Legal2 Page 1
Terms in this set (508)
A $5,000 promissory note payable to the order of Neptune is A holder in due course to the extent of $3,333
discounted to Bane by blank endorsement for $4,000. King
steals the note from Bane and sells it to Ott who promises to
pay King $4,500. After paying King $3,000, Ott learns that
King stole the note. Ott makes no further payment to King. Ott
is
A $10,000,000 offering of corporate stock intended to be made The offering was made through a general solicitation or advertising.
pursuant to the provisions of Rule 506 of Regulation D of the
Securities Act of 1933 would not be exempt under Rule 506 if
Able, as agent for Baker, an undisclosed principal, contracted Baker individually on the check
with Safe to purchase an antique car. In payment, Able issued
his personal check to Safe. Able could not cover the check but
expected Baker to give him cash to deposit before the check
was presented for payment. Baker did not do so and the check
was dishonored. Baker's identity became known to Safe. Safe
may not recover from
The above instrument is a Draft
Absent a specific provision in its articles of incorporation, a Amend the articles of incorporation
corporation's board of directors has the power to do all of the
following, except
According to the Securities Act of 1933, which of the following If an issuer sells a security and fails to meet certain disclosure requirements, the purchaser
statements is correct regarding an issuer of securities? may sell it back to the issuer and recover the price paid.
Acme Corp. intends to make a public offering in several states Acme may make an oral offer to sell the common stock to a prospective investor after a
of 250,000 shares of its common stock. Under the Securities registration statement has been filed but before it becomes effective.
Act of 1933,
Acorn Corp. wants to acquire the entire business of Trend A cash tender offer, whereby Acorn acquires at least 90% of Trend's shares, followed by a
Corp. Which of the following methods of business combination short-form merger of Trend into Acorn
will best satisfy Acorn's objectives without requiring the
approval of the shareholders of either corporation?
Adler Inc. is a reporting company under the Securities Any person who owns more than 10% of Adler's common stock must file a report with the
Exchange Act of 1934. The only security it has issued is voting SEC.
common stock. Which of the following statements is correct?
After which of the following situations would it usually not be The destruction of the subject matter of the agency
necessary to notify third parties of the termination of an
agency's existence?
An agent will usually be liable under a contract made with a Disclosed principal: No
third party when the agent is acting on behalf of a(an) Undisclosed principal: Yes
All of the following distributions to stockholders are Stock splits
considered asset or capital distributions, except
Alpine Corporation manufactures and sells a high-end line of Will be tested under the rule of reason and is legal if found to be reasonable
featherweight luggage. In order to realize the full profit
potential of its products, Alpine decides to enter into a
franchising arrangement with selected outlets throughout the
country. Its basic arrangement is to grant each outlet the
exclusive right to sell in a designated geographic area and for
each outlet not to sell outside its designated area. This
arrangement
The antifraud provisions of Rule 10b-5 of the Securities Require that the wrongful act must be accomplished through the mail, any other use of
Exchange Act of 1934 interstate commerce, or through a national securities exchange
The apparent authority of a partner to bind the partnership in Will be effectively limited by a formal resolution of the partners of which third parties are
dealing with third parties aware
An appliance seller promised a restaurant owner that a home The express warranty that the goods conform to the seller's promise
dishwasher would fulfill the dishwashing requirements of a
large restaurant. The dishwasher was purchased but it was not
powerful enough for the restaurant. Under the Sales Article of
the UCC, what warranty was violated?
Legal2 2/5/2026
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Ashley needs to endorse a check that had been endorsed by two Qualified
other individuals prior to Ashley's receipt of the check. Ashley
does not want to have surety liability, so Ashley endorses the
check "without recourse." Under the Negotiable Instruments
Article of the UCC, which of the following types of
endorsement did Ashley make?
Assuming each of the following is negotiable, which qualifies A trade acceptance
as a draft under the UCC Negotiable Instruments Article?
Ball borrowed $10,000 from Link. Ball, unable to repay the No, because Link is a holder in due course of the check
debt on its due date, fraudulently induced Park to purchase a
piece of worthless costume jewelry for $10,000. Ball had Park
write a check for that amount naming Link as the payee. Ball
gave the check to Link in satisfaction of the debt Ball owed
Link. Unaware of Ball's fraud, Link cashed the check. When
Park discovered Ball's fraud, Park demanded that Link repay
the $10,000. Under the Negotiable Instruments Article of the
UCC, will Link be required to repay Park?
