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Business Ethics 2016 - QUIZ & ANSWERS (15) - Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

Business Ethics 2016

BUSINESS ETHICS 2016

Case study guides and test bank and answer keys (2016)

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

 

 

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

Chapter 15   Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

 

1) An LLC is a(n) ________.

  1. A) unincorporated business entity
  2. B) incorporated business entity
  3. C) cooperative entity
  4. D) proprietorship

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

2) Which of the following is true of an LLC?

  1. A) An LLC is a creature of federal law.
  2. B) An LLC is regarded as a separate legal entity.
  3. C) An LLC cannot hold title to property.
  4. D) The owners of an LLC are called general partners or specific partners.

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

3) The ________ is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.

  1. A) Williams Act
  2. B) Securities Exchange Act
  3. C) ULLCA
  4. D) ULPA

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

 

4) The owner of an LLC is called a ________.

  1. A) general partner
  2. B) limited partner
  3. C) proprietor
  4. D) member

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

5) Which of the following is true of the ULLCA?

  1. A) It provides comprehensive laws for the formation of corporations.
  2. B) It provides uniform laws for the dissolution of LLCs.
  3. C) It is a state law that is uniform across the United States.
  4. D) It governs the operation of proprietorships and LLPs.

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

6) Which of the following is true of LLC taxation?

  1. A) An LLC is taxed as a corporation in all general cases.
  2. B) Income or losses of an LLC do not flow through to the members' individual income tax returns.
  3. C) Members of an LLC are subject to double taxation.
  4. D) An LLC is not taxed at the entity level.

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

7) Which of the following is true of an LLC formation?

  1. A) Doctors and lawyers can operate practices as LLCs.
  2. B) An LLC has to be organized in every state that it operates.
  3. C) LC cannot be used to denote an LLC.
  4. D) An LLC is a creation of federal law.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

8) In states where an LLC may be organized by only one member, ________ can obtain the benefit of the limited liability shield of an LLC.

  1. A) corporations
  2. B) sole proprietors
  3. C) LLPs
  4. D) general partnerships

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

9) ________ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLC to form the LLC.

  1. A) Operating agreements
  2. B) Certificates of interest
  3. C) Articles of organization
  4. D) Articles of amendment

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

10) An LLC is a ________ in the state in which it is organized.

  1. A) sole proprietorship
  2. B) domestic LLC
  3. C) term LLC
  4. D) general partnership

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

11) An LLC that was organized in Alabama and is operating in Texas with no operations outside the United States is considered a ________ in Texas.

  1. A) foreign limited liability company
  2. B) limited liability partnership
  3. C) domestic limited liability company
  4. D) general partnership

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

12) Sam Muller and Toby Richardson form an LLC in the state of Delaware. In the articles of organization, they specify the duration of the LLC as 25 years from the date of filing the articles of organization. Which of the following is true in this context?

  1. A) The LLC is invalid as it does not specify a date of termination.
  2. B) The LLC may be dissolved at will any time after 25 years from the date of filing the articles of organization.
  3. C) Muller and Richardson have formed a term LLC.
  4. D) Muller and Richardson have formed an at-will LLC.

Answer:  C

Diff: 1

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

 

13) A(n) ________ refers to a document that evidences a member's ownership interest in an LLC.

  1. A) certificate of interest
  2. B) distributional interest
  3. C) operating agreement
  4. D) agreement of conversion

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

14) The certificate of interest acts the same as a(n) ________ issued by a corporation.

  1. A) promissory note
  2. B) stock certificate
  3. C) deposit note
  4. D) initial public offer

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

15) A(n) ________ refers to an agreement among members that governs the affairs and business of the LLC and the relations among members, managers, and the LLC.

  1. A) certificate of interest
  2. B) franchise agreement
  3. C) operating agreement
  4. D) agreement of conversion

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

16) Peter, Preston, and Penny organize an LLC in January. While composing the operating agreement, they forget to include an amendment clause. Six months later, the situation demands an amendment to the operating agreement. Which of the following would best apply in this scenario?

  1. A) The operating agreement can be amended if all three members approve.
  2. B) The operating agreement cannot be amended as it contains no amendment provision.
  3. C) The operating agreement can be amended with the affirmative majority of all shareholders.
  4. D) The operating agreement can be amended only 60 days after a new amendment provision is included.

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

 

17) In which of the following cases does the conversion of an existing business to an LLC take effect?

