Question 1

The joint venture is not automatically terminated when one of the members dies.

Accepted Answer

A) True 
 B)False

Question 2

Is Molly correct that she was entitled to cancel all franchise agreements?

Accepted Answer

A)   No, she was not entitled to cancel any franchise agreements.
B)   No, while she was arguably justified in canceling Suzette's franchise agreement, she was not justified in canceling other franchise agreements because no breach of the other franchise agreements had occurred.
C)   No, she could only cancel all franchises after a judgment was entered against her, and that had not yet occurred.
D)   Yes, because a personal service type of franchise was involved, she could cancel all the franchises at will.
E)   Yes, she can cancel the franchises but only if she can establish that her profits were less than had been expected.F) D) and E)
G) None of the above B

Question 3

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory?

Accepted Answer

A)   Distributorship
B)   Manufacturing arrangement
C)   Chain-style business operation
D)   Approved business franchise
E)   Acknowledged standards operationF) A) and B)
G) A) and C)

Question 4

A limited partnership and a limited liability partnership refer to the same type of business organization.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true regarding S corporations?

Accepted Answer

A)   They are considered partnerships yet taxed like corporations as long as they follow regulations.
B)   They cannot have more than 80 shareholders.
C)   Shareholders do not report profit on their personal income tax forms.
D)   They may be formed under federal law.
E)   Income is taxed only when distributed to the shareholders, who must not report the income on their personal income tax forms.F) D) and E)
G) A) and C)

Question 6

Which of the following is false regarding a general partnership?

Accepted Answer

A)   It is easy to create.
B)   Income of the business is personal income.
C)   Business losses can be deducted from taxes.
D)   The partners are considered agents of the partnership.
E)   In most cases partners do not have personal liability for losses.F) A) and B)
G) A) and D)

Question 7

Which of the following is false regarding a limited partnership?

Accepted Answer

A)   There must be at least one general partner.
B)   There must be at least two limited partners.
C)   The partnership must use the word "limited" in its title.
D)   The parties must file a certificate of partnership with a state office to create it.
E)   If a limited partner dies, the limited partnership is usually unaffected.F) B) and E)
G) C) and D)

Question 8

In which of the following does the franchise operate under the franchisor's business name and act subject to the franchisor's standards and methods of business operation?

Accepted Answer

A)   Distributorship
B)   Manufacturing arrangement
C)   Chain-style business operation
D)   Approved business franchise
E)   Acknowledged standards operationF) D) and E)
G) A) and B)

Question 9

Which of the following establishes how a franchise agreement will be terminated?

Accepted Answer

A)   The franchise agreement
B)   The Franchise Termination Act
C)   The Franchisor-Franchisee Protection Act
D)   The Franchisee Protection Act
E)   The Franchise Wrap-Up ActF) A) and C)
G) C) and D) A

Question 10

Which of the following is a group that comes together for the explicit purpose of financing a specific large project?

Accepted Answer

A)   A business trust
B)   A joint venture
C)   A syndicate
D)   A franchise
E)   An enterpriseF) D) and E)
G) A) and B)

Question 11

Which of the following is responsible for running the day-to-day business of a corporation?

Accepted Answer

A)   Investors
B)   Shareholders
C)   Officers
D)   Administrators
E)   Members of the board of directorsF) None of the above
G) A) and E)

Question 12

Which of the following is true regarding Molly's inspections of kitchens?

Accepted Answer

A)   Franchise law prohibits such inspections because a franchisee is seen as a separate corporation.
B)   Franchise law prohibits such inspections because a franchisee is seen as a separate partnership.
C)   Molly had the right to do so only if she can establish the existence of customer complaints.
D)   Molly had the right to do so only if workers' compensation claims had been filed against the franchisees involved.
E)   Molly had the right to inspect the kitchens.F) C) and E)
G) C) and D)

Question 13

Syndicates are usually considered a type of ______,thus they are almost always governed by ______ law.

Accepted Answer

A)   Limited liability company; corporate
B)   Joint venture; partnership
C)   Cooperative; corporate
D)   Business trust; corporate
E)   Joint stock company; partnershipF) C) and D)
G) A) and E)

Question 14

Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?

Accepted Answer

A)   A joint enterprise
B)   A syndicate
C)   A business trust
D)   An S corporation
E)   An E corporationF) A) and E)
G) A) and C)

Question 15

Which of the following is an organization formed by individuals,who usually pool their resources,to market products?