A bank issues a negotiable instrument that acknowledges Certificate of deposit
receipt of $50,000. The instrument also provides that the bank
will repay the $50,000 plus 8% interest per annum to the bearer
90 days from the date of the instrument. The instrument is a
Bell Co. owned 20 engines which it deposited in a public June 13-Bell negotiated the warehouse receipt to Spark.
warehouse on May 5, receiving anegotiable warehouse receipt
in its name. Bell sold the engines to Spark Corp. On which of
the following dates did the risk of loss transfer from Bell to
Spark?
Bixler obtained an option on a building he believed was Even if, as Bixler claimed, the building was fairly worth more than $200,000, Bixler
suitable for use by a corporation he and two other individuals nevertheless must return the $45,000 to the corporation.
were organizing. After the corporation was successfully
promoted, Bixler met with the Board of Directors who agreed
to acquire the property for $200,000. Bixler deeded the
building to the corporation and the corporation began business
in it. Bixler's option contract called for the payment of only
$155,000 for the building and he purchased it for that price.
When the directors later learned that Bixler paid only $155,000,
they demanded the return of Bixler's $45,000 profit. Bixler
refused, claiming the building was worth far more than
$200,000 both when he secured the option and when he deeded
it to the corporation. Which of the following statements
correctly applies to Bixler's conduct?
Blare bought a house and provided the required funds in the The bank has accepted, but Blare has secondary liability.
form of a certified check from a bank. Which of the following
statements correctly describes the legal liability of Blare and
the bank?
Blue, a used car dealer, appointed Gage as an agent to sell Both Blue and Gage
Blue's cars. Gage was authorized by Blue to appoint subagents
to assist in the sale of the cars. Vond was appointed as a sub-
agent. To whom does Vond owe a fiduciary duty?
Bolt Corp. dismissed Ace as its general sales agent and notified Win, because Bolt's notice was inadequate to terminate Ace's apparent authority
all of Ace's known customers by letter. Young Corp., a retail
outlet located outside of Ace's previously assigned sales
territory, had never dealt with Ace. Young knew of Ace as a
result of various business contacts. After his dismissal, Ace
sold Young goods, to be delivered by Bolt, and received from
Young a cash deposit for 20% of the purchase price. It was not
unusual for an agent in Ace's previous position to receive cash
deposits. In an action by Young against Bolt on the sales
contract, Young will
Bond fraudulently induced Teal to make a note payable to Monk has the standing of a holder in due course through Wilk.
Wilk, to whom Bond was indebted. Bond delivered the note to
Wilk, Wilk negotiated the instrument to Monk, who purchased
it with knowledge of the fraud and after it was overdue. If Wilk
qualifies as a holder in due course, which of the following
statements is correct?
Bond purchased a painting from Wool, who is not in the Passed to Bond at Wool's tender of delivery
business of selling art. Wool tendered delivery of the painting
after receiving payment in full from Bond. Bond informed
Wool that Bond would be unable to take possession of the
painting until later that day. Thieves stole the painting before
Bond returned. The risk of loss
Burke stole several negotiable warehouse receipts from Grove Grove will prevail, because Burke cannot validly negotiate the warehouse receipts.
Co. The receipts were deliverable to Grove's order. Burke
endorsed Grove's name and sold the warehouse receipts to
Federated Wholesalers, a bona fide purchaser. In an action by
Federated against Grove,
Legal2 2/5/2026
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Burn Manufacturing borrowed $500,000 from Howard Finance Both Burn and Green
Co., secured by Burn's present and future inventory, accounts
receivable, and the proceeds thereof. The parties signed a
financing statement that described the collateral and it was filed
in the appropriate state office. Burn subsequently defaulted in
the repayment of the loan and Howard attempted to enforce its
security interest. Burn contended that Howard's security
interest was unenforceable. In addition, Green, who
subsequently gave credit to Burn without knowledge of
Howard's security interest, is also attempting to defeat
Howard's alleged security interest. The security interest in
question is valid with respect to
Burns borrowed $240,000 from Dollar Bank as additional The surety is liable in full immediately upon default by Burns, but will be entitled to the
working capital for his business. Dollar required that the loan collateral upon satisfaction of the debt.
be collateralized to the extent of 20%, and that an acceptable
surety for the entire amount be obtained. Surety Co. agreed to
act as surety on the loan and Burns pledged $48,000 of
negotiable bearer bonds. Burns defaulted. Which of the
following statements is correct?
