BLAW 3310 Exam 3 Questions With Verified
Answers
SOLE PROPRIETORSHIP - answerperson doing business for himself
ADVANTAGES AND DISADVANTAGES OF SOLE PROPRIETORSHIP - answerfreedom,
control, full liability
PARTNERSHIP - answertwo or more persons carrying on business as owners for profit; must
I...
SOLE PROPRIETORSHIP - answer✔person doing business for himself
ADVANTAGES AND DISADVANTAGES OF SOLE PROPRIETORSHIP - answer✔freedom,
control, full liability
PARTNERSHIP - answer✔two or more persons carrying on business as owners for profit; must
INFER that partnership exists; individual partner can make decisions on basic things, but ALL
decide and agree on extraordinary things
LIMITED PARTNERSHIP - answer✔at least one general partner and at least one limited partner
OPERATIVE ACT TO FORM CORPORATION - answer✔filing document (Articles of
Incorporation) with Secretary of State
BYLAWS - answer✔rules that regulate and govern the internal operations of the corporation
RIGHTS OF CORPORATIONS - answer✔free speech, free from search and seizure without
warrant
RIGHT CORPORATION DOES NOT HAVE - answer✔5th amendment self incrimination
WHAT FRANCHISOR HAS TO DO - answer✔must give lots of info to franchisee; financial
returns
FTC FRANCHISE RULE - answer✔franchisor must give franchisee detailed info AT LEAST
10 DAYS PRIOR: names, address, phone, responsibilities of franchisor and franchisee, number
of franchisees and how many gone out of business
NOTE - answer✔"I PROMIES to pay"; TWO parties, maker signs it, payee is to whom it is
made to
DRAFT - answer✔"pay"; THREE parties drawer (signs it), payee (to whom it is made payable),
drawee (check=bank; non-check=whoever you're directing to pay the money)
IF SAYS "PAY TO THE ORDER OF" - answer✔person to whom it's made payable must SIGN
it, then DELIVER
IF SAYS "PAYABLE TO CASH/BEARER/NOBODY IN PARTICULAR" - answer✔this is
bearer instrument, JUST DELIVER IT, no sign
HOLDERS IN DUE COURSE (HDC) - answer✔parties who receive instruments negotiated to
them: VALUE, GOOD FAITH, AND NO KNOWLEDGE OF ANY CLAIMS OR DEFENSES
against the instrument
CASHIER'S CHECK - answer✔bank draws check payable on itself; favored because it's as good
as cash
SURETY - answer✔i'll pay regardless
GUARANTOR - answer✔i'll pay if the party who's supposed to does not
IF YOU DO HAVE TO PAY (AS SURETY/GUARANTOR) - answer✔you can go against the
party who agreed to pay the debt
ATTACHMENT - answer✔creation of security interest in favor of creditor; arises in
PERSONAL property, then you have rights to the collateral
PERFECTION - answer✔when creditors want to let people know of their security interest;
"telling the world"; businesses will file financing statements to let world know about their
security interest
PERFECTION: CONSUMER GOODS - answer✔take possession of them
FLOATING LIEN - answer✔any new inventory bought is still subject to the bank's lien
EXCEPTION TO SECURITY INTEREST - answer✔when you buy something free from the
security interest (ex. buying a car) the car is pledged to the bank, but when you BUY it, it's free
of that lien - buyer in the ordinary course of business
BUYERS IN ORDINARY COURSE OF BUSINESS - answer✔they do not have to worry about
liens
MECHANIC'S LIEN - answer✔someone who works on real estate: they can place a lien on the
property for unpaid bills
CAPTER 7 BANKRUPTCY - answer✔liquidation bankruptcy; all the nonexempt assets sold
and the cash is used to pay off creditors
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