MGMT 246 PRACTICE FINAL EXAM|UPDATED&VERIFIED|100% SOLVED|GUARANTEED SUCCESS

Patel and Underwood were equal shareholders in a corporation called Trackfield, Inc. ("the corporation"). Patel was seriously injured in an accident and was in a coma for two years, so Underwood assumed all responsibility for operating the corporation. Underwood was not familiar with the legal requirements of a corporation and thus he did not make any of the annual filings required by state law nor did he arrange for the corporation to file federal and state income tax returns. In addition, a creditor of the corporation called Underwood to ask when the corporation would be paying the money owed by the corporation to the creditor. Underwood replied: "I will pay my debts when I'm good and ready and not a minute sooner. You know I'm good for the money so stop bothering me." The creditor sued the corporation, Underwood and Patel for the money owed by the corporation to the creditor. The following two questions are based on the scenario presented on the other side of this card. How should the court rule as to Underwood? A.) Underwood should win because he is only a shareholder of the corporation and thus has the protection of the corporate veil. B.) Underwood should win because the corporation is the only appropriate defendant. C.) Underwood should lose because he failed to operate the corporation according to legal requirements and he claimed a corporate debt as his own. D.) Underwood should lose because he was dealing in bad faith. C.) Underwood should lose because he failed to operate the corporation according to legal requirements and he claimed a corporate debt as his own. How should the court rule as to Patel? A.) Patel should win because he is only a shareholder of the corporation and thus has the protection of the corporate veil. B.) Patel should win because the corporation is the only appropriate defendant. C.) Patel should lose because Underwood failed to operate the corporation according to legal requirements and Underwood claimed a corporate debt as his own. D.) Patel should lose because he was dealing in bad faith. A.) Patel should win because he is only a shareholder of the corporation and thus has the protection of the corporate veil. Goldberg, an employee of the law firm of Robbins & Robbins, was driving to the firm's office from his home one morning. Goldberg was talking on his cell phone with one of the firm's clients about a real estate transaction the firm was handling for the client. Goldberg concentrated on the phone call so much that he was inattentive while driving and this caused him to smash into another car. The driver of the other car sued Goldberg and the firm for negligence. Was Goldberg in the course and scope of his employment with the firm at the time of the accident? A.) Yes, because he was driving to the firm's office from his home. B.) Yes, because he was doing firm business. C.) No, because he was driving to the firm's office from his home. D.) No, because was doing firm business. B.) Yes, because he was doing firm business. Aoki, Bhakta and Charlie were all gas station owners in Fullerton. They agreed that they would all sell 87-octane gas for $4.029/gallon at a time when $3.999/gallon (only three cents less) was the average price in Fullerton. Some competitors sued Aoki, Bhakta and Charlie, alleging that Aoki, Bhakta and Charlie violated Section 1 of the Sherman Act. What should be the outcome? A.) Aoki, Bhakta and Charlie should win because the per se rule applies to this case. B.) Aoki, Bhakta and Charlie should win because the rule of reason applies to this case. C.) Aoki, Bhakta and Charlie should lose because the per se rule applies to this case. D.) Aoki, Bhatka and Charlie should lose because the rule of reason applies to this case. A.) Aoki, Bhakta and Charlie should win because the per se rule applies to this case. Haley and Bennett were lawyers who formed a partnership called the Law Offices of Haley & Bennett. Both were active in the partnership. Without Bennett's knowledge, Haley took money from the firm's client trust account (which contains money that belongs to clients but is temporarily held in trust by the firm) and left the country. Bennett did not get any of the money taken by Haley, who was charged with the crime of embezzlement. The clients whose money had been taken by Haley sued Bennett to recover their losses. What should be the result of this lawsuit? A.) Bennett should win because Haley & Bennett was a general partnership. B.) Bennett should win because Bennett did not benefit from Haley's crime. C.) The clients should win because Haley & Bennett was a general partnership. D. ) The clients should win because Bennett did not benefit from Haley's crime. C.) The clients should win because Haley & Bennett was a general partnership. Emma worked for Lily of the Valley, Inc., a corporation that manufactured baby supplies. According to her employment contract with the corporation, Emma was supposed to be paid $78,000/year plus a "Christmas bonus" of $10,000 if the corporation sold baby supplies worth at least $10 million over the previous twelve months. However, the corporation sold baby supplies worth $12 million over the previous twelve months. Is Emma entitled to the "Christmas bonus" of $10,000? A.) Yes, according to the duty of reimbursement. B.) Yes, according to the duty of compensation. C.) No, according to the duty of reimbursement. D.) No, according to the duty of compensation. B.) Yes, according to the duty of compensation. Muffy, an employee of Dean's Entertainment (a sole proprietorship owned by Dean), was subjected to many acts of sexual harassment by Dean during the month she worked for Dean's Entertainment. These many acts included several invitations for a date (she never accepted), fondling of her buttocks, and being addressed as "my little hot tamale" and "Deano's dream girl." Muffy finally decided to quit her job after Dean tried to tear her blouse off. Muffy sued Dean for sexual harassment. What should be the result? A.) Muffy should win since she was constructively terminated. B.) Muffy should win since she was actually terminated. C.) Dean should win since Muffy chose to quit her job. D.) Dean should win since Muffy acted unreasonably. A.) Muffy should win since she was constructively terminated. Which of the following best describes a violation of the duty of loyalty? A.) Deep quit his job at Taco Bell and opened a very similar fast food restaurant right across the street which competed with Taco Bell. B.) Lalu quit his job at Taco Bell and enrolled as a full-time MBA student at Cal State Fullerton in order to "get ahead." C.) Gemini, while employed at Taco Bell, regularly visited a nearby Del Taco because his sister was the manager of that Del Taco. D.) Mirza, while employed at Taco Bell, regularly worked at a nearby Del Taco because his sister was the manager of that Del Taco. D.) Mirza, while employed at Taco Bell, regularly worked at a nearby Del Taco because his sister was the manager of that Del Taco. Which of the following is the best guideline for avoiding alter ego liability? A.) Maintaining contact between the corporation and the shareholder. B.) Maintaining financial control between the corporation and the shareholder. C.) Maintaining behavioral control between the corporation and the shareholder. D.) Maintaining separateness between the corporation and the shareholder. D.) Maintaining separateness between the corporation and the shareholder. The two governing documents for a corporation in California are: A.) The articles of incorporation and the by-laws. B.) The partnership agreement and the by-laws. C.) The operating agreement and the articles of incorporation. D.) The partnership agreement and the operating agreement. A.) The articles of incorporation and the by-laws.