The Business Judgment Rule is a rule that immunizes corporate Management from liability for actions that result in corporate losses or damages if the
actions are undertaken in good faith and are within both the power of the corporation and
the authority of management to make
By signing a reaffirmation agreement on April 15, year 4, a Not rescinded before discharge
debtor agreed to pay certain debts that would be discharged in
bankruptcy. On June 20, year 4, the debtor's attorney filed the
reaffirmation agreement and an affidavit with the court
indicating that the debtor understood the consequences of the
reaffirmation agreement. The debtor obtained a discharge on
August 25. The reaffirmation agreement would be enforceable
only if it was
Camp orally guaranteed payment of a loan Camp's cousin Not liable under the oral guaranty because Camp's guaranty must be in writing to be
Wilcox had obtained from Camp's friend Main. The loan was to enforceable
be repaid in 10 monthly payments. After making six payments,
Wilcox defaulted on the loan and Main demanded that Camp
honor the guaranty. Regarding Camp's liability to Main, Camp
is
Cara Fabricating Co. and Taso Corp. agreed orally that Taso $122,000
would custom manufacture a compressor for Cara at a price of
$120,000. After Taso completed the work at a cost of $90,000,
Cara notified Taso that the compressor was no longer needed.
Taso is holding the compressor and has requested payment
from Cara. Taso has been unable to resell the compressor for
any price. Taso incurred storage fees of $2,000. If Cara refuses
to pay Taso and Taso sues Cara, the most Taso will be entitled
to recover is
Cavendish is a limited partner of Custer Venture Capital. He is To have himself elected as a general partner by a majority vote of the limited partners in
extremely dissatisfied with the performance of the general number and amount
partners in making investments and managing the portfolio. He
is contemplating taking whatever legal action may be
appropriate against the general partners. Which of the
following rights would Cavendish not be entitled to assert as a
limited partner?
A check has the following endorsements on the back: Certification of the check
Paul Folk
without recourse
George Hopkins
payment guaranteed
Ann Quarry
collection guaranteed
Rachel Ott
Which of the following conditions occurring subsequent to the
endorsements would discharge all of the endorsers?
Cobb, Inc., a partner in TLC Partnership, assigns its partnership II only
interest to Bean, who is not made a partner. After the
assignment, Bean asserts the rights to
I. Participate in the management of TLC
II. Cobb's share of TLC's partnership profits
Bean is correct as to which of these rights?
Legal2 2/5/2026
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Coffee Corp., a publicly-held corporation, wants to make an I only
$8,000,000 exempt offering of its shares as a private placement
offering under Regulation D, Rule 506, of the Securities Act of
1933. Coffee has more than 500 shareholders and assets in
excess of $1 billion, and has its shares listed on a national
securities exchange.
Which of the following statements is/are correct?
I. Coffee Corp. may make the Regulation D, Rule 506, exempt
offering.
II. Coffee Corp., because it is required to report under the
Securities Exchange Act of 1934, may not make an exempt
offering.
Coffee Corp., a publicly-held corporation, wants to make an II only
$8,000,000 exempt offering of its shares as a private placement
offering under Regulation D, Rule 506, of the Securities Act of
1933. Coffee has more than 500 shareholders and assets in
excess of $1 billion, and has its shares listed on a national
securities exchange.
Which of the following statements is/are correct?
I. Shares sold under a Regulation D, Rule 506, exempt offering
may only be purchased by accredited investors.
II. Shares sold under a Regulation D, Rule 506, exempt
offering may be purchased by any number of investors
provided there are no more than 35 non-accredited investors.
A contested involuntary petition in bankruptcy will be Is an individual engaged in the business of farming
dismissed if the debtor
A corporate stockholder is entitled to which of the following Approve dissolution
rights?
