1. A partner may pursue his or her own interest without automatically violating the fiduciary duties that he or she owes to the firm.
2. True
3. False

1 points

Question 2

1. One of the advantages of a sole proprietorship is that the owner is not liable for the losses of the business.

   True

   False

1 points

Question 3

1. Caffeine Café, Inc., files its articles of incorporation with the appropriate government agency. Least likely to appear in the articles is the name of

   Â	Â	each of the corporation's incorporators.
   Â	Â	each of the corporation's shareholders.
   Â	Â	the corporation.
   Â	Â	the corporation's initial registered agent.

1 points

Question 4

1. A joint venture is treated much like a limited liability company.

   True

   False

1 points

Question 5

1. Joint ownership of property in and of itself creates a partnership.

   True

   False

1 points

Question 6

1. Stan incorporates his scientific products business as Tech Supply, Inc. Unless the articles of incorporation state otherwise, Tech Supply most likely has

   Â	Â	a finite, yet-to-be-determined existence.
   Â	Â	a one-year, nonrenewable existence.
   Â	Â	a one-year, renewable existence.
   Â	Â	perpetual existence.

1 points

Question 7

1. An operating agreement is not required to form a limited liability company.

   True

   False

1 points

Question 8

1. A corporation's internal management structure is described in its articles or bylaws.

   True

   False

1 points

Question 9

1. Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation. Lily and Moe are Kleen's officers. As in other corporations, the responsibility for the overall management of Kleen rests with

   Â	Â	the board of directors.
   Â	Â	the officers.
   Â	Â	the owners.
   Â	Â	the shareholders.

1 points

Question 10

1. The choice of a corporate name is subject to state approval.

   True

   False

1 points

Question 11

1. The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status.

   True

   False

1 points

Question 12

1. A franchisee is a party who sells a franchise.

   True

   False

1 points

Question 13

1. Once formed, a corporation cannot be dissolved voluntarily.

   True

   False

1 points

Question 14

1. In most states, a general partner is jointly and severally liable for all partnership obligations.

   True

   False

1 points

Question 15

1. A partnership for a definite term cannot be dissolved before the expiration of the term.

   True

   False

1 points

Question 16

1. In a limited liability company, members must participate in its management.

   True

   False

1 points

Question 17

1. Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is a legal entity created and recognized by

   Â	Â	a central federal administrative agency.
   Â	Â	a city or county clerk's office.
   Â	Â	an artificial legal person.
   Â	Â	state law.

1 points

Question 18

1. A foreign corporation is a corporation formed in another country.

   True

   False

1 points

Question 19

1. A sole proprietor may own and manage any type of business.

   True

   False

1 points

Question 20

1. Generally, there is a uniform body of national corporate law.

   True

   False

1 points

Question 21

1. Any person who buys preferred stock has priority over a holder of common stock to payment on the corporation's dissolution.

   True

   False

1 points

Question 22

1. To qualify as a professional corporation, Medical Clinic, P.C.,

   Â	Â	must be a corporation formed by professionals.
   Â	Â	must grant all shareholders voting rights.
   Â	Â	must have at least thirty-five shareholders.
   Â	Â	all of the choices.

1 points

Question 23

1. A firm named Scientific Discovery Corporation (SDC) makes an attempt to incorporate for a purpose other than making a profit. SDC is

   Â	Â	a foreign corporation.
   Â	Â	an alien corporation.
   Â	Â	a nonprofit corporation.
   Â	Â	not a corporation.

1 points

Question 24

1. Corporate officers hire corporate directors.

   True

   False

1 points

Question 25

1. A limited liability company is not a "citizen" of any state.

   True

   False

1 points

Question 26

1. Pola and Quincey want to form and do business as River Tours Corporation. A corporation can consist of

   Â	Â	no natural persons.
   Â	Â	one natural person but not more.
   Â	Â	one or more natural persons.
   Â	Â	only more than one natural person.

1 points

Question 27

1. "Piercing the corporate veil" means revealing to shareholders the internal rules of corporate management.

   True

   False

1 points

Question 28

1. An association cannot be a partnership without an express agreement.

   True

   False

1 points

Question 29

1. Express powers of a corporation can be found in the corporate bylaws.

   True

   False

1 points

Question 30

1. A corporation has perpetual existence in most states unless the articles of incorporation state otherwise.

   True

   False

1 points