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Business Law Ivy Tech Final Exam | Questions with Answers Verified 100% Correct
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Business Law Ivy Tech Final Exam | Questions with Answers Verified 100% Correct
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Business Law Ivy Tech Final Exam | Questionswith Answers Verified 100% Correct
Rico works for Street Tacos Inc. The basis for Rico's contribution under the Federal Insurance
Contribution Act to help pay for benefits that will partially make up for his loss of income on
retirement is - ✔✔his annual wage base.
Deb and Elle are partners in Foundations, a counseling clinic. Deb manages the business. For
this service, unless the partnership agreement states otherwise, she is entitled to pay in
proportion to her - ✔✔none of the choices.
In most states, in a dispute on a partnership matter, a third party cannot sue an individual
partner but must file an action against the entire firm. - ✔✔False
Choosing a business organizational form that limits its owners' liability may lead to greater
profits for the firm. - ✔✔True
The member of a limited liability company has the power to dissociate from the firm at any
time, but may not have the right. - ✔✔True
In a sole proprietorship, the proprietor bears the burden of any liabilities incurred by the
business enterprise. - ✔✔True
Bhat and Cho do business as Day Glow Paints, a partnership. In most states, for the purposes of
collecting judgments and having accounting performed, this firm would be treated as -
✔✔an independent entity.
The Franchise Rule requires a franchisor to provide potential earnings figures to its prospective
franchisees. - ✔✔False
, eSports Inc. offers entrepreneurs the opportunity to operate a franchise under the eSports
trade name as the owner of a game-playing venue. To possible franchisees, eSports makes
earnings claims. For those claims, the franchisor - ✔✔must have a reasonable basis.
A businessperson who enters into a contract with an investor on behalf of a future corporation
is not personally liable on the deal, even though the firm is not yet formed, because the nature
of investment is risk. - ✔✔False
The primary document needed to incorporate a business is the articles of incorporation
because the articles serve as a primary source of authority for the firm's organization and
functions. - ✔✔True
Directors and officers whose failure to exercise due care results in harm to the corporation or
the shareholders can be held liable for negligence unless the business judgment rule applies. -
✔✔True
Shareholders' assumption of personal liability, as guarantors, for the obligations of a
corporation can enable the firm to obtain credit. - ✔✔True
Shareholders exercise ownership control through the power of their votes. - ✔✔True
Roy is a director of Sales Service Inc. Sales enters into a contract with TeleCenter Corporation in
which Roy has a personal interest. Roy must - ✔✔make a full disclosure of the conflict of
interest.
Ben is a director of Creation Corporation, an architectural firm. Without informing Creation,
Ben goes into business with Design, Inc., a Creation competitor. Ben is liable for breach of -
✔✔the duty of loyalty.
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