The CPA was preparing the financial statement for a limited Member
liability company. To which of the following would the CPA's
report be addressed?
Curator contracted to sell Train's painting. Train issued a The note was not a negotiable instrument because it was not payable at a definite time.
$10,000 note to Curator that was payable within 10 days after
Curator sold Train's painting. Curator sold the painting on May
1. Train, alleging that the note was not a negotiable instrument,
refused to pay the note. Under the Negotiable Instruments
Article of the UCC, which of the following statements is
correct regarding the status of the note?
Data Inc. intends to make a $750,000 common stock offering May sell the stock to an unlimited number of investors
under Rule 504 of Regulation D of the Securities Act of 1933.
Data
Davis, an inventor, developed a new product, but lacked money Davis is liable until the corporation assumed the debts in novation.
to get the product to the marketplace. Before creating a
corporation to raise capital, Davis leased office space and
equipment, entered into contracts with third parties, and
identified investors. Who has liability for pre-incorporation
debts?
Dean, Inc., a publicly traded corporation, paid a $10,000 bribe Securities Exchange Act of 1934
to a local zoning official. The bribe was recorded in Dean's
financial statements as a consulting fee. Dean's unaudited
financial statements were submitted to the SEC as part of a
quarterly filing. Which of the following federal statutes did
Dean violate?
A debtor may attempt to conceal or transfer property to prevent Yes, Yes, Yes
a creditor from satisfying a judgment. Which of the following
actions will be considered an indication of fraudulent
conveyance?
Downs, Frey, and Vick formed the DFV general partnership to Downs and Vick, as a majority of the partners, would have been able to continue the
act as manufacturers' representatives. The partners agreed partnership if Frey's interest in the partnership is purchased by the partnership.
Downs would receive 40% of any partnership profits and Frey
and Vick would each receive 30% of such profits. It was also
agreed that the partnership would not terminate for five years.
After the fourth year, the partners agreed to terminate the
partnership. At that time, the partners' capital accounts were as
follows:. Downs, $20,000; Frey, $15,000; and Vick, $10,000.
There also were undistributed losses of $30,000. If Frey died
before the partnership terminated,
Legal2 2/5/2026
Terms in this set (508)
A $5,000 promissory note payable to the order of Neptune is A holder in due course to the extent of $3,333
discounted to Bane by blank endorsement for $4,000. King
steals the note from Bane and sells it to Ott who promises to
pay King $4,500. After paying King $3,000, Ott learns that
King stole the note. Ott makes no further payment to King. Ott
is
A $10,000,000 offering of corporate stock intended to be made The offering was made through a general solicitation or advertising.
pursuant to the provisions of Rule 506 of Regulation D of the
Securities Act of 1933 would not be exempt under Rule 506 if
Able, as agent for Baker, an undisclosed principal, contracted Baker individually on the check
with Safe to purchase an antique car. In payment, Able issued
his personal check to Safe. Able could not cover the check but
expected Baker to give him cash to deposit before the check
was presented for payment. Baker did not do so and the check
was dishonored. Baker's identity became known to Safe. Safe
may not recover from
The above instrument is a Draft
Absent a specific provision in its articles of incorporation, a Amend the articles of incorporation
corporation's board of directors has the power to do all of the
following, except
According to the Securities Act of 1933, which of the following If an issuer sells a security and fails to meet certain disclosure requirements, the purchaser
statements is correct regarding an issuer of securities? may sell it back to the issuer and recover the price paid.
Acme Corp. intends to make a public offering in several states Acme may make an oral offer to sell the common stock to a prospective investor after a
of 250,000 shares of its common stock. Under the Securities registration statement has been filed but before it becomes effective.
Act of 1933,
Acorn Corp. wants to acquire the entire business of Trend A cash tender offer, whereby Acorn acquires at least 90% of Trend's shares, followed by a
Corp. Which of the following methods of business combination short-form merger of Trend into Acorn
will best satisfy Acorn's objectives without requiring the
approval of the shareholders of either corporation?
Adler Inc. is a reporting company under the Securities Any person who owns more than 10% of Adler's common stock must file a report with the
Exchange Act of 1934. The only security it has issued is voting SEC.
common stock. Which of the following statements is correct?
