Which of the following is not an advantage of operating abusiness as a sole proprietorship? Question 1 options:
Ease of formation.
Limited personal liability.
The right to receive all of the profits of the business.
Easy transferability of ownership.
Save
Question 2 (5 points)
Which of the following is true regarding the liability of thepartners in a properly formed and run limited partnership? Question2 options:
Both the limited and general partners have unlimited liability forthe partnership debts.
The limited partners have unlimited liability and the generalpartners have limited liability for the partnership debts.
Neither the limited nor the general partners have unlimitedliability for the partnership debts.
The limited partners have limited liability and the generalpartners have unlimited liability for the partnershipdebts.
Save
Question 3 (5 points)
What is the most important difference between a limited partnershipand a limited liability partnership? Question 3 options:
There must be one partner with unlimited liability in alimited partnership, but not in a limited liabilitypartnership.
A limited partnership is not a taxable entity, but a limitedliability partnership is a taxable entity.
There must be one partner with unlimited liability in a limitedliability partnership, but not in a limited partnership.
There is a maximum number of partners permitted in a limitedpartnership, but not in a limited liability partnership.
Save
Question 4 (5 points)
Which of the following is not true about a limited liabilitycompany? Question 4 options:
Limited liability companies can be managed by all members.
A filing with the appropriate state office is required to form alimited liability company.
Federal law provides that limited liability companies mustalways be taxed as partnerships.
Limited liability companies can be managed by managers.
Save
Question 5 (5 points)
Which of the following is not a characteristic of a properly formedand run corporation? Question 5 options:
Perpetual existence.
Free transferability of shares.
Unlimited liability of owners.
Centralized management.
Save
Question 6 (5 points)
The duty of loyalty owed by a corporate officer or director to acorporation means that officers and directors: Question 6options:
Cannot make a secret profit on a transaction involving thecorporation.
Cannot receive any compensation from sources other than thecorporation.
Must not receive compensation for serving on the board ofdirectors.
Must devote themselves full-time to the corporation.
Save
Question 7 (5 points)
Under the business judgment rule: Question 7 options:
Directors and officers have an obligation to exercise soundbusiness judgment, and any failure to do so results in a rebuttablepresumption of negligence.
Directors and officers have an obligation to exercise soundbusiness judgment, and any failure to do so is per se negligencethat results in liability to the corporation.
Directors and officers are never liable in suits filed against themby shareholders.
Directors and officers are not liable for honest mistakes ofjudgment.
Save
Question 8 (5 points)
Under the 1933 Securities Act, a person responsible may be heldliable for: Question 8 options:
A material omission or misstatement.
Intentional fraud.
Failure to file a registration statement or deliver a prospectus asrequired by law.
All other answers are correct.
Save
Question 9 (5 points)
When an insider discloses material insider information to anoninsider tippee, the tipper is liable for: Question 9options:
The profits of all traders during the period before the informationbecomes public.
The tippee’s profits, but not the profits made by any remotetippees.
The tipper’s own trading only.
The profits of both the immediate tippee, and the profits ofany remote tippees.
Save
Question 10 (5 points)
An agent desiring to not be held liable on contracts entered intoon behalf of the principal should make sure that the principal is:Question 10 options:
Fully disclosed.
Undisclosed.
Partially disclosed.
Either partially disclosed or fully disclosed.
Save
Question 11 (5 points)
Compared to an employee, an independent contractor is characterizedby: Question 11 options:
Less ability to hire others to assist them.
A lack of liability for their own actions.
More freedom to do their work in the manner theydetermine.
Not being paid as much for the work performed.
Save
Question 12 (5 points)
Which of the following are protected classes under Title VII of theCivil Rights Act of 1964? Question 12 options:
Race, national origin, and sex.
Race, national origin, and political affiliation.
National origin, race, and alien status.
Race, religion, and left-handedness.
Save
Question 13 (5 points)
In addition to not discriminating on the basis of religion, anemployer is required to: Question 13 options:
Determine the strength of an employee’s religious beliefs beforemaking accommodations that have an impact on other employees.
Make reasonable accommodations for employees’ religiouspractices and observances.
Allow employees to take timeoff on their day of worship.
Identify the religious beliefs of its employees.
Save
Question 14 (5 points)
The Americans with Disabilities Act requires that: Question 14options:
Persons with qualifying disabilities be given preference in hiringwhenever possible.
Persons with disabilities notify a potential employer ofdisabilities prior to being hired.
Applicants for jobs are asked about their disabilities in order toidentify them.
Employers make reasonable accommodations to accommodateemployees’ disabilities.
Save
Question 15 (5 points)
A partner can be held liable to perform on contracts entered intoby his partners, but never for the torts of his partners. Question15 options:
True
False
Save
Question 16 (5 points)
Assuming that a franchise agreement establishes the franchisee asan independent contractor in relation to the franchisor, thefranchisor and franchisee usually are not liable for each other’storts. Question 16 options:
True
False
Save
Question 17 (5 points)
A statutory insider under Sections 16 (a) & (b) of theSecurities Exchange Act of 1934 is liable for so-called short-swingprofits even if he/she has not used inside information. Question 17options:
True
False
Save
Question 18 (5 points)
The doctrine that holds the principal liable for the negligence ofan agent who is acting within the scope of his authority is calledrespondeat superior. Question 18 options:
True
False
