BLAW 3310 Test 3 Schwemer UPDATED Questions and CORRECT Answers
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Course
BLAW 3310
Institution
BLAW 3310
BLAW 3310 Test 3 Schwemer UPDATED
Questions and CORRECT Answers
CHAPTER 12 - CORRECT ANSWER -
LLC and Personal Liability - CORRECT ANSWER - No member or manager is
personally liable for all debts.
Piercing the corporate veil - CORRECT ANSWER - A situation in which courts put aside
limited ...
BLAW 3310 Test 3 Schwemer UPDATED
Questions and CORRECT Answers
CHAPTER 12 - CORRECT ANSWER -
LLC and Personal Liability - CORRECT ANSWER - No member or manager is
personally liable for all debts.
Piercing the corporate veil - CORRECT ANSWER - A situation in which courts put aside
limited liability and hold shareholders or directors personally liable for a corporation's actions or
debts.
Forming a partnership - CORRECT ANSWER - Either an oral or written agreement must
be made between partners. Written is the most formal and may include terms such as finances,
management, and terms for dissolution.
General Partnership - CORRECT ANSWER - No state filing needed; is created when two
or more partners agree to form. Low startup cost.
Limited Partnership - CORRECT ANSWER - Only general partners have management
capabilities; other partners have limited liability.
Limited Liability Partnership - CORRECT ANSWER - LP created by professional
businesses such as dentists or attorneys.
Things that shareholders vote on - CORRECT ANSWER - Matters that change the
corporation's structure or existence (such as a merger with another firm or an amendment to the
corporation's articles of incorporation). Shareholders also vote for the board of directors.
Negative of Sole Proprietorships and Partnerships - CORRECT ANSWER - Unlimited
Liability
, Things partners have to agree on - CORRECT ANSWER - Mergers, dissolution, adding
new partners, major business decisions
Business judgement rule - CORRECT ANSWER - Makes directors and managers of
corporations immune from liability when problems result from honest mistakes in judgement, so
long as there is a reasonable basis for the decisions.
Proxy - CORRECT ANSWER - A written authorization by shareholders to cast their
votes, so that they do not have to show up in person.
CHAPTER 13 - CORRECT ANSWER -
The party that is paid is the _______ - CORRECT ANSWER - Payee
How many parties are on promissory notes? - CORRECT ANSWER - Two: The maker
and the payee
Bill of Exchange - CORRECT ANSWER - International Draft
Suretyship - CORRECT ANSWER - A guarantee that debts will be paid, often given by a
third party. The third party (surety) agrees to pay if the debtor will not.
A guarantor is a third party that may only be obligated to pay under certain circumstances.
Floating Lien - CORRECT ANSWER - A security interest in a group of property that
remains in place even after the exact items in that group of property change
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