After which of the following situations would it usually not be The destruction of the subject matter of the agency
necessary to notify third parties of the termination of an
agency's existence?
An agent will usually be liable under a contract made with a Disclosed principal: No
third party when the agent is acting on behalf of a(an) Undisclosed principal: Yes
All of the following distributions to stockholders are Stock splits
considered asset or capital distributions, except
Alpine Corporation manufactures and sells a high-end line of Will be tested under the rule of reason and is legal if found to be reasonable
featherweight luggage. In order to realize the full profit
potential of its products, Alpine decides to enter into a
franchising arrangement with selected outlets throughout the
country. Its basic arrangement is to grant each outlet the
exclusive right to sell in a designated geographic area and for
each outlet not to sell outside its designated area. This
arrangement
The antifraud provisions of Rule 10b-5 of the Securities Require that the wrongful act must be accomplished through the mail, any other use of
Exchange Act of 1934 interstate commerce, or through a national securities exchange
The apparent authority of a partner to bind the partnership in Will be effectively limited by a formal resolution of the partners of which third parties are
dealing with third parties aware
An appliance seller promised a restaurant owner that a home The express warranty that the goods conform to the seller's promise
dishwasher would fulfill the dishwashing requirements of a
large restaurant. The dishwasher was purchased but it was not
powerful enough for the restaurant. Under the Sales Article of
the UCC, what warranty was violated?
Legal2 2/5/2026
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Ashley needs to endorse a check that had been endorsed by two Qualified
other individuals prior to Ashley's receipt of the check. Ashley
does not want to have surety liability, so Ashley endorses the
check "without recourse." Under the Negotiable Instruments
Article of the UCC, which of the following types of
endorsement did Ashley make?
Assuming each of the following is negotiable, which qualifies A trade acceptance
as a draft under the UCC Negotiable Instruments Article?
Ball borrowed $10,000 from Link. Ball, unable to repay the No, because Link is a holder in due course of the check
debt on its due date, fraudulently induced Park to purchase a
piece of worthless costume jewelry for $10,000. Ball had Park
write a check for that amount naming Link as the payee. Ball
gave the check to Link in satisfaction of the debt Ball owed
Link. Unaware of Ball's fraud, Link cashed the check. When
Park discovered Ball's fraud, Park demanded that Link repay
the $10,000. Under the Negotiable Instruments Article of the
UCC, will Link be required to repay Park?
A bank issues a negotiable instrument that acknowledges Certificate of deposit
receipt of $50,000. The instrument also provides that the bank
will repay the $50,000 plus 8% interest per annum to the bearer
90 days from the date of the instrument. The instrument is a
Bell Co. owned 20 engines which it deposited in a public June 13-Bell negotiated the warehouse receipt to Spark.
warehouse on May 5, receiving anegotiable warehouse receipt
in its name. Bell sold the engines to Spark Corp. On which of
the following dates did the risk of loss transfer from Bell to
Spark?
Bixler obtained an option on a building he believed was Even if, as Bixler claimed, the building was fairly worth more than $200,000, Bixler
suitable for use by a corporation he and two other individuals nevertheless must return the $45,000 to the corporation.
were organizing. After the corporation was successfully
promoted, Bixler met with the Board of Directors who agreed
to acquire the property for $200,000. Bixler deeded the
building to the corporation and the corporation began business
in it. Bixler's option contract called for the payment of only
$155,000 for the building and he purchased it for that price.
When the directors later learned that Bixler paid only $155,000,
they demanded the return of Bixler's $45,000 profit. Bixler
refused, claiming the building was worth far more than
$200,000 both when he secured the option and when he deeded
it to the corporation. Which of the following statements
correctly applies to Bixler's conduct?
Blare bought a house and provided the required funds in the The bank has accepted, but Blare has secondary liability.
form of a certified check from a bank. Which of the following
statements correctly describes the legal liability of Blare and
the bank?
Blue, a used car dealer, appointed Gage as an agent to sell Both Blue and Gage
Blue's cars. Gage was authorized by Blue to appoint subagents
to assist in the sale of the cars. Vond was appointed as a sub-
agent. To whom does Vond owe a fiduciary duty?
