Q&A Hero

Q: A publicly held corporation is any corporation whose shares are publicly traded in a securities market.

Q: A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet or by mail.

Q: A corporation cannot be formed without a profit-making purpose.

Q: The U.S. Postal Service is a public corporation.

Q: An alien corporation is a corporation formed in another country.

Q: The state can suspend the entity's corporate status until the taxes are paid or even dissolve the corporation for failing to pay taxes.

Q: When a corporation earns profits, it must pass them on to shareholders in the form of dividends.

Q: One of the key advantages of the corporate form is the unlimited liability of its owners.

Q: The day-to-day business of a corporation is managed by officers employed by the board of directors.

Q: A corporate director is an "owner" of the corporation.

Q: A corporation does not possess the same right of access to the courts as natural persons.

Q: State laws regarding corporations are uniform.

Q: A corporation is an artificial being.

Q: Jade, Kelly, and Lila organize a nonprofit businessJKL Markets, Inc.to buy groceries from wholesalers and sell them to consumers who buy a membership in JKL. Because the firm is a nonprofit entity, it is able to sell the groceries for less than a commercial grocer could. What form of business organization is JKL Markets? Is it significant that JKL is incorporated?

Q: Petra, Queenie, and Randall want to form Sales-to-Infinity, LLC (limited liability company). What should they provide in their operating agreement? If they fail to include some important operating details, what determines these details?

Q: Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of a. the amount of capital they contribute. b. the degree to which they participate in management. c. their transactions with the cooperative. d. the requirements of the state in which it was incorporated.

Q: Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other unincorporated cooperatives are generally treated like a. business trusts. b. corporations. c. joint stock companies. d. partnerships.

Q: Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is a. a business trust. b. a joint stock company. c. a joint venture. d. a syndicate.

Q: Consumers in Delta City form a business organization to provide, without profit, an economic service to its members. This is a. a business trust. b. a cooperative. c. a corporation. d. a joint stock company.

Q: As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is a. limited to his capital investment in the trust. b. limited to his personal assets. c. nothing. d. unlimited.

Q: As the trustee of a business trust, Dwight is required to a. manage the trust and distribute its profits. b. assume liability for the trust's debts. c. draft a written trust agreement. d. none of the choices.

Q: Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to a. avoid personal liability for the acts of the cooperative. b. obtain an exemption from state laws governing corporations. c. pay no taxes on their business income. d. pool their resources to gain an advantage in the market.

Q: Neverend Music Company and Monotonous Metronome Corporation form a joint stock company. A joint stock company can be formed for, at the most, a. an implied duration of not more than six months. b. a perpetual existence. c. a single activity or transaction. d. a stated duration of not more than one year.

Q: National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by a. partnership certificates. b. shares of stock. c. title documents. d. trust certificates.

Q: Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or a. a business trust. b. a joint stock company. c. a joint venture. d. a syndicate.

Q: Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This business organization is a. a business trust. b. a joint stock company. c. a joint venture. d. a syndicate.

Q: Peyton, Qiana, and River form a syndicate to buy a professional basketball franchise. This syndicate could be set up as a. a joint venture. b. a corporation. c. a sole proprietorship. d. a limited liability company.

Q: Shae's Caf and Tommy's Grill form a joint venture. Shae can participate in the venture's management a. only to the extent that she assumes liability for the venture's debts. b. only to the extent of her investment in the venture. c. to any extent. d. to no extent.

Q: Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to a. business trusts. b. cooperatives. c. corporations. d. partnerships.

Q: Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to build an office and retail complex. Their form of business organization is a. a business trust. b. a joint stock company. c. a joint venture. d. a syndicate.

Q: Chocolate Sundry LLC's members and managers are Devlin, Effie, and Flavia. After Devlin's relationship to the firm ends, Effie and Flavia agree to discontinue the business. This is a. illegal. b. optional. c. required. d. wrongful.

Q: Flip is a member of Great States Trucking LLC. Flip's relationship to Great States ends, but the firm continues to do business. This is a. dissociation. b. dissolution. c. winding up. d. wrongful.

Q: Cecilia's Day Spa, LLC, is a member-managed limited liability company. If the law in Cecilia's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to a. capital contributions. b. participation in management. c. the number of members. d. transactions with the firm.

Q: Simone is a manager of Rolling Hills Resort LLC, a limited liability company. Rolling Hills is formed in a state that does not explicitly create fiduciary duties for LLC managers but does require the exercise of good business judgment. Unless a court rules otherwise, Simone owes fiduciary duties to a. Rolling Hills's members. b. Rolling Hills's suppliers. c. Rolling Hills's customers. d. none of the choices.

Q: Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Jumpstart is formed in a state that imposes fiduciary duties on LLC managers. Kirby owes these duties to a. Jumpstart's members. b. Jumpstart's suppliers. c. Jumpstart's customers. d. none of the choices.

