Midterm Study.docx

Chapter 605 of Florida Statutes governs Limited Liability Companies. True. A certificate of Limited Partnership must include the names of all the general partners but not the limited partners. True. (general partners should be included in the limited liability certificate since they are liable t...

Chapter 605 of Florida Statutes governs Limited Liability Companies. True. A certificate of Limited Partnership must include the names of all the general partners but not the limited partners. True. (general partners should be included in the limited liability certificate since they are liable to the public, while limited partners should not.) A Limited Liability Partnership in Florida is only available to businesses that provide professional services. False. Limited Partnerships can raise additional capital through debt capital and equity capital. True. To create a limited liability company, you must file an Operating Agreement with a Division of Corporation. False. A general partnership is a tax-reporting entity. True. (except for sole proprietorship) Limited partners in a Limited Partnership are not fiduciaries of the partnership. True. Marsha is opening a florist shop as a sole proprietor; she’s not hiring any employees and not setting up a retirement plan. She does not have to file an SS-4 form. True. (suggested, but since no taxes are reported, it is not required.) Fictitious name registrations are valid for ten years in Florida. False. (5 years) The two major exemptions from compliance with federal security laws are: 1. Interstate offerings 2. Private offerings False. (private offerings are one of them, but interstate should be in state trust.) Owners of a Limited Liability Partnership are referred to as “members.” False. (Owners of a Limited Liability Partnership (LLP) are referred to as "partners." Tina is a real estate agent; Malcolm lists his house with Tina’s real estate brokerage company. When Tina enters a listing for the house in the MLS, she inserts “withheld,” where the owner’s name may be inserted. In this situation, Tina is the agent for an undisclosed principal. False. (partially disclosed principal.) The liability of an employer for the negligent hiring of an employee is based on the doctrine of Respondeat Superior. False. (The employer is liable for negligent hiring if the employee harms others without a reasonable background check or due diligence. Meanwhile, respondeat superior holds employers accountable for their workers' acts while on the job.) A general partnership must file an application with each state other than the state of formation in which it wants to conduct business. False. (sole proprietor and general partnership are exempt from such rule) The document that legally creates a Limited Liability Partnership is the “Statement of Qualification.” True. Chapter 621 of the Florida Statutes governs professional Corporations. True. Registration of a fictitious name does not reserve or protect a fictitious name against another party's use. True. The document that a general partnership must file to place third parties on notice of limitations on a partner’s authority to act on behalf of the partnership is a “Registration Statement.” False. (the document that needs to be filed is a Statement of Authority. The statement of authority limits a partner's authority to bind the partnership, but the registration statement must be filed first or jointly.) If a sole proprietor wants to report a business loss to the IRS, they must use Schedule C. True. A business corporation is governed by Chapter 607 of the Florida Statutes. True. A general partnership must file an application with each state (other than its state of formation) in which it wants to conduct business. False. Agents typically owe their principals the duty of loyalty. True. Independent contractors are expected to exercise independent judgment. True. Failure to register a fictitious name is a first-degree misdemeanor in Florida. False. (a second-degree misdemeanor) As long as the agent is doing the assigned job, the owner may be liable wherever the agent is under the theory that the agent has merely detoured from the appointed route. True. An agent is not personally liable for any injury caused by their acts. False. The S.B.A guarantee limit is $500,000. False. ($750,000) C- Corporations are subject to double taxation. True. Limited Liability Partnerships are not required to file annual reports with the Division of Corporations. False. An agent with actual authority may have express authority. True. Business tax receipt is another name for occupational license. True. Larry owns a hardware store. He appoints Stan to be the store manager. Stan is considered a universal agent. False. (a general agent) A joint venture is formed for a single project or transaction. True. S Corporations are limited to 75 eligible shareholders. False. (100 eligible shareholders.) The directors of a corporation carry on the day-to-day activities of the corporation. False. (the officers) Limited partners in a Limited Partnership may not take part in other business opportunities. False. In full shield states, a partner in a Limited Liability Partnership has limited liability for partnership debts even if the debt was incurred due to their own wrongdoing. False. (he/she has limited liability for partnership debts, except if the debt was incurred due to their wrongdoing). In a sole proprietorship, there are no limits on how many people may be employed by the business. True. For an employer to be liable for the negligent hiring of an employee, it must show that the employer could have reasonably foreseen injury to the third-party. True. A not-for-profit corporation is a type of corporation that does not have shareholders. True. Limited Partnerships are governed by Chapter 621 of the Florida Statutes. False. (Chapter 620) In a sole proprietorship, the only method of raising capital is through debt capital. True. Activities in which limited partners may participate are referred to as “safe harbor” activities. True. Under F.R.U.L.P.A, partnership profits and losses in a Limited Partnership are distributed equally among the partners. False. (they are collected among the partners based on the value of the partner’s contributions.) Federal securities laws are sometimes referred to as “blue sky laws.” False. (State Securities laws are the ones referred to as “blue sky laws”) The document that must be filed with the Division of Corporations to legally create a Limited Partnership is a Certificate of Limited Partnership. True. If a Limited Partnership wants to transact business in another state, it must file to become a foreign Limited Partnership in that state. True. The document that must be filed with the Division of Corporations to create a Limited Liability Partnerships is a Statement of Qualification. True. There’s only one name for Limited Liability Limited Partnership. False. (it can also be titled “triple LP” L.L.L.P) S.E.C Form S-1 is a registration statement that is filed to transition from a private to a public corporation. True. If a corporation does not comply with necessary formalities, a court may _________. Pierce the corporate veil. For the right to do business as a corporation in a particular state, __________is imposed. Franchise tax. In Florida, this abbreviation _________ added as