LAW 531 ACTUAL FINAL EXAM

LAW 531 ACTUAL FINAL EXAM Which of the following is a distinguishing feature of a common law legal system? Requiring guilt be proven beyond a reasonable doubt The sole source of law is a comprehensive civil code An appeal process The making of law by the judges and the following of precedent Which best describes the types of agency authority held by officers of a corporation? Vicarious authority Express and obvious authority Implied and apparent authority only Express, implied, and apparent authority If an LLC fails to follow formalities such as keeping minutes of meetings, which of the following is true? A. Only the managers of a manager-managed LLC will lose limited liability. B. All members will lose their limited liability. C. This failure will not result in imposing personal liability on any member. D. Only the parties responsible for the failure will lose limited liability. Answer Rationale: Limited Liability Companies are not required to maintain the formalities of corporation. Martha started a flower shop as a sole proprietor. After 1 year, she was forced to close the shop because business was so bad. At that time, the business assets totaled $50,000, but the business liabilities totaled $125,000. Which of the following statements is true? Martha is personally liable for the additional $75,000. Martha’s business creditors can collect only the $50,000 of business assets. Martha’s business creditors can collect only the $50,000 now, but if Martha ever goes into business again, they can get the assets of the new business. Once Martha terminates the sole proprietorship, the business creditors cannot even get the $50,000.