Q: Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management a. only to the extent that she assumes liability for the firm's debts. b. only to the extent of her investment in the firm. c. to any extent. d. to no extent.

Q: CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed otherwise, participants in the firm's management will be considered to include a. all members. b. no member. c. one member. d. two members, including at least one general partner.

Q: Homer's Remodeling, LLC, is a limited liability company. Among the members, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of a. corporate law. b. partnership law. c. sole proprietorship law. d. joint venture law.

Q: Qatar Global Investments is a foreign entitya firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can a. act as a creditor, but cannot otherwise invest or participate. b. become a member. c. not become a member, but can participate in its operations. d. not become a member or otherwise participate in its operations.

Q: StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be a. distributed according to the members' proportionate shares of ownership in the firm. b. divided equally among the members. c. forfeited to the state. d. reinvested in the business until the dispute is resolved.

Q: Jessica's Jumpin" Jelly Beans, LLC, is a limited liability company. Unless indicated otherwise on Jessica's federal tax form, the firm will be taxed as a. a cooperative. b. a corporation. c. a joint venture. d. a partnership.

Q: Jordana is a member of Klondike Coffee, LLC, a limited liability company. Jordana is liable for Klondike's debts a. in proportion to the total number of members. b. to the extent of his capital contribution. c. to the extent that the other members do not pay the debts. d. to the full extent.

Q: Jeri and Knute are members of Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours's liability, as members, Jeri and Knute are shielded from a. all liability. b. no liability. c. personal liability. d. "alter ego" liability.

Q: Farm2Fork, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as a. a corporation. b. a partnership. c. a sole proprietorship. d. a business trust.

Q: Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of a. all states. b. every state in which its members are citizens. c. no state. d. only the state in which it was formed.

Q: Mit-E Mart LLC was formed in New Jersey. Mit-E Mart's members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of a. all states. b. New Jersey and New York. c. New Jersey only. d. no state.

Q: Coco is considering forms of business organization for her concessions businessCoco's Cupcakes. Most states require that a limited liability company have at least a. no minimum number of members. b. at least one member. c. at least two members. d. at least three members, including at least one general partner.

Q: Greta is a member of Hovercraft LLC. As a member, Greta is a. a manager or officer, but not an owner. b. an investor, but not a manager, officer, or owner. c. an owner. d. a participant, but not an investor, manager, officer, or owner.

Q: Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency a. articles of certification. b. articles of formation. c. articles of organization. d. no specific documents.

Q: Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of a. a member of a joint venture. b. an owner of a sole proprietorship. c. a partner of a partnership. d. a shareholder of a corporation.

Q: A business trust is created by a written trust agreement.

Q: The owners of an unincorporated cooperative have joint liability for its obligations.

Q: The beneficiaries of a business trust are personally liable for its obligations.

Q: A cooperative must be incorporated.

Q: A business trust resembles a corporation.

Q: Like a corporation, the ownership of a joint stock company is represented by shares of stock.

Q: A syndicate may be organized as a corporation but not as a partnership.

Q: A joint stock company is a hybrid of a partnership and a corporation.

Q: A group of individuals getting together to finance a particular project may form a syndicate.

Q: A syndicate may exist in the form of a partnership but not a corporation.

Q: Joint venturers have the authority to enter into contracts for the business that will bind the joint venture.

Q: Most courts apply the same principles to joint ventures as they apply to corporations.

Q: A joint venturer can be held personally liable for the venture's debts.

Q: A joint venture resembles a partnership but is taxed like a corporation.

Q: When a limited liability company is dissolved, any member who did not wrongfully dissociate may participate in the winding up process.

Q: When a member dissociates form a limited liability company, the member's duty of loyalty continues.

Q: Generally, a dissociated member of a limited liability company (LLC) has the right to have his or her interest in the LLC bought out by the other members.

Q: A member of a limited liability company (LLC) has the power and the right to dissociate from the LLC at any time.

Q: Some states provide that in the absence of an agreement to the contrary each member of a limited liability company has one vote.

Q: Most limited liability company statutes have no provisions regarding members' meetings.

Q: A limited liability company must be managed by its members.

Q: A limited liability company must be managed by non-member managers.

Q: In many states, an operating agreement is not required for a limited liability company to exist.

Q: If there is no limited liability company (LLC) agreement covering a topic under dispute, the state LLC statute will govern the outcome.

Q: Foreign investors are not allowed to become limited liability company members.

Q: State limited liability company statutes are uniform.

Q: The members of a limited liability company enjoy limited liability.

Q: The alter-ego doctrine can be applied to a limited liability company.

Q: A limited liability company is a citizen of every state in which it does business.

Q: A limited liability company can be taxed as a corporation.