  1. A) when the articles of organization are filed with the secretary of state
  2. B) when the members enter into an agreement of conversion
  3. C) when an operating agreement is finalized by members
  4. D) when the first certificate of interest is issued

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

18) Philip and Deborah form an LLC. Philip contributes $50,000 capital and Deborah contributes $75,000 capital. They do not have an agreement as to how profits are to be shared. If the LLC makes $100,000 profit in its first year, how will the profit be divided among the members?

  1. A) Philip gets $30,000 and Deborah gets $70,000.
  2. B) Philip gets $50,000 and Deborah gets $50,000.
  3. C) Philip gets $25,000 and Deborah gets $75,000.
  4. D) Philip gets $35,000 and Deborah gets $65,000.

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

 

 

19) Jasmin, Shou-Yi, and Vanessa form an LLC, and each contributes $25,000 in capital. The LLC operates for a period of time, during which it borrows money from banks and purchases goods on credit from suppliers. After some time, the LLC experiences financial difficulties and goes out of business. If the LLC fails with $500,000 in debts, which of the following is an accurate statement regarding the liability of Jasmin, Shou-Yi, and Vanessa?

  1. A) Each will lose her capital contribution of $25,000, but will not be personally liable for the rest of the unpaid debts of the LLC.
  2. B) Each will lose her capital contribution of $25,000, and will be personally liable for the rest of the unpaid debts of the LLC.
  3. C) Each will not be personally liable for the $500,000 in debts, and will be reimbursed for her $25,000 capital contribution.
  4. D) Each will not be personally liable for the $500,000 in debts, and a constructive trust for the entire $75,000 in capital contributions will be imposed so that Jasmin, Shou-Yi and Vanessa can form a new business venture.

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

20) Which of the following best defines the term distributional interest?

  1. A) the ratio in which profit is distributed among members of an LLC
  2. B) the process of distributing profits or losses according to the capital investment of the member
  3. C) the constitution of management of the LLC based on the extent of each member's financial investment
  4. D) a member's ownership interest in an LLC that entitles the member to receive distributions of money and property from the LLC

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

21) A member's ownership interest in an LLC is called a ________.

  1. A) certificate of interest
  2. B) distributional interest
  3. C) collateral interest
  4. D) creditor's interest

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

22) A member's distributional interest in an LLC is ________ and may be transferred in whole or in part.

  1. A) a vote
  2. B) a proxy
  3. C) personal property
  4. D) an authority in management

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

23) John, Nathan, and Julio form JNJ, LLC, with equal capital investment each. On his way to a business meeting with clients of JNJ, Nathan accidentally injures Jessica in a car accident. Which of the following is true in this scenario?

  1. A) Jessica can claim damages from JNJ, LLC, as she was injured in the ordinary course of business.
  2. B) Jessica can only claim damages from Nathan and not from JNJ, LLC.
  3. C) Jessica can choose to claim damages from any one of the three partners.
  4. D) John, Nathan, and Julio have equal personal liability for Jessica's injuries.

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

 

24) Members of an LLC have ________ liability.

  1. A) limited
  2. B) unlimited personal
  3. C) unlimited capital
  4. D) strict

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

25) Which of the following is true of liabilities of LLCs?

  1. A) Members of the LLC are liable to the extent of their capital contribution.
  2. B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC.
  3. C) LLCs are not liable for any loss or injury caused by their employees.
  4. D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary course of business.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

26) A ________ is a person who intentionally or unintentionally causes injury or death to another person.

  1. A) protagonist
  2. B) supplanter
  3. C) reversionist
  4. D) tortfeasor

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

27) Which of the following is true of the management of an LLC?

  1. A) Members cannot become managers of an LLC.
  2. B) A manager-managed LLC shares management powers between members and managers.
  3. C) A nonmember can become a manager of an LLC.
  4. D) An LLC can be both member-managed and manager-managed simultaneously.

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

28) Which of the following is true of a member-managed LLC?

  1. A) Each member has equal rights in the management of the business of the LLC.
  2. B) The member with the highest capital contribution becomes the de facto manager of the LLC.
  3. C) Any matter relating to the business of the LLC is decided by a unanimous vote of the members.
  4. D) Shareholders are not allowed to decide matters relating to the business of the LLC.

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

29) Mary, Harold, Harvey, and William form an LLC by contributing $20,000, $50,000, $55,000, and $150,000, respectively. The LLC is designated to be member-managed. When a decision is put to vote, Mary, Harvey, and Harold vote "yes," whereas William votes "no." Which of the following is true in this context?

