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Exam 12: Business Organizations

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Question 31

Multiple Choice

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Phillipa is the sole proprietor of Incredible Floral Arrangements.As a sole proprietor, on Incredible's profits, Phillipa

A) does not pay income taxes.
B) pays only personal income taxes.
C) is taxed twice.
D) pays both personal and sole proprietor income taxes.

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Question 32

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Wiley incorporates his business as Wiley Wire Corporation in Texas to profit from sales of fencing wire.Wiley and the members of his family constitute the shareholders.Wiley Wire Corporation is

A) a sole proprietorship.
B) a limited liability company.
C) a partnership.
D) a close corporation.

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Question 33

Multiple Choice

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Pilar is interested in buying a franchise from Quixotic Travel & Tours Corporation.Quixotic must disclose material facts that Pilar needs to make an informed decision concerning this purchase, according to

Jordana is a member of Klondike Coffee, LLC, a limited liability company.Jordana is liable for Klondike's debts

A board of directors is the ultimate authority in every corporation.

The laws governing franchising are primarily designed to protect franchisors from dishonest franchisees.

A sole proprietorship continues after the death of the proprietor.

A sole proprietor has unlimited liability for all obligations incurred in doing business.

A corporation does not possess the same right of access to the courts as natural persons.

A corporation whose shares are held by relatively few persons is a close corporation.

Coast-to-Coast Distribution, Inc., is a direct-mail distribution company.Like most corporations, Coast-to-Coast's executive employees include its

Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation.Lily and Moe are Kleen's officers.As in other corporations, the responsibility for the overall management of Kleen rests with

Odell is a director of Price Rite, Inc.As a director, with respect to the corporation, Odell is

Laws governing franchising are designed in part to prevent franchisors from terminating franchises without good cause.

Jody owns KuppaJava Kiosks, a sole proprietorship.Jody's liability is

Chocolate Sundry LLC's members and managers are Devlin, Effie, and Flavia.After Devlin's relationship to the firm ends, Effie and Flavia agree to discontinue the business.This is

Corporate officers can usually be removed by the board of directors without cause.

Josh is a director of Sippy Soups, Inc.Josh opposes a contract that is in Sippy's best interest because Josh would like to enter into the contract for his personal benefit.Josh is liable for a breach of

In a limited liability partnership, a partner can be exempt from personal liability for the malpractice of other partners.

Robert owns Textbooks Plus, a sole proprietorship that sells textbooks.When Robert dies, Textbooks Plus will