BUL 3130 TEST 1 QUESTIONS WITH
VERIFIED ANSWERS
Limited Liability Companies can only be capitalized through debt from private or
commercial lenders. (t/f) - Answer-false
In order to form an LLC in the sate of Florida, a written management agreement must
be submitted to the state along with Articles of Organization. (t/f) - Answer-false
A corporation incorporated in Utah and doing business in Nevada is classified as a(n)
corporation in Nevada - Answer-foreign
A person who performs pre-incorporation duties on behalf of the forming corporation is
called a - Answer-promoter
Private equity funding provided by a group of professional investors for use in
developing a business is called . - Answer-venture capital
A corporation exists as an independent legal person separate from its principals. (t/f) -
Answer-true
To qualify for Subchapter S status with the IRS, a majority of the shareholders must
consent to the Subchapter S designation (t/f) - Answer-false
Any corporation that does not become profitable is designated as a "non-profit
corporation". (t/f) - Answer-false
Which of the following statements is incorrect? - Answer-A corporation may not incur
obligations separate from those of its principals.
Which of the following is NOT a factor used by courts to determine whether to pierce the
corporate veil? - Answer-Poor management decisionmaking by inadequately trained
managers
Immediately after filing Articles of Incorporation, a corporation's first act should be to
. - Answer-Hold an orginizational meeting
CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name.
The loan is payable with interest over five years. After paying on the loan regularly for
two years, the business falters due to the economy, and CJ and Danny default on the
loan. Their business has no assets. Which of the following statements best describes
CJ and Danny's liability in this case? - Answer-CJ and Danny have no personal liability
for the debt unless they pledged personal assets as collateral or signed a personal
guarantee.
Which of the following is not an equitable remedy? - Answer-money damages
Damages intended to punish a wrongdoer are called . - Answer-punitive
damages
, In which of the following situations would a delegation of contractual duties be allowed?
- Answer-a painter hired to paint a house
When a party has knowledge that either a complete or a partial breach will occur by the
other party and therefore refuses to perform, this is referred to as a(n)
. - Answer-anticipatory repudiation
Steve is an avid bicyclist and sends in a $150 fee to participate in an across-the-state
ride in the Midwest. A week before the ride, he breaks his leg. Unless the contract
specifically provides for no refunds under any conditions, on what basis can Steve
receive a refund? - Answer-impossibility
When a party successfully sues for an equitable remedy for a breach of contract, that
party will not receive a monetary award. (t/f) - Answer-true
Nominal damages (e.g. damages in the amount of $1) are rarely awarded in contract
cases. (t/f) - Answer-true
Restitution is classified as an equitable remedy. (t/f) - Answer-false
Liquidated damages must be directly related to the breach of contract for which they are
compensating the non-breaching party and are not intended to be punitive. (t/f) -
Answer-true
Substantial performance will be found where there has been a breach that is not
material to the contract. (t/f) - Answer-true
The only state that has not adopted the Uniform Commercial code is .
- Answer-Louisiana
Which of the following would not be considered tangible property? - Answer-a patent
If Continental Tires agrees to purchase all of the rubber that a particular Brazilian rubber
plantation can produce, this would be an example of a(n)
. - Answer-output contract
VERIFIED ANSWERS
Limited Liability Companies can only be capitalized through debt from private or
commercial lenders. (t/f) - Answer-false
In order to form an LLC in the sate of Florida, a written management agreement must
be submitted to the state along with Articles of Organization. (t/f) - Answer-false
A corporation incorporated in Utah and doing business in Nevada is classified as a(n)
corporation in Nevada - Answer-foreign
A person who performs pre-incorporation duties on behalf of the forming corporation is
called a - Answer-promoter
Private equity funding provided by a group of professional investors for use in
developing a business is called . - Answer-venture capital
A corporation exists as an independent legal person separate from its principals. (t/f) -
Answer-true
To qualify for Subchapter S status with the IRS, a majority of the shareholders must
consent to the Subchapter S designation (t/f) - Answer-false
Any corporation that does not become profitable is designated as a "non-profit
corporation". (t/f) - Answer-false
Which of the following statements is incorrect? - Answer-A corporation may not incur
obligations separate from those of its principals.
Which of the following is NOT a factor used by courts to determine whether to pierce the
corporate veil? - Answer-Poor management decisionmaking by inadequately trained
managers
Immediately after filing Articles of Incorporation, a corporation's first act should be to
. - Answer-Hold an orginizational meeting
CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name.
The loan is payable with interest over five years. After paying on the loan regularly for
two years, the business falters due to the economy, and CJ and Danny default on the
loan. Their business has no assets. Which of the following statements best describes
CJ and Danny's liability in this case? - Answer-CJ and Danny have no personal liability
for the debt unless they pledged personal assets as collateral or signed a personal
guarantee.
Which of the following is not an equitable remedy? - Answer-money damages
Damages intended to punish a wrongdoer are called . - Answer-punitive
damages
, In which of the following situations would a delegation of contractual duties be allowed?
- Answer-a painter hired to paint a house
When a party has knowledge that either a complete or a partial breach will occur by the
other party and therefore refuses to perform, this is referred to as a(n)
. - Answer-anticipatory repudiation
Steve is an avid bicyclist and sends in a $150 fee to participate in an across-the-state
ride in the Midwest. A week before the ride, he breaks his leg. Unless the contract
specifically provides for no refunds under any conditions, on what basis can Steve
receive a refund? - Answer-impossibility
When a party successfully sues for an equitable remedy for a breach of contract, that
party will not receive a monetary award. (t/f) - Answer-true
Nominal damages (e.g. damages in the amount of $1) are rarely awarded in contract
cases. (t/f) - Answer-true
Restitution is classified as an equitable remedy. (t/f) - Answer-false
Liquidated damages must be directly related to the breach of contract for which they are
compensating the non-breaching party and are not intended to be punitive. (t/f) -
Answer-true
Substantial performance will be found where there has been a breach that is not
material to the contract. (t/f) - Answer-true
The only state that has not adopted the Uniform Commercial code is .
- Answer-Louisiana
Which of the following would not be considered tangible property? - Answer-a patent
If Continental Tires agrees to purchase all of the rubber that a particular Brazilian rubber
plantation can produce, this would be an example of a(n)
. - Answer-output contract