  1. A) William's decision prevails as he has invested the maximum capital.
  2. B) No conclusion can be derived as the vote is not unanimous.
  3. C) Mary, Harvey, and Harold's decision prevails due to simple majority.
  4. D) The decision is put to vote among employees of the company.

Answer:  C

Diff: 2

Skill:  Factual Application

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Application of knowledge

Classification:  Application

 

30) Which of the following methods is used to appoint a manager of a manager-managed LLC?

  1. A) appointment by the secretary of state
  2. B) majority vote of the members
  3. C) unanimous vote of members
  4. D) unanimous vote of shareholders

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

31) Which of the following actions requires all members in a manager-managed LLC to vote?

  1. A) issuing a certificate of interest
  2. B) admitting new members
  3. C) converting an existing business into an LLC
  4. D) expanding operations in another country

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

32) The ________ is a duty owed by a member of an LLC to not act adversely to the interests of the LLC.

  1. A) duty of discharge
  2. B) duty of restitution
  3. C) duty of loyalty
  4. D) duty of resolution

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

33) A limited liability company is an incorporated business entity.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

34) Limited liability companies are created by federal law.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

35) LLCs are treated as artificial persons who can sue or be sued and enter into and enforce contracts.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

36) A member or a shareholder is the owner of an LLC.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

37) The Uniform Limited Liability Company Act is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

38) The ULLCA is a federal law and is valid across the United States.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

39) An LLC is taxed at the entity level.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

40) The income or losses of an LLC flow through to the members' individual income tax returns; this avoids double-taxation.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

41) An LLC can be organized in only one state.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

42) A limited liability company cannot be abbreviated as LC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

43) The existence of an LLC begins when the articles of organization are filed.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

44) An LLC cannot amend its articles of organization.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

45) An LLC organized in the United States is considered a domestic LLC throughout the United States.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

46) Articles of organization are documents that evidence a member's ownership interest in an LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

47) An operating agreement is a document that states the terms for converting an existing business to an LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

48) An operating agreement can be amended orally.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

49) Profits and losses from an LLC do not have to be distributed in the same proportion.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

50) A distributional interest refers to a member's ownership interest in an LLC.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

51) Agents of an LLC are not permitted to enter into contracts on behalf of the LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

52) An LLC is not liable for any injury caused by an LLC member while acting within the ordinary course of business of the LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

53) Members of LLCs are not personally liable for the LLC's debts, obligations, and liabilities.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

54) Managers of LLCs are not personally liable for the debts, obligations, and liabilities of the LLC they manage.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

55) If a member or manager of an LLC is found to be a tortfeasor, he or she is not personally liable for the injury or death of another person.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

56) The United States does not permit an LLC to be member-managed.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

57) In a manager-managed LLC, it is necessary that the manager is a member of that LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

58) In a manager-managed LLC, amending the articles of organization cannot be delegated to the managers.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

59) A manager does not owe a duty of loyalty to the LLC as he or she is not a member of the LLC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

60) The duty of care for managers and members includes the duty not to usurp the LLC's opportunities.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

61) A member of a manager-managed LLC who is not a manager owes no fiduciary duty of loyalty or care to the LLC or its other members.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

62) A limited liability partnership has no general partner.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

63) A(n) ________ is an unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships, and corporations.

Answer:  limited liability company

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

64) The creation of an LLC is pursuant to laws stated by the ________ government.

Answer:  state

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

65) The ________ codifies LLC laws and tries to establish comprehensive LLC law that is uniform throughout the United States.

Answer:  Uniform Limited Liability Company Act (ULLCA)

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

66) An LLC is formed by delivering ________ to the office of the secretary of state of the state of organization for filing.

Answer:  articles of organization

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

67) A member's ownership interest in an LLC is known as a(n) ________.

Answer:  distributional interest

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

68) A person who intentionally or unintentionally (negligently) causes injury or death to another person is called a(n) ________.

Answer:  tortfeasor

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

69) In a(n) ________ LLC, each member has equal rights in the management of the business of the LLC, regardless of the size of his or her capital contribution.

Answer:  member-managed

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

70) In a(n) ________ LLC, the managers have authority to bind the LLC to contracts, but nonmanager members cannot bind the LLC to contracts.

Answer:  manager-managed

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

71) A nonmanager member of a(n) ________ LLC is treated equally to a shareholder in a corporation.

Answer:  manager-managed

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

72) A company operating its business as a(n) ________ cannot have more than 100 shareholders.

Answer:  S corporation

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

73) Explain the process that exempts members of an LLC from double taxation.

