BLAW 210 GRIFFEATH WSU FINAL STUDY EXAM QUESTIONS WITH
SOLUTIONS GRADED A+ 2025/2026
✔✔Liability companies: - ✔✔Provides corporate protections without having the
complexities of a corporation
States have their own rule
Run be members instead of shareholders
✔✔Liability companies- Advantages: - ✔✔Members have limited liability
Can be taxed like a partnership
Easier to construct than a corporation
- File the articles of organization with the secretary of state
✔✔Liability companies- Disadvantages: - ✔✔Smaller LLCs sometimes appear to
provide more protection than they really do
Easy to pierce the corporate veil
✔✔Ability to Continue Business After Death - ✔✔The death of a sole proprietor will end
the business.
The death of a general partner will generally end the partnership, but the death of a
limited partner usually will not.
With the perpetual existence of a corporation, the death or withdrawal of a shareholder
will not cause the termination of the corporation.
The death of a member will not cause the LLC to fail.
✔✔"Piercing the corporate veil": - ✔✔Where a credit will ask the judge to hold the
owners of an LLC or corporation personally liable for the debts the LLC or corporation
and allows credit to go after the owner's home, personal bank account, and other
assets.
✔✔*Joint venture: - ✔✔A partnership for a limited time and purpose.
✔✔*Cooperative: - ✔✔A business that is usually incorporated to provide an economic
service to its member such as for purchasing in bulk.
Many times they are nonprofit corporations.
✔✔Syndicate: - ✔✔A group of investors who pool their money to finance a specific
project, usually real estate projects like a shopping center.
✔✔Franchises: - ✔✔A major player in the business world.
An individual purchases the right to operate an already established business model.
It is subject to the standards and specifications of the franchisor.
✔✔Characteristics of a corporation: - ✔✔Free transferability of shares
Perpetual existence
, - never ending
Centralized management
- Composed of the board of directors and officers
Limited liability of shareholders
✔✔Types of corporations: - ✔✔Publicly held
Many shares, often sold on the stock market
Closely (privately held)
Limits on how you get rid of your stock
✔✔Private Corporations: - ✔✔formed to conduct privately owned business
✔✔Publicly held corporations: - ✔✔For-profit corporations that have many
shareholders.
- Often large corporations and their shares are usually traded on organized securities
markets.
✔✔Closely/Privately held corporations: - ✔✔A private for-profit corporation whose
shares are usually owned by few shareholders who are family members, relatives, or
friends.
✔✔Delaware general corporation law: - ✔✔Friendly to big business
Legislature and courts move fast to match the law with the changing needs of business
✔✔Court of Chancery: - ✔✔Specialty courts that know business well
No juries
✔✔A corporation is a domestic corporation... - ✔✔in the state in which it is incorporated.
- Incorporated in your home state
- Common for small businesses
✔✔A corporation is a foreign corporation... - ✔✔in all other states and jurisdictions.
✔✔A corporation is an alien corporation... - ✔✔if it is incorporated in in another country.
✔✔Promoters and incorporators: - ✔✔These guys make contracts and deals for the
corporation before it exists
They buy land and raise capital
They are personally liable for the contracts unless and until the board of directors lets
them off the hook
- Incorporators sign the articles of incorporation
✔✔Articles of incorporation (corporate charter): - ✔✔The basic governing documents of
a corporation. It must be filed with the secretary of state of the state of incorporation.
SOLUTIONS GRADED A+ 2025/2026
✔✔Liability companies: - ✔✔Provides corporate protections without having the
complexities of a corporation
States have their own rule
Run be members instead of shareholders
✔✔Liability companies- Advantages: - ✔✔Members have limited liability
Can be taxed like a partnership
Easier to construct than a corporation
- File the articles of organization with the secretary of state
✔✔Liability companies- Disadvantages: - ✔✔Smaller LLCs sometimes appear to
provide more protection than they really do
Easy to pierce the corporate veil
✔✔Ability to Continue Business After Death - ✔✔The death of a sole proprietor will end
the business.
The death of a general partner will generally end the partnership, but the death of a
limited partner usually will not.
With the perpetual existence of a corporation, the death or withdrawal of a shareholder
will not cause the termination of the corporation.
The death of a member will not cause the LLC to fail.
✔✔"Piercing the corporate veil": - ✔✔Where a credit will ask the judge to hold the
owners of an LLC or corporation personally liable for the debts the LLC or corporation
and allows credit to go after the owner's home, personal bank account, and other
assets.
✔✔*Joint venture: - ✔✔A partnership for a limited time and purpose.
✔✔*Cooperative: - ✔✔A business that is usually incorporated to provide an economic
service to its member such as for purchasing in bulk.
Many times they are nonprofit corporations.
✔✔Syndicate: - ✔✔A group of investors who pool their money to finance a specific
project, usually real estate projects like a shopping center.
✔✔Franchises: - ✔✔A major player in the business world.
An individual purchases the right to operate an already established business model.
It is subject to the standards and specifications of the franchisor.
✔✔Characteristics of a corporation: - ✔✔Free transferability of shares
Perpetual existence
, - never ending
Centralized management
- Composed of the board of directors and officers
Limited liability of shareholders
✔✔Types of corporations: - ✔✔Publicly held
Many shares, often sold on the stock market
Closely (privately held)
Limits on how you get rid of your stock
✔✔Private Corporations: - ✔✔formed to conduct privately owned business
✔✔Publicly held corporations: - ✔✔For-profit corporations that have many
shareholders.
- Often large corporations and their shares are usually traded on organized securities
markets.
✔✔Closely/Privately held corporations: - ✔✔A private for-profit corporation whose
shares are usually owned by few shareholders who are family members, relatives, or
friends.
✔✔Delaware general corporation law: - ✔✔Friendly to big business
Legislature and courts move fast to match the law with the changing needs of business
✔✔Court of Chancery: - ✔✔Specialty courts that know business well
No juries
✔✔A corporation is a domestic corporation... - ✔✔in the state in which it is incorporated.
- Incorporated in your home state
- Common for small businesses
✔✔A corporation is a foreign corporation... - ✔✔in all other states and jurisdictions.
✔✔A corporation is an alien corporation... - ✔✔if it is incorporated in in another country.
✔✔Promoters and incorporators: - ✔✔These guys make contracts and deals for the
corporation before it exists
They buy land and raise capital
They are personally liable for the contracts unless and until the board of directors lets
them off the hook
- Incorporators sign the articles of incorporation
✔✔Articles of incorporation (corporate charter): - ✔✔The basic governing documents of
a corporation. It must be filed with the secretary of state of the state of incorporation.
