BUS 300 Final Exam Guide
comprehensive Questions and Answers
with Verified Solutions
Question 1:
Corporation
Answer:
shareholders have limited liability (they can lose their initial investment in
stocks) however they can also wind up being personally liable if they
abuse the corporate structure by committing fraud
Question 2:
General Partnership
Answer:
business in which partners share both responsibility and liability, both
joint and several
Question 3:
Sole Proprietorship
Answer:
a business owned and managed by a single individual
Question 4:
Limited Liability Company (LLC)
Answer:
A hybrid form of business enterprise that offers the limited liability of the
corporation but the tax advantages of a partnership, has members (not
shareholders since it is not a corp) - it is similar to a sub S corporation
,Question 5:
S Corporation
Answer:
A unique government creation that looks like a corporation but is taxed
like partnership
Question 6:
Closely Held Corporation
Answer:
a type of corporation that issues stock to only a few people, who are often
family members
Question 7:
Fiduciary Duty
Answer:
That duty owed by an agent to act in the highest good faith toward the
principal and not to obtain any advantage over the latter by the slightest
misrepresentation, concealment, duress or pressure.
Question 8:
Class action
Answer:
a lawsuit filed by plaintiff - court determines whether others have suffered
similar injuries and then certifies a class of plaintiffs
Question 9:
Audit
Answer:
to check the accuracy of financial accounts and records
, Question 10:
1933 Securities Act
Answer:
sets forth accounting and disclosure requirements for initial offerings of
securities (stocks and bonds)
Question 11:
Corporate Veil
Answer:
Shields individual investors in a corporation from financial or legal liability
beyond their initial investment
Question 12:
Incorporator
Answer:
an individual who applies for incorporation on behalf of a corporation
Question 13:
Article of incorporation
Answer:
a written legal document that defines ownership and operating
procedures and conditions for the business, filed with state in order to
incorporate
comprehensive Questions and Answers
with Verified Solutions
Question 1:
Corporation
Answer:
shareholders have limited liability (they can lose their initial investment in
stocks) however they can also wind up being personally liable if they
abuse the corporate structure by committing fraud
Question 2:
General Partnership
Answer:
business in which partners share both responsibility and liability, both
joint and several
Question 3:
Sole Proprietorship
Answer:
a business owned and managed by a single individual
Question 4:
Limited Liability Company (LLC)
Answer:
A hybrid form of business enterprise that offers the limited liability of the
corporation but the tax advantages of a partnership, has members (not
shareholders since it is not a corp) - it is similar to a sub S corporation
,Question 5:
S Corporation
Answer:
A unique government creation that looks like a corporation but is taxed
like partnership
Question 6:
Closely Held Corporation
Answer:
a type of corporation that issues stock to only a few people, who are often
family members
Question 7:
Fiduciary Duty
Answer:
That duty owed by an agent to act in the highest good faith toward the
principal and not to obtain any advantage over the latter by the slightest
misrepresentation, concealment, duress or pressure.
Question 8:
Class action
Answer:
a lawsuit filed by plaintiff - court determines whether others have suffered
similar injuries and then certifies a class of plaintiffs
Question 9:
Audit
Answer:
to check the accuracy of financial accounts and records
, Question 10:
1933 Securities Act
Answer:
sets forth accounting and disclosure requirements for initial offerings of
securities (stocks and bonds)
Question 11:
Corporate Veil
Answer:
Shields individual investors in a corporation from financial or legal liability
beyond their initial investment
Question 12:
Incorporator
Answer:
an individual who applies for incorporation on behalf of a corporation
Question 13:
Article of incorporation
Answer:
a written legal document that defines ownership and operating
procedures and conditions for the business, filed with state in order to
incorporate