a suffix indicates that a business is a professional corporation. P.A. In Florida, a fictitious name registration is valid for ________ time period. Five years. Business Corporations are governed by ________ of the Florida Statutes. Chapter 607. __________ is the term for a person or organization that purchases securities from an issuer with a view to distributing them, or any person who offers or sells or participates in the offer or sale for an issuer of any security. Underwriter. A promoter will remain personally obligated on all contracts entered into unless ________ occurs after a corporation is created. Novation. A ________ is the term for the preliminary prospectus of a corporation. Red herring. A ________ is the term for a corporation owned by another corporation. Subsidiary. The ________ is the principle that if persons running a corporation make honest, careful decisions within their corporate powers, no court will interfere with these decisions, even if the results are bad. Business judgment rule. ________ is the document by which the internal affairs of a corporation are governed. Bylaws. If a partnership files a voluntary statement of dissociation, the partnership is liable for the acts of the dissociating partner for ________ days. 90 days. Brokers operating in the OTC market are subject to regulation by _________. Financial Industry Regulatory Authority (FINRA) EDGAR is the site where one can find all SEC filings pertaining to a particular _________. Corporation. Compliance with federal securities laws is not required if a limited partnership qualifies for _________ offering and an _________ offering. Private and Intra-State. Under _________ doctrine, the unanimous consent of the partners is required to confer partnership on another person. Delectus personae. __________ activities in which a limited partner in a limited partnership can participate without risking the loss of limited liability. Safe Harbor. A partner’s creditors may obtain a ____________ from a court to go after a partner’s interest in a partnership. Charging Order. If a general partnership wants to limit its liability for the actions of one of the partners, it must file a ________ statement and a statement of ___________ with the Division of Corporations. Registration and Authority. The type of relationship resulting from the creation of an agency relationship is called ____________. Fiduciary. Which form must be completed to obtain an employer identification number? Form SS-4. In Florida, for how long is a written subscription agreement irrevocable? Six months. What is the first part of a registration statement that must be given to any purchaser of securities? Prospectus. Which of the following is a tax that a state may impose when stock transfers hands? Share transfer tax or documentary stamp tax. How many eligible shareholders can a subchapter S corporation have at maximum? 100 shareholders. What is the term for two or more companies with the same or mostly the same owner(s)? Commonly Controlled Entities or Sister Corporations. Under which chapter of the Florida Statutes are general partnerships governed? Chapter 620. Which of the following is the doctrine under which an employer may be vicariously liable for the tort of an employee? Respondeat Superior Which of the following are the two types of underwriter agreements? Best Efforts and Firm Commitment. Which of the following is the form for a public corporation’s annual report? 10-K Which of the following are the two necessary documents to form a limited liability company? Articles of Organization and Operating Agreement. What is the term for profits paid out to shareholders in proportion to each shareholder’s interest in the corporation? Dividends. The purpose of the Sarbanes-Oxley Act federal law is to assist companies in tax evasion by improving the accuracy and reliability of corporate disclosures. False. (Sarbanes-Oxley Act is to protect investors by ensuring more accurate and reliable corporate financial disclosures, not to regulate international trade.) Which of the following is the doctrine that requires that, upon dissolution of a not-for-profit corporation, all of its assets be distributed to an organization existing for similar purposes? Doctrine of Cy Pres. Federal securities laws are sometimes referred to as: Blue Sky Laws. Which of the following is the term for someone authorized by the principal to handle a definite business transaction or to do a specific act? Special Agent. Which of the following are the three fiduciary duties of corporate directors? Duty of Care, Duty of Loyalty, and Duty of Good Faith. Which of the following is the rule that requires creditors to look to business assets first before going after the partners’ personal assets? Marshaling of Assets or Exhaustion Rule. To obtain tax deductions for a home office, which form must be filed with the IRS? Form 8829. To elect subchapter S status, which form must be filed with the IRS? Form 2553. A public corporation must file this whenever any material information within a corporation’s registration statement changes. Form 8-K. Which two federal acts play the largest role in the formation and regulation of public corporations? The Securities Act of 1933 and the Securities Exchange Act of 1934. A partner’s creditors may obtain this from a court to go after a partner’s interest in a partnership. Charging Order.  Juanita is the sole owner of a computer service business. Juanita hires Alberto to manage the business. Juanita- principal. Alberto- agent. Denzell is a lawyer specializing in the law of business organizations. His clients include XYZ Corporation. Denzell- agent. XYZ Corporation- principal. John, a prisoner, wants to marry Betty in a church wedding. The prison does not have a chapel. John and Harry agree that Harry will stand in for John at John's wedding at a nearby church. John- principal Betty- neither. Harry- agent. Cafe Boeuf is a fancy French restaurant owned by Henri, Maurice, and Jeanette as equal partners. At the meeting of the three owners, Henri mentioned that the dry-cleaning store adjacent to the restaurant was for sale. The three partners unanimously voted to purchase and operate the dry cleaners and appointed Henri to act on the partnership's behalf. In light of this action, which of the following statements is true? Henri has authority because even though owning a dry cleaner is not within the partnership's business, the vote of the partners is an act of the partnership as principal that would create actual authority in Henri as agent to perform the act. Corporations: Chapter 607 governs the formation and operation of corporations in Florida. This chapter includes provisions for both for-profit and nonprofit corporations. Limited Liability Companies (LLCs): Chapter 605 provides the rules and regulations for forming and managing limited liability companies in Florida. Partnerships: Chapter 620 covers various forms of partnerships, including general partnerships, limited partnerships, and limited liability partnerships (LLPs). Sole Proprietorships: Not specifically governed by a separate chapter in the Florida Statutes. Professional Associations and Entities: Chapter 621. Cooperatives: Chapter 618 governs cooperative associations, which are businesses owned and controlled by their members. Nonprofit Organizations: Chapter 617.