage ownership of the partnership based on their capital accounts. Al originally contributed t s a /’\ l ‘n' V ‘ . f L, “L; 653'} 6 $50,000, Bob $25,000, and Charlie’s at $0 (that’s zero, not a miSprint). None of the partners has made any further contribution or Withdrawal of capital. The partners collectively decide to shut - down the business. After going through ' all necessary steps of termination, the partnership still owes $30,000 to creditors. Of that amount, a. Bob will have to pay $10,000. b. Charlie won’t have to pay ' i anything unless A1 and Bob are both broke. c. Al won’t have to pay anything else because he’s already lost his $50,000 investment, more than the other two put together._ . Al will have to pay all of it because he has the most money. f no express agreement has been made between partners, the Uniform Partnership grants the following to each partner: ,1. full contracting authority, limited liability and equal shares of profits. b. full contracting authority, equal sharesof liability, equal profits. 1 contracting authority, full liability, equal profits. d. no contracting aumgfixy; equal sharesequal profits. 26. To avoid multiple contracts being made by individual partners, a partnership will often appoint a @appoint a managing partner. . have the board of directors restrict the authority of each partner. c. appoint a president. (1. make 1 )one partner a silent partn 27. If Bob and Joe have no‘agreement or understanding between them but both do work on a project and are determined by a court to be partners, their partnership has been created by a express agreement. ' plication. c. estoppel. d. ratification. 28. When a partner leaves a partnership and the remaining partners decide to keep operating the company,_the leaving partner is entitled to a. have the partnership wound up. b. sell his shares of stock. a valuation to determine the value of the business, which must be paid to him. w release of liability on all p . artnership debts. 29. When a corporate agent does the research necessary to make a decision properly, he 1/” .i’ihas used his business judgment. b. is liable to the corporation through a derivative suit. 0 - . need not attend the board meeting. has carried out due diligence. ...
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