Reg 8 Flashcards

Question

``` Which of the following statements is(are) correct regarding the relationship between an agent and a nondisclosed principal? I. The principal is required to indemnify the agent for any contract entered into by the agent within the scope of the agency agreement. II. The agent has the same actual authority as if the principal had been disclosed. a. Neither I nor II. b. II only. c. I only. d. Both I and II. ```

Answer 1

Choice "d" is correct. A principal owes her agent the duty of indemnification, which is a type of reimbursement for costs and liabilities incurred by the agent as a result of authorized acts on behalf of the principal. Actual authority is the authority that the agent reasonably believes she possesses because of the principal's communications to the agent. The agent has the same actual authority whether the principal is disclosed or undisclosed.

Answer 2

Choice "b" is correct. A principal is required to pay its commissioned agent as agreed and thus must maintain sufficient records in order to do so. Therefore, statement I is true. Statement II is also true. Generally, a principal must indemnify an agent for all expenses the agent reasonably incurs on the principal's behalf unless the parties have agreed otherwise.

Answer 3

Choice "d" is correct. I is incorrect because while a principal must have capacity, an agent need not have capacity; a minor may serve as an agent. II is incorrect because destruction of the subject matter of the agency constitutes a change in circumstances that will terminate the agency by operation of law and release the parties from their relationship.

Answer 4

Choice "c" is correct. An agency is terminated by operation of law upon the incapacity of the principal; no notice is needed. Choice "b" is incorrect. An agency is terminated by operation of law upon the incapacity of the principal; notice to the third party with whom the agent deals is not necessary. Choice "d" is incorrect. An agent's authority is terminated by operation of law upon the incapacity of the principal regardless of whether the authority was express, implied, or apparent. Choice "a" is incorrect. Ogden will not be liable because of the incapacity; Ogden's status as a disclosed vs. undisclosed principal is irrelevant.

Answer 5

Choice "b" is correct. An agent owes the principal a duty of loyalty, which includes the duty to act solely in the principal's interest in matters relating to the agency. Choice "d" is incorrect. A principal has the power to terminate an agency relationship at any time, although the principal might be liable for damages if the termination is in breach of contract. Choice "c" is incorrect. A contract for services need not be in writing unless it cannot be performed within one year. The service contract here is for six months. Choice "a" is incorrect. An agency coupled with an interest arises only when the agent is given an interest in the subject matter of the agency. A sales commission is not a sufficient interest.

Answer 6

Choice "a" is correct. Generally, agency power may be granted orally, even if the agent enters into contracts that must be in writing to be enforceable. However, most states require an agency agreement to be in writing if the agent is to purchase or convey interests in land. Choice "c" is incorrect. Generally, agency power may be granted orally. The power to buy office supplies need not be granted in writing. Choice "d" is incorrect. Generally, agency power may be granted orally. The power to hire persons to perform services need not be granted in writing. (Note that repairing a building involves a service and not an interest in land.) Choice "b" is incorrect. Generally, agency power may be granted orally, even if the agent is to enter into contracts that must be in writing to be enforceable. The power to hire persons to perform services need not be granted in writing.

Answer 7

Choice "b" is correct. Although Bolt gave known customer's notice of Ace's dismissal, some courts might also require a notice placed in a newspaper to terminate Ace's apparent authority as to people, like Young, who had heard of Ace. Choice "d" is incorrect. Although Ace lacked implied authority, a court might find that he had apparent authority since Bolt had held Ace out as its agent previously. Choice "c" is incorrect. Although Ace lacked express authority, a court might find that he had apparent authority since Bolt had held Ace out as its agent previously. Choice "a" is incorrect. A principal is not an insurer of an agent's acts. A principal is liable only when the agent acts with authority.

Answer 8

Choice "b" is correct. Actual authority arises from the communications between the principal and the agent. Whether the agent discloses the principal to the third party with whom the agent contracts has no effect on the communications between the principal and the agent. Choice "a" is incorrect. Apparent authority arises from the communications between the principal and the third party with whom the agent deals. If the principal is undisclosed, as under the facts here, the third party has no idea that there is a principal, and so there are no communications between the third party and the principal from which apparent authority can arise. Choice "d" is incorrect. A principal generally is not liable for an agent's torts, but can be liable when the torts are authorized. The fact that the principal is undisclosed has no effect on this rule. Choice "c" is incorrect. When a principal is undisclosed, the third party with whom the agent deals may hold either the agent or the principal liable on contracts that the agent enters into on the principal's behalf.