Answer:  Under the Internal Revenue Code and regulations adopted by the Internal Revenue Service (IRS) for federal income tax purposes, an LLC is taxed as a partnership unless it elects to be taxed as a corporation. Thus, an LLC is not taxed at the entity level, but its income or losses flow through to the members' individual income tax returns. This avoids double taxation.

Diff: 1

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

74) What is a distributional interest? Explain the terms of its transfer.

Answer:  A member's ownership interest in an LLC is called a distributional interest. A member's distributional interest in an LLC is personal property and may be transferred in whole or in part. Unless otherwise provided in the operating agreement, a transfer of an interest in an LLC does not entitle the transferee to become a member of the LLC or to exercise any right of a member. A transfer entitles the transferee to receive only distributions from the LLC to which the transferor would have been entitled. A transferee of a distributional interest becomes a member of the LLC if it is so provided in the operating agreement or if all the other members of the LLC consent.

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

75) Distinguish between a member-managed and a manager-managed LLC. Mention the exceptional actions that cannot be delegated to managers.

Answer:  In a member-managed LLC, each member has equal rights in the management of the business of the LLC, regardless of the size of his or her capital contribution. Any matter relating to the business of the LLC is decided by a majority vote of the members. In a manager-managed LLC, the members and nonmembers who are designated managers control the management of the LLC. The members who are not managers have no rights to manage the LLC unless otherwise provided in the operating agreement. In a manager-managed LLC, each manager has equal rights in the management and conduct of the company's business. Any matter related to the business of the LLC may be exclusively decided by the managers by a majority vote of the managers. Certain actions cannot be delegated to managers but must be voted on by all members of the LLC. These include (a) amending the articles of organization, (b) amending the operating agreement, (c) admitting new members, (d) consenting to dissolve the LLC, (e) consenting to merge the LLC with another entity, and (f) selling, leasing, or disposing of all or substantially all of the LLC's property.

Diff: 2

Skill:  Legal Concepts

LO:  15.1 Define Limited Liability Company (LLC) and describe the benefits of an LLC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

76) A(n) ________ is a special form of partnership in which all partners are limited partners, and there are no general partners.

  1. A) domestic LLC
  2. B) proprietorship
  3. C) LLC
  4. D) LLP

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  15.2 Define Limited Liability Partnership (LLP) and describe the benefits of an LLP.

AACSB:  Analytical thinking

Classification:  Concept

 

77) ________ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLP to form the LLP.

  1. A) Articles of LLP
  2. B) Agreements of conversion
  3. C) Articles of organization of LLP
  4. D) Articles of amendment of LLC

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.2 Define Limited Liability Partnership (LLP) and describe the benefits of an LLP.

AACSB:  Analytical thinking

Classification:  Concept

78) Partners of LLPs are personally liable for the LLPs' debts, obligations, and liabilities.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.2 Define Limited Liability Partnership (LLP) and describe the benefits of an LLP.

AACSB:  Analytical thinking

Classification:  Concept

 

79) An LLP has a(n) ________ tax benefit, where no tax is paid at the partnership level, and all profits and losses are reported on the individual partners' income tax returns.

Answer:  flow-through

Diff: 1

Skill:  Legal Concepts

LO:  15.2 Define Limited Liability Partnership (LLP) and describe the benefits of an LLP.

AACSB:  Analytical thinking

Classification:  Concept

 

 

80) A(n) ________ is established when one party licenses another party to use the first party's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services.

  1. A) proprietorship
  2. B) franchise
  3. C) implicit contract
  4. D) general partnership

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

81) Which of the following is true of a franchise?

  1. A) The franchisor and franchisee are established as separate legal entities.
  2. B) A franchisee does not need a license to use the franchisor's trademark.
  3. C) The franchisee does not have access to the franchisor's knowledge.
  4. D) A franchise is considered a joint venture.

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

82) In a(n) ________ franchise, the franchisor manufactures a product and licenses a retail dealer to sell the product to the public.

  1. A) processing plant
  2. B) area
  3. C) distributorship
  4. D) chain-style

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

83) In which of the following types of franchises does a franchisor provide a secret formula or process to the franchisee?

  1. A) chain-style franchise
  2. B) area franchise
  3. C) distributorship franchise
  4. D) processing plant franchise

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

84) Limonelle Corporation owns the secret formula for a popular beverage brand, Limonelle. The corporation operates through franchises in over 50 countries. It uses a secret formula to prepare the drink concentrate that is dispatched to the franchises world over. These franchises then prepare and bottle the beverage for distribution. Which type of franchise has Limonelle adopted?

