BLAW 221 Unit 4 Study Guide FA18 - Chapters 13-16 Name
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the
question.
1) A franchise should be thought of as
A) a type of business entity. B) a method of conducting business.
C) a federally regulated business entity. D) a contractually based business entity.
2) Stanton and Francesca have started a general partnership. Stanton has contributed 95 percent of the start-up
capital and has the business experience and contacts, while Francesca's primary contribution is the labor
necessary to operate the business. Management decisions are jointly made. At the end of the year, the
business has shown a $100,000 profit. Stanton and Francesca have no formal written partnership agreement.
A) The RUPA mandates that each get $50,000.
B) The RUPA mandates that Francesca be paid a fair amount for her labor contribution and the
remaining profits be split equally between Stanton and Francesca.
C) The RUPA mandates that Francesca be paid a fair amount for her labor contribution and the
remaining profits be split with 95 percent going to Stanton and 5 percent going to Francesca.
D) Stanton is entitled to $95,000, and Francesca gets $5,000.
3) The first LLP legislation was enacted in
A) Iowa. B) Florida.
C) Texas. D) New York.
4) The ability to distribute earnings without incurring double-level taxation is an advantage of a
A) pass-through entity. B) member-managed LLC.
C) manager-managed LLC. D) corporate tax structure.
5) Formation of an LLC requires the filing of
A) articles of organization. B) a certificate of formation.
C) a record of business creation. D) a statement of qualification.
6) Wayne is the president and CEO of a corporation. He owns 25 percent of the company's total stock and has
been selling large chunks of his holdings over the past three months. If the SEC investigates him for shortswing profits, it would do so under
A) Regulation D of the 1933 Act. B) Rule 10(b)(5) of the 1934 Act.
C) Section 16 of the 1934 Act. D) the Private Securities Litigation Reform Act of 1995.
7) The most commonly used debt instrument is
A) a debenture. B) a bond.
C) a promissory note. D) common stock.