Answer 9

Choice "c" is correct. A power of attorney is a form of agency, and like all agencies the power of attorney agency relationship may be limited in scope of authority. Choice "d" is incorrect. As a general rule, no writing is required to form an agency relationship, and even where a writing is required, the writing need only be signed by the principal (the one sought to be bound). Choice "a" is incorrect. A power of attorney, like other agencies, need not explicitly state a duration. Choice "b" is incorrect. A power of attorney, like all agencies, is terminated by the death of either the principal or the agent.

Answer 10

Choice "d" is correct. If the principal is undisclosed, the third party with whom the agent dealt can hold the agent liable on the contract. Choice "c" is incorrect. A third party has no general right to discover the identity of an undisclosed principal. Choice "a" is incorrect. A third party never has the right to force a principal to ratify a contract; only a principal has a right to choose to ratify an unauthorized contract. Choice "b" is incorrect. As a general rule a third party who has contracted with an agent for an undisclosed principal has no right to rescind the contract upon subsequent disclosure of the principal. Such a right exists only if the nondisclosure was fraudulent.

Answer 11

Choice "a" is correct. Here, Sutter had no actual authority because actual authority is that authority which the agent reasonably believes he has, and here North told Sutter that he no longer had authority to make unlimited purchases. There is no requirement that actual authority granted in writing be rescinded in writing. Nevertheless, North will be bound because Sutter had apparent authority. Apparent authority arises from a third party's reasonable beliefs based on the principal's communications directed toward the third party. Here, North had given Sutter written authorization to make purchases for North without limitation, and Orr had been shown the written authorization. North's secret limitation on Sutter's authority has no effect on Sutter's apparent authority. Thus, North is liable to Orr for the purchase of all 500 recorders because Sutter had apparent authority.

Answer 12

Choice "d" is correct. Generally, a general agent's apparent authority does not cease unless and until notice is given. However, if the principal has received a discharge in bankruptcy, notice is not required to terminate the agent's apparent authority.

Answer 13

Choice "b" is correct. A third party may withdraw from a transaction or agreement entered into with an agent who exceeded his or her authority at any time prior to the principal's ratification of the agent's unauthorized acts. In this case King notified Maple of King's withdrawal from the agreement on May 1, six days before Maple's attempted ratification on May 7. Therefore, Maple's action will fail.

Answer 14

Choice "a" is correct. An employer is liable for his or her own negligent acts. Under the doctrine of respondeat superior, an employer is also liable for the negligence of employees committed within the scope of employment. Failure to correct a dangerous condition that resulted in injury would be negligence by the employer. Failure of an employee to warn the employer would also be negligence by the employee. This would also subject the employer to liability under the doctrine of respondeat superior.

Answer 15

Choice "c" is correct. Under the doctrine of respondeat superior, a principal, including a corporation, can be held liable for an employee's tort committed within the scope of employment. Choice "d" is incorrect. Ultra vires is a doctrine limiting a corporation's power to act outside the scope of the corporation's stated purposes or statutory powers. Choice "a" is incorrect. Corporation by estoppel prevents (stops) a party to a lawsuit from successfully arguing that an entity is not a corporation on account of the failure of the entity to comply fully and timely with all the provisions of state law with respect to the formation and operation of a corporation. The party is so prevented ("estopped") on account of that party's previously treating the entity as if the entity had been a properly-formed and properly-operated corporation. Choice "b" is incorrect. Ratification occurs when a principal agrees to be bound by a previously unauthorized contract entered into by an agent on the principal's behalf.