Bolt Corp. dismissed Ace as its general sales agent and notified Win, because Bolt's notice was inadequate to terminate Ace's apparent authority
all of Ace's known customers by letter. Young Corp., a retail
outlet located outside of Ace's previously assigned sales
territory, had never dealt with Ace. Young knew of Ace as a
result of various business contacts. After his dismissal, Ace
sold Young goods, to be delivered by Bolt, and received from
Young a cash deposit for 20% of the purchase price. It was not
unusual for an agent in Ace's previous position to receive cash
deposits. In an action by Young against Bolt on the sales
contract, Young will
Bond fraudulently induced Teal to make a note payable to Monk has the standing of a holder in due course through Wilk.
Wilk, to whom Bond was indebted. Bond delivered the note to
Wilk, Wilk negotiated the instrument to Monk, who purchased
it with knowledge of the fraud and after it was overdue. If Wilk
qualifies as a holder in due course, which of the following
statements is correct?
Bond purchased a painting from Wool, who is not in the Passed to Bond at Wool's tender of delivery
business of selling art. Wool tendered delivery of the painting
after receiving payment in full from Bond. Bond informed
Wool that Bond would be unable to take possession of the
painting until later that day. Thieves stole the painting before
Bond returned. The risk of loss
Burke stole several negotiable warehouse receipts from Grove Grove will prevail, because Burke cannot validly negotiate the warehouse receipts.
Co. The receipts were deliverable to Grove's order. Burke
endorsed Grove's name and sold the warehouse receipts to
Federated Wholesalers, a bona fide purchaser. In an action by
Federated against Grove,
Legal2 2/5/2026
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Burn Manufacturing borrowed $500,000 from Howard Finance Both Burn and Green
Co., secured by Burn's present and future inventory, accounts
receivable, and the proceeds thereof. The parties signed a
financing statement that described the collateral and it was filed
in the appropriate state office. Burn subsequently defaulted in
the repayment of the loan and Howard attempted to enforce its
security interest. Burn contended that Howard's security
interest was unenforceable. In addition, Green, who
subsequently gave credit to Burn without knowledge of
Howard's security interest, is also attempting to defeat
Howard's alleged security interest. The security interest in
question is valid with respect to
Burns borrowed $240,000 from Dollar Bank as additional The surety is liable in full immediately upon default by Burns, but will be entitled to the
working capital for his business. Dollar required that the loan collateral upon satisfaction of the debt.
be collateralized to the extent of 20%, and that an acceptable
surety for the entire amount be obtained. Surety Co. agreed to
act as surety on the loan and Burns pledged $48,000 of
negotiable bearer bonds. Burns defaulted. Which of the
following statements is correct?
The Business Judgment Rule is a rule that immunizes corporate Management from liability for actions that result in corporate losses or damages if the
actions are undertaken in good faith and are within both the power of the corporation and
the authority of management to make
By signing a reaffirmation agreement on April 15, year 4, a Not rescinded before discharge
debtor agreed to pay certain debts that would be discharged in
bankruptcy. On June 20, year 4, the debtor's attorney filed the
reaffirmation agreement and an affidavit with the court
indicating that the debtor understood the consequences of the
reaffirmation agreement. The debtor obtained a discharge on
August 25. The reaffirmation agreement would be enforceable
only if it was
Camp orally guaranteed payment of a loan Camp's cousin Not liable under the oral guaranty because Camp's guaranty must be in writing to be
Wilcox had obtained from Camp's friend Main. The loan was to enforceable
be repaid in 10 monthly payments. After making six payments,
Wilcox defaulted on the loan and Main demanded that Camp
honor the guaranty. Regarding Camp's liability to Main, Camp
is
Cara Fabricating Co. and Taso Corp. agreed orally that Taso $122,000
would custom manufacture a compressor for Cara at a price of
$120,000. After Taso completed the work at a cost of $90,000,
Cara notified Taso that the compressor was no longer needed.
Taso is holding the compressor and has requested payment
from Cara. Taso has been unable to resell the compressor for
any price. Taso incurred storage fees of $2,000. If Cara refuses
to pay Taso and Taso sues Cara, the most Taso will be entitled
to recover is
Cavendish is a limited partner of Custer Venture Capital. He is To have himself elected as a general partner by a majority vote of the limited partners in
extremely dissatisfied with the performance of the general number and amount
partners in making investments and managing the portfolio. He
is contemplating taking whatever legal action may be
appropriate against the general partners. Which of the
following rights would Cavendish not be entitled to assert as a
limited partner?
