Chapters
17 & 18 Examination
True/False
Indicate
whether the sentence or statement is true or false.
____
1.
A limited liability company offers the limited liability of a
corporation.
____
2.
A general partner has no voice in the management of a limited
partnership.
____
3.
State corporate laws are entirely uniform.
____
4.
A corporation can have perpetual existence under most states’ statutes.
Multiple
Choice
Identify
the letter of the choice that best completes the statement or answers the
question.
____
5.
Sally is considering forms of business organization for her
construction-equipment business. For purposes of owning property and being a
party to litigation, forms that are legal entities separate from their owners
include
|
a. |
corporations
only. |
|
b. |
limited
liability companies only. |
|
c. |
corporations
and limited liability companies. |
|
d. |
none
of the above. |
____
6.
Jill is considering forms of business organization for her
general-merchandise wholesale business. One advantage of the limited liability
company form, with respect to tax options, is its
|
a. |
flexibility. |
|
b. |
lack
of options. |
|
c. |
rigidity. |
|
d. |
none
of the above. |
____
7.
Alpha Footwear, LP, is a limited partnership. Beth, a limited partner,
participates in the firm’s management. Crafted Soles Corporation (CSC), is one
of the firm’s creditors. Based on Beth’s conduct, CSC believes that she is a
general partner. In terms of her liability for the firm’s obligations to CSC,
Beth has, in relation to the general partners,
|
a. |
some,
but less, liability. |
|
b. |
more
liability. |
|
c. |
no
liability. |
|
d. |
the
same liability. |
____
8.
Anderson Family Enterprises is a closely held corporation and thus may
limit the sale of its shares to outsiders
|
a. |
by
reasonable restrictions on transfer. |
|
b. |
by
requiring that shares may be transferred only to certain shareholders. |
|
c. |
in
all cases. |
|
d. |
in
no case. |
____
9.
Eve and Fran want to market a new line of cooking appliances. To avoid
income taxes at the corporate level, they should form
|
a. |
a
C corporation. |
|
b. |
a
close corporation. |
|
c. |
an
S corporation. |
|
d. |
a
private corporation. |
____
10.
Coast-to-Coast Distribution, Inc., is a direct-mail distribution company.
Like most corporations, Coast-to-Coast’s employees include its
|
a. |
board
of directors. |
|
b. |
incorporators. |
|
c. |
officers. |
|
d. |
shareholders. |
Chapters
17 & 18 Examination
Answer
Section
TRUE/FALSE
1.
ANS:
T
REF:
397
OBJ:
TYPE: =
2.
ANS:
F
REF:
405
OBJ:
TYPE: =
3.
ANS:
F
REF:
413
OBJ:
TYPE: =
4.
ANS:
T
REF:
417
OBJ:
TYPE: N
MULTIPLE
CHOICE
5.
ANS:
C
REF:
400
OBJ:
TYPE: =
6.
ANS:
A
REF:
400
OBJ:
TYPE: =
7.
ANS:
D
REF:
405
OBJ:
TYPE: N
8.
ANS:
A
REF:
415
OBJ:
TYPE: =
9.
ANS:
C
REF:
416
OBJ:
TYPE: +
10.
ANS:
C
REF:
422
OBJ:
TYPE: =