Answer 16

Choice "c" is correct. Creation of an agency relationship requires the consent of the parties and that the principal be competent (not a minor and not incompetent). Choice "b" is incorrect. Consideration is not required to create an agency relationship. Choice "a" is incorrect. The agent need not have capacity; only the principal need have capacity. Choice "d" is incorrect. A writing to establish an agency-principal agreement is generally not needed unless: (i) the agent is to buy/sell land on behalf of the principal and/or (ii) the agency relationship cannot be performed within one year.

Answer 17

Choice "c" is correct. The most important factor in determining whether a person is an independent contractor is the right to control the manner in which work is performed. An employer has the right to control the manner in which an employee performs his or her work but has little control over the manner in which work is performed by the work of an independent contractor.

Answer 18

Choice "d" is correct. An agent owes a duty of loyalty to his principal. This duty includes the duties not to self-deal, usurp opportunities, or have conflicts of interest with the principal. Roger's purchase through his corporation, Sneak, was self-dealing and usurped an opportunity belonging to his principal. Choice "c" is incorrect. The duty of indemnification is the duty to hold the agent harmless for liabilities the agent incurs on behalf of the principal. Choice "b" is incorrect. The agent has a duty to notify the principal of all issues known to the agent. Choice "a" is incorrect per the above explanation.

Answer 19

Choice "d" is correct. In order to ratify the contract (ratification of an entire unauthorized act) between Kent and Fox, Ace (principal) must have knowledge of all material facts of the transaction (and want to ratify it) at the time of the ratification. Choice "b" is incorrect. Ratification of an unauthorized act does not require that the party acting be a general agent. Choice "c" is incorrect. The principal (Ace) need not give notice of the intent to ratify because the third party already presumed the principal was bound through the agent's act. Choice "a" is incorrect. There is no requirement that the agent must have acted reasonably and in the principal's best interest; the principal is given the option to ratify even if the agent acted recklessly and in his own interest.

Answer 20

Choice "a" is correct. An employer/independent contractor relationship arises when an employer hires someone to do a job but does not have control over the manner in which the work is performed. In performing and audit, a CPA must have independence with regard to how the audit is performed. Thus, an employer/independent contractor relationship arises.

Answer 21

Choice "a" is correct. If (i) a person acts without authority but purportedly on behalf of a principal, (ii) the principal subsequently becomes aware of all of the material facts regarding the transaction, and (iii) the principal either expressly or by implication (e.g., by retaining the benefits of the transaction when he or she could have declined or returned the benefits) affirms the person's unauthorized acts, a ratification has occurred.

Answer 22

Choice "b" is correct. Formation of an agency relationship requires a principal who has contractual capacity. Choice "d" is incorrect. Formation of an agency relationship may be oral; a writing is not required. Choice "c" is incorrect. Because an agency relationship may be formed without a writing, the agreement need not be signed by both parties. Choice "a" is incorrect. Formation of an agency relationship requires consent of the parties, but consideration is not required.

Answer 23

Choice "a" is correct. Notification to third parties is not required when actual authority of an agency relationship terminates as an operation of law. These include death of either the principal or the agent, incapacity of the principal, discharge in bankruptcy of the principal, failure to acquire a necessary license, destruction of the subject matter, or subsequent illegality.

Answer 24

Choice "d" is correct. Workers' compensation programs are state run programs designed to enable employees to recover for injuries incurred while on the job. Most employers must participate in the programs; however, there are a few exceptions, including an exception for employers employing casual workers. A temporary office worker would be considered a casual employee.

Answer 25

Choice "d" is correct. The general purpose of OSHA is to ensure workplace safety for employees. To further this goal, OSHA is authorized to establish regulations aimed at eliminating workplace hazards of all kinds, including exposure to substances that may be harmful to employees' health. OSHA is not authorized to actually develop safety equipment, or require instruction for its use.

Answer 26

Choice "d" is correct. FUTA tax is payable by the employer. It is deductible as a business expense. It is not withheld and is not payable on all wages. Choice "c" is incorrect. The FUTA tax is not a fixed rate on all compensation. It applies only up to a $7,000 ceiling. Choice "b" is incorrect. The FUTA tax applies only to employers who have a quarterly payroll of at least $1,500 or employ at least one employee at least one day a week for 20 weeks during a year. Choice "a" is incorrect. The employer pays FUTA tax. The tax is not withheld from employees' wages.

