BUS263 - MID-TERM QUESTIONS WITH VERIFIED
ANSWERS
False - Answers - a partnership is the easier business organization to form
True - Answers - In a sole proprietorship, the owner may keep all of the profits
True - Answers - for the purpose of forming a partnership, a "person" can be another
partnership
False - Answers - Mia works as an assistant in a pharmacy. Her receipt of monthly
wages her a partner in the pharmacy
True - Answers - Under the RUPA, partner can sue another partner or the partnership
itself to enforce his or her partnership rights as expressed in the RUPA or granted by
the partnership agreement.
True - Answers - corporations are sometimes referred to as "creatures of the state"
because the corporate entity is created under the authority of a state or federal statute.
False - Answers - A corporation is considered a citizen of the state in which it is
incorporated and not the state where it has its principal place of business
True - Answers - the shareholders of an S corporation have the profits or loses of the
corporation taxed directly to them in order to avoid double taxation
False - Answers - Janet is the promoter of a corporation called Time, Inc., which is in
the process of being formed. Janet rents office space in Time's name. Time is bound by
Janet's contract.
True - Answers - Par value is the value placed on the shares of stock at incorporation.
False - Answers - Agency is the legal relationship in which one party, the principal,
transacts business for and under the control of the second, the agent.
False - Answers - Non-agent-employees have the authority to, and usually do, deal with
third parties on behalf of the principal.
False - Answers - All fiduciary relationships are agency relationships.
True - Answers - An employer's vicarious liability for its employee's actions is based on
the principal of respondeat superior.
False - Answers - Most of the time, vicarious liability is applied to intentional torts.
ANSWERS
False - Answers - a partnership is the easier business organization to form
True - Answers - In a sole proprietorship, the owner may keep all of the profits
True - Answers - for the purpose of forming a partnership, a "person" can be another
partnership
False - Answers - Mia works as an assistant in a pharmacy. Her receipt of monthly
wages her a partner in the pharmacy
True - Answers - Under the RUPA, partner can sue another partner or the partnership
itself to enforce his or her partnership rights as expressed in the RUPA or granted by
the partnership agreement.
True - Answers - corporations are sometimes referred to as "creatures of the state"
because the corporate entity is created under the authority of a state or federal statute.
False - Answers - A corporation is considered a citizen of the state in which it is
incorporated and not the state where it has its principal place of business
True - Answers - the shareholders of an S corporation have the profits or loses of the
corporation taxed directly to them in order to avoid double taxation
False - Answers - Janet is the promoter of a corporation called Time, Inc., which is in
the process of being formed. Janet rents office space in Time's name. Time is bound by
Janet's contract.
True - Answers - Par value is the value placed on the shares of stock at incorporation.
False - Answers - Agency is the legal relationship in which one party, the principal,
transacts business for and under the control of the second, the agent.
False - Answers - Non-agent-employees have the authority to, and usually do, deal with
third parties on behalf of the principal.
False - Answers - All fiduciary relationships are agency relationships.
True - Answers - An employer's vicarious liability for its employee's actions is based on
the principal of respondeat superior.
False - Answers - Most of the time, vicarious liability is applied to intentional torts.