  1. A) chain-style franchise
  2. B) processing plant franchise
  3. C) distributorship franchise
  4. D) area franchise

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Application of knowledge

Classification:  Application

85) In a(n) ________ franchise, the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory.

  1. A) chain-style
  2. B) area
  3. C) distributorship
  4. D) processing plant

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

86) Rio-Werner Corporation owns Rio's Sandwiches, a fast-food restaurant in New Jersey. It wants to operate in five cities on the west coast by means of franchisees that make and sell all menu items from Rio's Sandwiches. Which of the following franchises would best suit the Rio-Werner Corporation's franchise plan?

  1. A) processing plant
  2. B) area
  3. C) distributorship
  4. D) chain-style

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Application of knowledge

Classification:  Application

 

87) In a(n) ________ franchise, the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor.

  1. A) chain-style
  2. B) area
  3. C) distributorship
  4. D) processing plant

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

88) The area franchisee is also called a ________.

  1. A) joint venturer
  2. B) limited partner
  3. C) subfranchisor
  4. D) strategic partner

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

89) Which of the following is an instance of an area franchise?

  1. A) McDonald's franchises an independently owned restaurant to make and sell its products in Pennsylvania.
  2. B) Pepsi Co. ships Pepsi in the form of a drink concentrate that is prepared and bottled locally in Canada.
  3. C) Nokia licenses a retail dealer to retail its products in Jacksonville.
  4. D) Burger King wants to start operating in Mexico and hires a Mexican subfranchisor to sell the franchise on behalf of Burger King.

Answer:  D

Diff: 3

Skill:  Factual Application

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Application of knowledge

Classification:  Application

 

90) Which of the following documents sets forth the terms and conditions of a franchise?

  1. A) the FTC disclosure document
  2. B) the franchise agreement
  3. C) the articles of incorporation
  4. D) the articles of organization

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

91) Which of the following is true of the liabilities of a franchisor and a franchisee?

  1. A) The franchisor is not liable for any tort arising out of the franchise.
  2. B) Both franchisee and franchisor are jointly liable for torts committed by either.
  3. C) Franchisees are only liable on their own contracts.
  4. D) Franchisors are always liable for the torts of the franchisees.

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

92) Ubiquitous Enterprises is a franchisee of the HotPan chain of restaurants. One afternoon Linda, an employee of Ubiquitous Enterprises, is mopping the floor. Gary, a customer who enters the restaurant, is talking on his cell phone and does not notice Linda mopping the floor. He slips on the wet floor while walking to the counter and is injured. Which of the following statements is accurate regarding liability for Gary's injury?

  1. A) HotPan is liable for not providing a "Caution: Wet Floor!" sign.
  2. B) Ubiquitous Enterprises is liable for not having its own "Caution" sign.
  3. C) Both HotPan and Ubiquitous Enterprises are jointly and severally liable.
  4. D) Neither HotPan nor Ubiquitous Enterprises is liable.

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Application of knowledge

Classification:  Application

 

93) A franchisee is established when parties of a general partnership conduct business outside the state of their incorporation.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

94) In a processing plant franchise, the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

95) In an area franchise, the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

96) A distributorship franchisee is called a subfranchisor.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

97) If a franchise is properly organized and operated, the franchisor and franchisee are separate legal entities.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

98) A franchisor deals with the franchisee as an independent contractor.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

99) Unless otherwise stated, the franchisor is liable for the torts of its franchisee.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

100) Ford Motor Company manufactures automobiles and franchises independently owned automobile dealers (franchisees) to sell them to the public. This is an example of a(n) ________ franchise.

Answer:  distributorship

Diff: 1

Skill:  Factual Application

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Application of knowledge

Classification:  Application

 

 

101) In a(n) ________ franchise, the franchisor provides a secret formula or the like to the franchisee. The franchisee then manufactures the product at its own location and distributes it to retail dealers.

Answer:  processing plant

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

102) A type of franchising where the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory is known as a(n)________ franchise.

Answer:  chain-style

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

103) In an area franchise, the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. The area franchisee is called a(n) ________.

Answer:  subfranchisor

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

104) A franchisee acquires a(n) ________ from a franchisor that allows the franchisee to use the franchisor's trademarks, service marks, trade names, and other intellectual property in the distribution of goods, services, software, and digital information.

Answer:  license

Diff: 1

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

105) Explain the four basic types of franchises.