Answer 27

Choice "d" is correct. Nonexempt employees are entitled to overtime pay whenever they work more than 40 hours in any given weekly period. Therefore, the employee is entitled to overtime of five hours from week 1 and 2 hours from week 2. Weeks 3 and 4 do not offset the entitlement.

Answer 28

Choice "d" is correct. OSHA allows inspections at the request of employees. 29 U.S.C. §657(f)(1) Choice "a" is incorrect. OSHA provides for searches without a warrant based on probable cause. 29 U.S.C. §657(a) Choice "b" is incorrect. OSHA provides for searches during regular business hours or at other reasonable times. 29 U.S.C. §657(a) Choice "c" is incorrect. There is no 24-hour notice requirement.

Answer 29

Choice "d" is correct. Employers cannot unduly delay an employee's participation in a pension plan. Choice "c" is incorrect. ERISA does not establish a right to a pension plan; it just regulates pension plans if they are adopted. Choice "b" is incorrect. Under ERISA, employers can manage retirement plans. Choice "a" is incorrect. ERISA does not give employees an absolute right to make investment decisions.

Answer 30

Choice "c" is correct. All employers who have quarterly payrolls of at least $1,500 or who employ at least one person one day a week for twenty weeks in a year must participate in FUTA.

Answer 31

Choice "a" is correct. A noncontributory pension plan is one where the employer makes all of the contributions to the plan; the employee makes no contributions.

Answer 32

Choice "a" is correct. OSHA contains a "whistleblower" protection provision. Choice "d" is incorrect. OSHA does not require a risk-free work environment; that would be impossible. Rather, OSHA regulations generally try to make workplaces as safe as they reasonably can be. Choice "b" is incorrect. OSHA does not allow inspection at any time, for example, inspections generally must be during normal hours of operation. Choice "c" is incorrect. OSHA allows states to adopt other safety regulations.

Answer 33

Choice "a" is correct. Title VII prohibits discrimination on the basis of race, religion, sex, national origin, etc., but it does not prohibit age discrimination. There is another federal statute for that. Choice "d" is incorrect. Title VII prohibits discrimination in the basis of sex. Choice "c" is incorrect. Title VII prohibits discrimination on the basis of race. Choice "b" is incorrect. Title VII prohibits discrimination on the basis of religion.

Answer 34

Choice "d" is correct. Some workers, for example cab drivers, must be paid at least minimum wage but need not be paid overtime. These are generally described as exempt workers. Choice "b" is incorrect. If workers are within the overtime provisions, they also are within the minimum wage provisions. Choice "a" is incorrect. Not all workers are subject to the minimum wage requirements. For example, farm workers need not be paid minimum wage. Choice "c" is incorrect. The exemptions do not depend on a union contract.

Answer 35

Choice "b" is correct. COBRA requires employers to provide former employees and their spouses and dependents insurance for 18 months after the employee resigns. The employer may charge the employee up to 102% of the cost of the insurance. Choice "d" is incorrect. COBRA requires the insurance to be made available to the employee for 18 months. Choice "c" is incorrect. COBRA requires the insurance to be available to the former employee's spouse as well as the former employee. Choice "a" is incorrect. COBRA requires the insurance to be available to the former employee's spouse as well as to the former employee.

Answer 36

Choice "c" is correct. Directors are treated as independent contractors. Thus, their compensation is self-employment income. Choice "b" is incorrect. Only wages are taxable as employee income. A director does not receive wages from his corporation, but rather stands as an independent contractor. Choice "a" is incorrect. Income derived from performing services for an employer constitutes wages, not other income. Choice "d" is incorrect. Since Ryan is obligated to attend meetings to receive the $5,000, it is not a gift.

Answer 37

Choice "c" is correct. Under workers' compensation laws, employers are generally strictly liable for injuries to employees. Choice "b" is incorrect. Workers' compensation is available for injuries incurred on the job as long as they were not purposely self-inflicted. Choice "a" is incorrect. Decisions of all government agencies are reviewable by the courts as a matter of due process. Choice "d" is incorrect. The amount recoverable under workers' compensation is based on the nature of the injury and has nothing to do with contributory negligence.

