LAW 531 Week 1 Knowledge Check

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LAW 531 Week 1
Knowledge Check



The material
presented below is not meant to be a comprehensive list of all you need to know
in the content area. Rather it is a starting point for building your knowledge
and skills. Additional study materials are recommended in each area below to
help you master the material.

Personalized
Study Guide Results:

Score: 18 / 18

Concepts Mastery
Questions

Sole
proprietorships and general partnerships 100% • 1

• 2• 3

Limited partnerships
and special partnerships 100% • 4

• 5• 6

Corporations
100% • 7

• 8• 9

Limited
liability companies and limited liability partnerships 100% • 10

• 11

• 12

Franchising,
licensing, and joint ventures 100% • 13

• 14

• 15

Alternative
forms of dispute resolution 100% • 16

• 17

• 18

Concept: Sole
proprietorships and general partnerships

Mastery : 100%
Questions : • 1

• 2• 3

Materials on the
concept:

• Sole
Proprietorship


Entrepreneurial Forms of Conducting Business


Entrepreneurship

• General
Partnership

• Formation of a
General Partnership

1.

Identify an
accurate statement about a sole proprietorship.

• A.

It is a form of
business that is seldom found in the United States.

• B.

It is a form of
business that has only one owner.

• C.

It is a separate
legal entity, distinct from an owner.

• D.

It is a business
form in which the owner enjoys limited liability.

2.

Sara and Cilia
run a café together. They share ownership of and liability for the café and
have come to an agreement about how the profits from the cafe should be divided
between them. If the cafe runs into debt, both Sara and Celia are responsible
for the debt. What form of business is best demonstrated in this scenario?

• A.

A sole
proprietorship

• B.

A corporation

• C.

A general
partnership

• D.

A limited
liability company

3.

What criterion
under the Uniform Partnership Act (UPA) must be met by a business, for it to
qualify as a general partnership?

• A.

The objective of
the partnership should be to create profits.

• B.

One of the
owners must be willing to assume completely liability of the business.

• C.

The partnership
should not involve more than two persons.

• D.

Only one owner
should take up the legal responsibility of contracts.



Concept: Limited
partnerships and special partnerships

Mastery : 100%
Questions : • 4

• 5• 6

Materials on the
concept:

• Limited
Partnership

• Introduction
to Limited Partnerships and Special Partnerships

• Limited
Partnerships and Special Partnerships

4.

What is true
about a limited partnership?

• A.

All the partners
are personally liable for partnership debts.

• B.

The partnership
cannot involve more than two individuals.

• C.

The general
partners do not invest capital or participate in the management of the
business.

• D.

The limited
partners are not personally liable for partnership debts beyond the amount
invested by them.

5.

Who among the
following is most likely to be a limited partner in a limited partnership?

• A.

David, who takes
up the task of work delegation in the business.

• B.

Kiara, who makes
contracts with suppliers for the partnership.

• C.

Kevin, who does
not have to make up for losses if a contract made by the partnership fails.

• D.

Nelson, who is
required to use his personal wealth to pay for any debts incurred by the
partnership.

6.

Who has
unlimited liability for the debts and obligations of limited partnerships?

• A.

Limited partners

• B.

General partners

• C.

Shareholders

• D.

Board of
directors



Concept:
Corporations

Mastery : 100%
Questions : • 7

• 8• 9

Materials on the
concept:

• Introduction
to Corporate Formation and Financing

• Nature of the
Corporation

• Corporate
Formation and Financing

• Publicly Held
and Closely Held Corporations

7.

What is a
characteristic of a corporation?

• A.

It is a separate
legal entity.

• B.

It is dissolved
after the death of any one shareholder.

• C.

Its shareholders
have unlimited liability.

• D.

Its existence
cannot be ended by the choice of it’s shareholders.

8.

Identify the
type of corporations in which there are thousands of shareholders and the shares
are traded on national stock exchanges.

• A.

Not-for-profit
corporations

• B.

Sole
proprietorships

• C.

Limited
partnerships

• D.