Answer: 

  1. a) Distributorship franchise. In a distributorship franchise, the franchisor manufactures a product and licenses a retail dealer to distribute a product to the public.
  2. b) Processing plant franchise. In a processing plant franchise, the franchisor provides a secret formula or the like to the franchisee. The franchisee then manufactures the product at its own location and distributes it to retail dealers.
  3. c) Chain-style franchise. In a chain-style franchise, the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory. The product is made or the service is provided by the franchise. Most fast-food franchises use this form.
  4. d) Area franchise. In an area franchise, the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. The area franchisee is called a subfranchisor. An area franchise is granted for a certain designated geographical area, such as a state, a region, or another agreed-upon area.

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

106) What are the steps a prospective franchisee must take in order to acquire a franchise? What properties are generally licensed by franchisors?

Answer:  A prospective franchisee must apply to the franchisor for a franchise. The franchise application often includes detailed information about the applicant's previous employment, financial and educational history, credit status, and so on. If an applicant is approved, the parties enter into a franchise agreement that sets forth the terms and conditions of the franchise. Franchise agreements do not usually have much room for negotiation. A franchisor's ability to maintain the public's perception of the quality of the goods and services associated with its trade name, trademarks, and service marks is the essence of its success. Most franchisors license the use of their trade names, trademarks, and service marks to their franchisees. Franchisors are often owners of trade secrets, including product formulas, business plans and models, and other ideas. Franchisors license and disclose many of their trade secrets to franchisees.

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

 

107) Explain the extent of liability of a franchisor and a franchisee with an example.

Answer:  If a franchise is properly organized and operated, the franchisor and franchisee are separate legal entities. Therefore, the franchisor deals with the franchisee as an independent contractor. Franchisees are liable on their own contracts and are liable for their own torts (e.g., negligence). Franchisors are liable for their own contracts and torts. Generally, neither party is liable for the contracts or torts of the other.

Example–Suppose that McDonald's Corporation, a fast-food restaurant franchisor, grants a restaurant franchise to Tina Corporation. Tina Corporation opens the franchise restaurant. One day, a customer at the franchise spills a chocolate shake on the floor. The employees at the franchise fail to clean up the spilled shake, and one hour later, another customer slips on the spilled shake and suffers severe injuries. The injured customer can recover damages from the franchisee, Tina Corporation, because it was negligent. It cannot recover damages from the franchisor, McDonald's Corporation.

Diff: 2

Skill:  Legal Concepts

LO:  15.3 Define franchise and describe the various forms of franchises.

AACSB:  Analytical thinking

Classification:  Concept

 

108) ________ is a business arrangement that occurs when the owner of intellectual property contracts to permit another party to use the intellectual property.

  1. A) A general partnership
  2. B) Leasing
  3. C) Licensing
  4. D) A joint venture

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Analytical thinking

Classification:  Concept

109) The party who grants a license is known as the ________.

  1. A) licensee
  2. B) licensor
  3. C) grantee
  4. D) grantor

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Analytical thinking

Classification:  Concept

 

 

110) The party to whom a license is granted is known as the ________.

  1. A) licensee
  2. B) licensor
  3. C) grantee
  4. D) grantor

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Analytical thinking

Classification:  Concept

 

111) YouKnow Inc. is a corporation that creates educational resources. It grants Middlewest Public School the right to use its online encyclopedias for three years in return for a fee. In this arrangement, YouKnow Inc. is the ________.

  1. A) donor
  2. B) trustee
  3. C) grantor
  4. D) licensor

Answer:  D

Diff: 2

Skill:  Factual Application

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Application of knowledge

Classification:  Application

 

112) Intrepid Creations is a product design institute that provides educational courses in package design. It manages to acquire the right to use simulation software from Marco Software for a payment of $2,000 a year. There is no clause of expiration on this arrangement and the right to access the software is renewed annually. Which of the following business arrangements does the aforementioned scenario indicate?

  1. A) a licensing arrangement
  2. B) a general partnership
  3. C) a limited partnership
  4. D) a franchise

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Application of knowledge

Classification:  Application

 

 

113) Licensing refers to a business arrangement that occurs when the owner of intellectual property contracts to permit another party to use the intellectual property.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Analytical thinking

Classification:  Concept

 

114) A franchise is an example of a license.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.4 Define licensing and describe how intellectual property and software are licensed.

AACSB:  Analytical thinking

Classification:  Concept

 

115) A ________ is an arrangement in which two or more business entities combine their resources to pursue a single project or transaction.