Answer 38

Choice "c" is correct. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Income for working as a director constitutes income from labor. Choice "b" is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Proceeds from an annuity do not constitute income from labor. Choice "d" is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Pension benefits do not constitute income from labor. Choice "a" is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Dividends from stock do not constitute income from labor.

Answer 39

Choice "a" is correct. The Employment Retirement Income Security Act (ERISA) does not require employers to have retirement plans or require contributions to existing retirement plans. ERISA does not mandate that employers are required to include employees as pension-plan managers. ERISA does establish standards for funding and investing and imposes fiduciary duties on pension fund managers. Only choice "a" reflects that employers are not required to establish a pension plan and employees do not need to be included as pension-plan managers.

Answer 40

Choice "c" is correct. Worker's compensation benefits are available if the employee is injured within the scope of employment. Choice "a" is incorrect. The injury need not occur on workplace premises; it need only occur within the scope of employment. Thus, if an employee is injured off-site but while working for an employer, the employee is covered. Choice "d" is incorrect. This choice is wrong for two reasons: worker's compensation covers only employees ("agent" is broader) and, in most cases, commuting to and from work is not within the scope of employment. Choice "b" is incorrect. This choice also is wrong for two reasons: again, not all agents are employees and so not all agents are covered, and use of one's automobile for personal purposes is not within the scope of employment.

Answer 41

Choice "b" is correct. Taxes paid under "FUTA" are deductible by the employer as a business expense for federal income tax purposes. Choice "a" is incorrect. The employee does not get a deduction since the employee has not paid the tax. Choice "c" is incorrect. Only the first $7,000 of a covered employee's wages is taxable. Choice "d" is incorrect. An employer does not have to pay the tax unless the employer has a quarterly payroll of at least $1,500.

Answer 42

Choice "c" is correct. Under FICA, wages are compensation for labor. Reimbursed travel expenses are not considered wages and are not in gross income; therefore they are not subject to FICA. Choice "b" is incorrect. Under FICA, wages are compensation for labor. Thus, contingent fees would be considered as wages. Choice "a" is incorrect. Under FICA, wages are compensation for labor. Thus, bonuses would be considered as wages. Choice "d" is incorrect. Under FICA, wages are compensation for labor. Thus, commissions would be considered as wages.

Answer 43

``` Choice "c" is correct. Social security benefits do not include Medicaid payments. Medicaid is a state run program. The federal social security system contains four major benefit programs: (OASI) old age and survivors insurance. (DI) disability insurance. (Medicare). (SSI) supplemental security income. Choices "b", "a", and "d" are incorrect, since social security benefits may include: b. Payments to divorced spouses. a. Payments to disabled children. d. Medicare. ```

Answer 44

Choice "c" is correct. The employer may take a credit against the federal unemployment tax in an equal amount to the state rate. Here the state rate of 5.4% will be used since it is less than the federal rate.

Answer 45

``` Choice "b" is correct. (Wages are subject to FICA) Since a car received as a productivity award would be considered a substitute for wages/salary, the fair market value of the car would be subject to FICA taxation. Choices "a", "c", and "d" are incorrect, since the following forms of income would not be subject to taxation under FICA. a. Interest on municipal bonds c. Capital gains d. Dividends ```

Answer 46

Choice "d" is correct. Unemployment compensation benefits are available to an unemployed CPA (or anyone else) who was discharged (fired) as a result of the employer's business reversals. Choice "c" is incorrect. Unemployment benefits are not available where an unemployed individual refuses to accept similar work while receiving extended benefits. Choice "a" is incorrect. Unemployment benefits are not available where the unemployed CPA was fired for embezzling. Choice "b" is incorrect. Unemployment benefits are not available where the unemployed CPA left work voluntarily without good cause.

Answer 47

Choice "a" is correct. Workers' compensation laws do not provide for "full" pay during a disability. With disability benefits the employee may receive a percentage of his/her wages, but not "full" wages. Choice "b" is incorrect. Workers' compensation laws can provide for burial expenses. Choice "d" is incorrect. Workers' compensation laws can provide for the cost of a prosthetic device. Choice "c" is incorrect. Workers' compensation laws can provide for payments to surviving dependent children.