Accepted Answer

A)   A cooperative
B)   A consortium
C)   A corporation
D)   A universe
E)   An enterpriseF) A) and B)
G) A) and E)

Question 16

Which of the following is a partnership agreement in which company members hold transferable shares,while all the goods of the company are held in the names of the partners?

Accepted Answer

A)   A joint stock company
B)   A joint corporation
C)   A joint partnership
D)   A collusive partnership
E)   A collusive corporationF) C) and D)
G) All of the above

Question 17

What type of arrangement did Molly make with her friends?

Accepted Answer

A)   A franchise that was a chain-style business operation.
B)   A franchise that was a distributorship.
C)   A franchise that was a manufacturing agreement.
D)   A joint partnership.
E)   A joint venture.F) A) and C)
G) A) and E) A

Question 18

Which of the following was the result in the case in the text Mary Kay Inc.,v.Janet Isbell involving whether the defendant had a franchise that was wrongfully terminated?

Accepted Answer

A)   That under federal law, no franchise existed.
B)   That under state law, no franchise existed.
C)   That under federal law a franchise existed; but that under applicable law, the franchise was not wrongfully terminated.
D)   That under state law a franchise existed; but that under applicable law, the franchise was not wrongfully terminated.
E)   That under state law a franchise existed that was wrongfully terminated.F) A) and D)
G) A) and C)

Question 19

Which of the following is false regarding limited liability partnerships in Japan?

Accepted Answer

A)   The limited liability partnership has been recognized in Japan since the 1950s.
B)   Japan's limited liability partnership law limits the liability of its members by their capital contribution.
C)   In regard to profits, the Japan's limited liability partnership law requires that the members manage the business and negotiate among each other to determine how profits and losses should be distributed among individual members.
D)   When members are establishing the rules of the limited liability partnership, Japan requires either the agreement of all members or a majority of at least two-thirds of the members.
E)   Japan's limited liability partnership law puts restrictions on the distribution of partnership assets.F) D) and E)
G) B) and C)

Question 20

An S corporation cannot have more than 75 shareholders.

Accepted Answer

A) True 
 B)False

Exam 35: Forms of Business Organizations

The joint venture is not automatically terminated when one of the members dies.

Correct AnswerverifiedShow Answer

Is Molly correct that she was entitled to cancel all franchise agreements?

Correct AnswerverifiedB

Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory?

Correct AnswerverifiedShow Answer

A limited partnership and a limited liability partnership refer to the same type of business organization.

Correct AnswerverifiedShow Answer

Which of the following is true regarding S corporations?

Correct AnswerverifiedShow Answer

Which of the following is false regarding a general partnership?

Correct AnswerverifiedShow Answer

Which of the following is false regarding a limited partnership?

Correct AnswerverifiedShow Answer

In which of the following does the franchise operate under the franchisor's business name and act subject to the franchisor's standards and methods of business operation?

Correct AnswerverifiedShow Answer

Which of the following establishes how a franchise agreement will be terminated?

Correct AnswerverifiedA

Which of the following is a group that comes together for the explicit purpose of financing a specific large project?

Correct AnswerverifiedShow Answer

Which of the following is responsible for running the day-to-day business of a corporation?

Correct AnswerverifiedShow Answer

Which of the following is true regarding Molly's inspections of kitchens?

Correct AnswerverifiedShow Answer

Syndicates are usually considered a type of ______,thus they are almost always governed by ______ law.

Correct AnswerverifiedShow Answer

Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?

Correct AnswerverifiedShow Answer

Which of the following is an organization formed by individuals,who usually pool their resources,to market products?

Correct AnswerverifiedShow Answer

Which of the following is a partnership agreement in which company members hold transferable shares,while all the goods of the company are held in the names of the partners?

Correct AnswerverifiedShow Answer

What type of arrangement did Molly make with her friends?

Correct AnswerverifiedA

Which of the following was the result in the case in the text Mary Kay Inc.,v.Janet Isbell involving whether the defendant had a franchise that was wrongfully terminated?

Correct AnswerverifiedShow Answer

Which of the following is false regarding limited liability partnerships in Japan?

Correct AnswerverifiedShow Answer

An S corporation cannot have more than 75 shareholders.

Correct AnswerverifiedShow Answer

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B

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A

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Syndicates are usually considered a type of ,thus they are almost always governed by law.

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A

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