Publicly held
corporations

9.

Alpha Corp. has
very few shareholders and all of the shareholders belong to a single family.
The shareholders are involved in the operations of the business and frequently
make management decisions. What type of corporation does Alpha Corp. best
represent?

• A.

A closely held
corporation

• B.

A
government-owned corporation

• C.

A private corporation

• D.

A publicly held
corporation

Concept: Limited
liability companies and limited liability partnerships

Mastery : 100%
Questions : • 10

• 11

• 12

Materials on the
concept:

• Introduction
to Limited Liability Companies and Limited Liability Partnerships

• Limited
Liability Company (LLC)

• Limited
Liability Companies and Limited Liability Partnerships

• Limited
Liability Partnership (LLP)

10.

Identify the
true statement about limited liability companies.

• A.

They are created
by federal and not state laws.

• B.

They are not
separate legal entities like corporations.

• C.

They can be
taxed as partnerships.

• D.

They are
incorporated business entities.

11.

What is true
about the formation of limited liability companies?

• A.

Doctors and
lawyers most frequently form limited liability companies.

• B.

Owners can
establish their limited liability company in only one state.

• C.

Owners of
limited liability companies cannot conduct business in other states.

• D.

Sole proprietors
cannot form limited liability companies in any state.

12.

Delta Group is a
business firm created by a team of doctors. The business was formed as per the
state’s laws and is not taxed as a separate entity. The owners of the business
are not personally liable for the losses, debts, and obligations of the firm.
Identify the business form that is best illustrated in the scenario.

• A.

A limited
liability company

• B.

A general
partnership

• C.

A corporation

• D.

A limited
liability partnership

Concept:
Franchising, licensing, and joint ventures

Mastery : 100%
Questions : • 13

• 14

• 15

Materials on the
concept:

• Franchise

• Types of
Franchises

• Introduction
to Franchises and Special Forms of Business

• Joint Venture

• Licensing

Show More

13.

Nutristar is a
soft drink manufacturing company that wishes to expand its business. The
company has licensed another firm to manufacture its soft drinks and provided
the firm with the necessary confidential information about manufacturing. The
licensed company manufactures the soft drinks and distributes them. What type
of franchise is best illustrated in this scenario?

• A.

A processing
plant franchise

• B.

A
distributorship franchise

• C.

An area
franchise

• D.

A chain-style
franchise

14.

Identify the
business arrangement that involves two business firms pooling resources to work
on a single, mostly temporary, business project.

• A.

Franchise

• B.

Sole
proprietorship

• C.

Merger

• D.

Joint venture

15.

Gamma Inc. has
permitted another firm to operate under its name and use its trademarks and
service marks. This firm can now use the intellectual property of Gamma Inc. to
produce and distribute products. What business concept is best illustrated in
this scenario?

• A.

Merging

• B.

Licensing

• C.

Divesting

• D.

Acquiring

Concept:
Alternative forms of dispute resolution

Mastery : 100%
Questions : • 16

• 17

• 18

Materials on the
concept:

• Alternative
Dispute Resolution

• Negotiation

• Arbitration

• Mini-Trial

16.

Identify the
true statement about negotiation as an alternative form of dispute resolution.

• A.

The final
decision is always approved by a third party.

• B.

The two parties
involved may be represented by attorneys.

• C.

The court does
not permit the parties to negotiate before the trial.

• D.

The court has to
approve an agreement before it is signed by the two parties.

17.

Identify the
form of alternative dispute resolution in which the two involved parties go to
a neutral third party, who makes the final decision.

• A.

Arbitration

• B.

Negotiation

• C.

Mediation

• D.

Mini-trial

18.

Synergy Inc. is
involved in a dispute with Alpha Corp. Both companies have agreed to conduct a
private proceeding involving representatives from each side. They have also
appointed lawyers to present their arguments to these representatives. What
type of alternative dispute resolution is most likely being used in this
scenario?

• A.

Mediation

• B.

Arbitration

• C.

Mini-trial

• D.

Negotiation
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