What makes a publicly held corporation different from a public corporation? a.
0 A publicly held corporation has had an IPO, and has many private shareholders rather than being a corporation owned by a governmental entity. b.
0 A publicly held corporation is entitled to limited liability, but the public corporation is not. c.
0 A publicly held corporation must have a charitable purpose, but a public corporation need not have a charitable purpose d.
0 They are two terms that have the same meaning.
If a corporation is properly incorporated in one state and wants to do business in a second state, the corporation a.
0 must incorporate in the second state
0 must do nothing because being incorporated in one state entitles the corporation to do business in all states c.
0 register with the Interstate Corporation Commission
0 may be required to obtain a certificate of authority from the second state
Limited partners can lose their limited liability by
0 investing too much in the partnership
0 withdrawing from a limited partnership contrary to provisions in the limited partnership agreement c.
0 actively managing the business of the limited partnership d.
0 breaching the fiduciary duty to the limited partnership
The major disadvantage of a sole proprietorship is
0 the difficulty and cost of formation
0 the unlimited liability for the business’ debts
0 the sharing of management authority with others
0 the difficulty in transferring ownership to others
ABC Corp. buys all of the stock of XYZ Corp., a publicly traded company, in a tender offer. Which of the following is true about the liabilities of XYZ Corp.? a.
0 Because XYZ Corp. was publicly traded at the time of its sale, its liabilities are extinguished by the sale of its stock. b.
0 The stockholders of XYZ Corp. remain liable for the liabilities of XYZ Corp. after the sale of the company to ABC. Corp. c.
0 Because this is a stock deal of a public company, all of the liabilities of XYZ Corp. are acquired by ABC Corp., in connection with the acquisition of the stock. d.
0 The officers and directors of XYZ Corp. remain liable for the liabilities of XYZ Corp. after the transaction.
Objective: Differentiate among non-judicial methods of alternative dispute resolution.
What are the characteristics of mediation?
0 The mediator hears the evidence presented by the parties, and then decides how the problem should be resolved. b.
0 Mediation is final, binding, and nonappealable.
0 The mediator must have a stake in the dispute.
0 Mediation facilitates the parties in developing a mutually agreeable resolution.
Week Two: Torts
Objective: Identify potential tort risks that arise in the business context.
Under federal rules regulating food and drugs, which of the following is true? a.
0 Food must be pure 100% before it can be sold to consumers. b.
0 Food may contain certain impurities, such as insect parts, as long as it is not adulterated. c.
0 If a food contains impurities, such as insect parts, these impurities must be disclosed on the food label. d.
0 All food must be inspected by the government before it is sold.
Objective: Apply the risk management process to mitigate business risk.
To protect the interests of shareholders and investors, the Sarbanes-Oxley Act provides for the establishment of the _____________ to oversee audits of public companies. a.
0 Corporate Audit Committee
0 Internal Auditing Investigation Board
0 Accounting Inspection Committee
0 Public Company Accounting Oversight Board
Objective: Differentiate between types of torts.
Based on the law of product liability, which of the following is correct? a.
0 A manufacturer should design its products to take into account foreseeable misuse. b.
0 A manufacturer should design its products to take into account all possible misuse. c.
0 A manufacturer should design its products to take into account all...
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