  1. A) joint venture
  2. B) general partnership
  3. C) sole proprietorship
  4. D) franchise

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  15.5 Describe special forms of business, such as joint ventures and strategic alliances.

AACSB:  Analytical thinking

Classification:  Concept

 

116) Joint venturers do not have equal rights to manage a joint venture.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  15.5 Describe special forms of business, such as joint ventures and strategic alliances.

AACSB:  Analytical thinking

Classification:  Concept

 

117) If a joint venture is operated as a partnership, then each joint venturer is considered a partner of the joint venture.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  15.5 Describe special forms of business, such as joint ventures and strategic alliances.

AACSB:  Analytical thinking

Classification:  Concept

118) In pursuing a joint venture, many joint venturers form a corporation to operate the joint venture. This is called a(n) ________.

Answer:  joint venture corporation

Diff: 1

Skill:  Legal Concepts

LO:  15.5 Describe special forms of business, such as joint ventures and strategic alliances.

AACSB:  Analytical thinking

Classification:  Concept

------

Free Business Ethics Resources

1. See full list of videos: 

Link 1 - Youtube channel www.youtube.com/ecomftu2012

Link 2 - Youtube channel 

2. Free Business Ethics - 2016 Ebooks (free download)

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

 

3. Link to power point slides (Free Download)

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

LINK DOWNLOAD FREE PPT - LINK

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

LINK DOWNLOAD FREE PPT - LINK

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

4. Test Bank - Free download

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

Link - Test bank - free download 

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Link - Test bank - free download

 

For Test Bankz, Quiz Answers and Case study Guides, email to: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Good Luck and Success, Enjoy Your Study !

 

----------

 

       

 

Business Ethics 2016, Lecture, Video, Case Study Guides and Quiz, Test Bank, Free Download
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Revel for Ethics and the Conduct of Business, 8th Edition, 2016, John R Boatright, Jeffery D. Smith
Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman
Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

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1. Ethics in the World of Business
2. Ethical Decision Making
3. Ethical Theories
4. Whistle-Blowing
5. Business Information and Conflict of Interest
6. Privacy
7. Discrimination and Affirmative Action
8. Employment Rights
9. Health and Safety
10. Marketing and Advertising
11. Ethics in Finance
12. Corporate Social Responsibility
13. Governance, Accountability, and Compliance
14. International Business Ethics
------
Part I: Legal and Ethical Environment

1. Legal Heritage and the Digital Age
2. Ethics and Social Responsibility of Business
3. Courts, Jurisdiction, and Administrative Law
4. Judicial, Alternative, and E-Dispute Resolution

Part II: Constitution and Public Law
5. Constitutional Law for Business and E-Commerce
6. Torts and Strict Liability
7. Criminal Law and Cyber Crimes
8. Intellectual Property and Cyber Piracy

Part III: Contracts, Commercial Law, and E-Commerce
9. Formation and Requirements of Contracts
10. Performance and Breach of Contracts
11. Digital Law and E-Commerce
12. UCC Sales Contracts, Leases, and Warranties
13. Credit, Secured Transactions, and Bankruptcy

Part IV: Business Organizations, Corporate Governance, and Investor Protection
14. Small Business, General Partnerships, and Limited Partnerships
15. Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business
16. Corporations and Corporate Governance
17. Investor Protection and E-Securities Transactions

Part V: Agency, Employment, and Labor Law
18. Agency Law
19. Equal Opportunity in Employment
20. Employment Law and Worker Protection
21. Labor Law and Immigration Law

Part VI: Government Regulation
22. Antitrust Law and Unfair Trade Practices
23. Consumer Protection
24. Environmental Protection
25. Real Property and Land Use Regulation

Part VII: Global Environment
26. International and World Trade Law

Part VIII: Accounting Profession
27. Accountants’ Duties and Liability
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PART ONE Basic Principles

Chapter 1 Ethics and Business
Introduction
1.1 The Nature of Business Ethics
ON THE EDGE: Was National Semiconductor Morally Responsible?
1.2 Ethical Issues in Business
ON THE EDGE: A Traditional Business
1.3 Moral Responsibility and Blame
ON THE EDGE: WorldCom’s Whistleblower
ON THE EDGE: Gun Manufacturers and Responsibility
CASES FOR DISCUSSION
Slavery in the Chocolate Industry
Aaron Beam and the HealthSouth Fraud