A check has the following endorsements on the back: Certification of the check
Paul Folk
without recourse
George Hopkins
payment guaranteed
Ann Quarry
collection guaranteed
Rachel Ott
Which of the following conditions occurring subsequent to the
endorsements would discharge all of the endorsers?
Cobb, Inc., a partner in TLC Partnership, assigns its partnership II only
interest to Bean, who is not made a partner. After the
assignment, Bean asserts the rights to
I. Participate in the management of TLC
II. Cobb's share of TLC's partnership profits
Bean is correct as to which of these rights?
Legal2 2/5/2026
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Coffee Corp., a publicly-held corporation, wants to make an I only
$8,000,000 exempt offering of its shares as a private placement
offering under Regulation D, Rule 506, of the Securities Act of
1933. Coffee has more than 500 shareholders and assets in
excess of $1 billion, and has its shares listed on a national
securities exchange.
Which of the following statements is/are correct?
I. Coffee Corp. may make the Regulation D, Rule 506, exempt
offering.
II. Coffee Corp., because it is required to report under the
Securities Exchange Act of 1934, may not make an exempt
offering.
Coffee Corp., a publicly-held corporation, wants to make an II only
$8,000,000 exempt offering of its shares as a private placement
offering under Regulation D, Rule 506, of the Securities Act of
1933. Coffee has more than 500 shareholders and assets in
excess of $1 billion, and has its shares listed on a national
securities exchange.
Which of the following statements is/are correct?
I. Shares sold under a Regulation D, Rule 506, exempt offering
may only be purchased by accredited investors.
II. Shares sold under a Regulation D, Rule 506, exempt
offering may be purchased by any number of investors
provided there are no more than 35 non-accredited investors.
A contested involuntary petition in bankruptcy will be Is an individual engaged in the business of farming
dismissed if the debtor
A corporate stockholder is entitled to which of the following Approve dissolution
rights?
The CPA was preparing the financial statement for a limited Member
liability company. To which of the following would the CPA's
report be addressed?
Curator contracted to sell Train's painting. Train issued a The note was not a negotiable instrument because it was not payable at a definite time.
$10,000 note to Curator that was payable within 10 days after
Curator sold Train's painting. Curator sold the painting on May
1. Train, alleging that the note was not a negotiable instrument,
refused to pay the note. Under the Negotiable Instruments
Article of the UCC, which of the following statements is
correct regarding the status of the note?
Data Inc. intends to make a $750,000 common stock offering May sell the stock to an unlimited number of investors
under Rule 504 of Regulation D of the Securities Act of 1933.
Data
Davis, an inventor, developed a new product, but lacked money Davis is liable until the corporation assumed the debts in novation.
to get the product to the marketplace. Before creating a
corporation to raise capital, Davis leased office space and
equipment, entered into contracts with third parties, and
identified investors. Who has liability for pre-incorporation
debts?
Dean, Inc., a publicly traded corporation, paid a $10,000 bribe Securities Exchange Act of 1934
to a local zoning official. The bribe was recorded in Dean's
financial statements as a consulting fee. Dean's unaudited
financial statements were submitted to the SEC as part of a
quarterly filing. Which of the following federal statutes did
Dean violate?
A debtor may attempt to conceal or transfer property to prevent Yes, Yes, Yes
a creditor from satisfying a judgment. Which of the following
actions will be considered an indication of fraudulent
conveyance?
Downs, Frey, and Vick formed the DFV general partnership to Downs and Vick, as a majority of the partners, would have been able to continue the
act as manufacturers' representatives. The partners agreed partnership if Frey's interest in the partnership is purchased by the partnership.
Downs would receive 40% of any partnership profits and Frey
and Vick would each receive 30% of such profits. It was also
agreed that the partnership would not terminate for five years.
After the fourth year, the partners agreed to terminate the
partnership. At that time, the partners' capital accounts were as
follows:. Downs, $20,000; Frey, $15,000; and Vick, $10,000.
There also were undistributed losses of $30,000. If Frey died
before the partnership terminated,
Legal2 2/5/2026
