Baylor University - Business Law (BL 3305) Agee - Exam 1
Questions With Complete Solutions
Are laws completely related to morals? Correct Answers Not
necessarily. Sometimes something can be illegal but morally
acceptable or legal but morally improper.
Discuss factors for a general partnership. Correct Answers 1.
Ease of formation: two or more co-own; little formality
2. Taxation: taxed per share
3. External liability: unlimited
4. Management: Right to control
5. Transferability: Assign interest with consent
6. Continuity: Dies with owner
Discuss factors of a sole proprietorship. Correct Answers 1.
Ease of formation: very easy
2. Taxation: Taxed directly to owner
3. External liability: unlimited
4. Management: owner controls it
5. Transfer-ability: Can sell it
6. Continuity: dies with owner
Explain the different types of federal courts Correct Answers
1. District courts - trial level courts
2. Court of Appeals - 12 judicial circuits to hear appeals from
district courts (only decide on questions of law, not facts)
3. US Supreme Court - highest court reviews federal appellate
decisions and state supreme court decisions
, 4. Special courts - US court of claims, US bankruptcy and tax
court. Usually have exclusive federal jurisdiction for particular
type of case.
Explain the different types of state courts Correct Answers 1.
Inferior trial courts - no record of proceedings. You'll need a
retrial in a district court.
2. Trial courts - Very formal court proceedings.
3. Appellate courts - Intermediate appellate courts
4. Supreme court of state - reviews decisions of appellate courts.
Explain the three tests to determine the limitations on
government Correct Answers 1. Rational relationship -
regulation must bear a rational relationship to legitimate
government interest - used for economic regulation
2. Strict scrutiny - requirement that regulation must be necessary
to promote a compelling governmental interest - used for
fundamental rights
3. Intermediate - regulation have a substantial relationship to an
important governmental objective - used for gender and
legitimacy
Explain the three types of rule-making within an agency.
Correct Answers 1. Formal - interested parties presented their
viewpoints at a formal hearing
2. Informal - interested parties submit written comments tot he
agency and they consider the documents.
3. Hybrid - No full hearing, but there may be limited cross-
examination on 1-2 key issues.
Questions With Complete Solutions
Are laws completely related to morals? Correct Answers Not
necessarily. Sometimes something can be illegal but morally
acceptable or legal but morally improper.
Discuss factors for a general partnership. Correct Answers 1.
Ease of formation: two or more co-own; little formality
2. Taxation: taxed per share
3. External liability: unlimited
4. Management: Right to control
5. Transferability: Assign interest with consent
6. Continuity: Dies with owner
Discuss factors of a sole proprietorship. Correct Answers 1.
Ease of formation: very easy
2. Taxation: Taxed directly to owner
3. External liability: unlimited
4. Management: owner controls it
5. Transfer-ability: Can sell it
6. Continuity: dies with owner
Explain the different types of federal courts Correct Answers
1. District courts - trial level courts
2. Court of Appeals - 12 judicial circuits to hear appeals from
district courts (only decide on questions of law, not facts)
3. US Supreme Court - highest court reviews federal appellate
decisions and state supreme court decisions
, 4. Special courts - US court of claims, US bankruptcy and tax
court. Usually have exclusive federal jurisdiction for particular
type of case.
Explain the different types of state courts Correct Answers 1.
Inferior trial courts - no record of proceedings. You'll need a
retrial in a district court.
2. Trial courts - Very formal court proceedings.
3. Appellate courts - Intermediate appellate courts
4. Supreme court of state - reviews decisions of appellate courts.
Explain the three tests to determine the limitations on
government Correct Answers 1. Rational relationship -
regulation must bear a rational relationship to legitimate
government interest - used for economic regulation
2. Strict scrutiny - requirement that regulation must be necessary
to promote a compelling governmental interest - used for
fundamental rights
3. Intermediate - regulation have a substantial relationship to an
important governmental objective - used for gender and
legitimacy
Explain the three types of rule-making within an agency.
Correct Answers 1. Formal - interested parties presented their
viewpoints at a formal hearing
2. Informal - interested parties submit written comments tot he
agency and they consider the documents.
3. Hybrid - No full hearing, but there may be limited cross-
examination on 1-2 key issues.