Chapter 2 Ethical Principles in Business
Introduction
2.1 Utilitarianism: Weighing Social Costs and Benefits
2.2 Rights and Duties
ON THE EDGE: Should Companies Dump Their Wastes In Poor Countries?
ON THE EDGE: Working for Eli Lilly & Company
ON THE EDGE: Conflict Diamonds
ON THE EDGE: ExxonMobil, Amerada Hess, and Marathon Oil in Equatorial Guinea
CASES FOR DISCUSSION
Traidos Bank and Roche’s Drug Trials in China

PART TWO The Market and Business

Chapter 3 The Business System: Government, Markets, and International Trade
Introduction
3.1 Free Markets and Rights: John Locke
3.2 Free Markets and Utility: Adam Smith
3.3 Free Trade and Utility: David Ricardo
3.4 Marx and Justice: Criticizing Markets and Free Trade
ON THE EDGE: Commodification or How Free Should Free Markets Be?
ON THE EDGE: Marx’s Children
3.5 Conclusion: The Mixed Economy, the New Property, and the End of Marxism
ON THE EDGE: Napster’s Lost Revolution
ON THE EDGE: Brian’s Franchise
CASES FOR DISCUSSION
The GM Bailout Accolade versus Sega

Chapter 4 Ethics in the Marketplace
Introduction
4.1 Perfect Competition
4.2 Monopoly Competition
ON THE EDGE: Drug Company Monopolies and Profits
4.3 Oligopolistic Competition
4.4 Oligopolies and Public Policy
ON THE EDGE: Fixing the Computer Memory Market
ON THE EDGE: Oracle and Peoplesoft
CASES FOR DISCUSSION
Intel’s “Rebates” and Other Ways It “Helped” Customers
Archer Daniels Midland and the Friendly Competitors

PART THREE Business and Its External Exchanges: Ecology and Consumers

Chapter 5 Ethics and the Environment
Introduction
5.1 The Dimensions of Pollution and Resource Depletion
5.2 The Ethics of Pollution Control
5.3 The Ethics of Conserving Depletable Resources
ON THE EDGE: Ford’s Toxic Wastes
ON THE EDGE: The Auto Companies in China
ON THE EDGE: Exporting Poison
CASES FOR DISCUSSION
The Ok Tedi Copper Mine
Gas or Grouse?

Chapter 6 The Ethics of Consumer Production and Marketing
Introduction
6.1 Markets and Consumer Protection
6.2 The Contract View of Business Firm’s Duties to Consumers
6.3 The Due Care Theory
ON THE EDGE: The Tobacco Companies and Product Safety
6.4 The Social Costs View of the Manufacturer’s Duties
ON THE EDGE: Selling Personalized Genetics
6.5 Advertising Ethics
ON THE EDGE: Advertising Death to Kids?
ON THE EDGE: New Balance and the “Made in USA” Label
6.6 Consumer Privacy
CASES FOR DISCUSSION
Becton Dickinson and Needle Sticks
Reducing Debts at Credit Solutions of America

PART FOUR Business and Its Internal Constituencies

Chapter 7 The Ethics of Job Discrimination
Introduction
7.1 Job Discrimination: Its Nature
ON THE EDGE: Helping Patients at Plainfield Healthcare Center
7.2 Discrimination: Its Extent
7.3 DISCRIMINATION: UTILITY, RIGHTS, AND JUSTICE
7.4 Affirmative Action
ON THE EDGE: Driving for Old Dominion
ON THE EDGE: Peter Oiler and Winn-Dixie Stores
CASES FOR DISCUSSION
Should Kroger pay now for what a Ralphs’ Employee did in the Past
Wal-Mart’s Women

Chapter 8 Ethics and the Employee
Introduction
8.1 The Rational Organization
8.2 The Political Organization
8.3 The Caring Organization
ON THE EDGE: HP’s Secrets and Oracle’s New Hire
ON THE EDGE: Insider Trading or: What Are Friends For?
ON THE EDGE: Delivering Pizza
ON THE EDGE: Sergeant Quon’s Text Messages
ON THE EDGE: Employment at Will at Howmet Corporation?
CASES FOR DISCUSSION
Death at Massey Energy Company
Who Should Pay?
------
key words
Ethics,
Ethical Decision Making,
Ethical Theories,
Whistle-Blowing,
Conflict of Interest,
Privacy,
Discrimination, Affirmative Action,
Employment Rights,
Health and Safety,
Ethics in Finance,
Corporate Social Responsibility,
Governance, Accountability, Compliance,
International Business Ethics,

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