Answer 48

Choice "c" is correct. An employer who fails to withhold FICA taxes from an employee's wages is liable for the employee's portion. Once the employer pays both shares to the government, he/she has the right to be reimbursed by the employee for the employee's share. Choice "a" is incorrect. Where the employer fails to withhold, the employer becomes primarily liable for the employee's share. Choice "b" is incorrect. Employers are allowed a deduction for the employer's portion. Choice "d" is incorrect. The penalties are based on the failure to pay and not on the failure to collect the tax.

Answer 49

Choice "b" is correct. An employer's payment under the Federal Unemployment Tax Act (FUTA) is a tax-deductible employer expense. Choice "d" is incorrect. An employer that does not have a quarterly payroll of at least $1,500 or does not employ at least one person one day a week for 20 weeks in a year does not have to pay. Choice "a" is incorrect. The federal unemployment tax is paid by the employer and not deducted from the employee's wages. Choice "c" is incorrect. The federal unemployment tax is paid to the Internal Revenue Service and not to the Social Security Administration.

Answer 50

Choice "c" is correct. Workers' compensation laws require that employers provide coverage for all eligible employees. Choice "b" is incorrect. Workers' compensation contributions are made by the employer. Choice "a" is incorrect. No such rule! Employees are paid a percentage of their wage subject to established limitations. Choice "d" is incorrect. There is no federal insurance fund. Workers' compensation laws are administered at the state level.

Answer 51

Choice "c" is correct. The Fair Labor Standards Act governs wages and hours. Choice "b" is incorrect. The National Labor Relations Act governs collective bargaining (i.e., unions) activities. Choice "d" is incorrect. The Taft-Hartley Act governs labor relations. Choice "a" is incorrect. The ADA prohibits discrimination; it does not govern wages and hours.

Answer 52

Choice "a" is correct. The age discrimination in employment act ("ADEA") prohibits age discrimination, whether intentional or unintentional. Choice "c" is incorrect, because the ADEA does not prohibit termination for cause at any age. Choice "d" is incorrect, because the ADEA does not prohibit mandatory retirement for employees over 40 if, for example, there is a bona fide occupational qualification. Choice "b" is incorrect, because the ADEA does not prohibit termination of employees as part of a rational business decision.

Answer 53

Choice "b" is correct. Steve will not need to sue his employer to collect worker's compensation. Employers are strictly liable regardless of fault for injuries incurred by employees while in the performance of their jobs. Choice "c" is incorrect. Steve is eligible for workers compensation regardless of whether he has private health or disability insurance. Choice "d" is incorrect. Steve does not need to be completely disabled to collect workers compensation. Choice "a" is incorrect. Steve will not need to sue his employer to collect worker's compensation. Employers are strictly liable.

Answer 54

Choice "c" is correct. Any person, including an ordinary citizen, must file a report when transporting or shipping more than $10,000 into or out of the United States or if the person has an interest in one or more financial accounts in a foreign country if the aggregate value at any point in the calendar year exceeds $10,000 (a Report of International Transportation of Currency or Monetary Instruments and a Report of Foreign Bank and Financial Accounts, respectively).

Answer 55

Choice "c" is correct. A CTR must be filed within 15 days after the date of a qualifying transaction (i.e., a deposit or withdrawal of more than $10,000).

Answer 56

Choice "a" is correct. When a bank sells a monetary instrument for $3,000 to $10,000, inclusive, it must obtain information regarding the identity of the purchaser and retain the information for at least five years.

Answer 57

Choice "c" is correct. A car dealer may not be designated an exempt person for purposes of filing currency transaction reports under the Bank Secrecy Act. Criminals often try to launder money by purchasing and selling cars. Choices "d", "b" and "a" are incorrect because all three types of customers may be designated exempt persons for purposes of filing currency transaction reports under the Bank Secrecy Act.

Answer 58

Choice "c" is correct. If a customer engages in a transaction that is not the type of transaction that the bank would normally expect the customer to engage in, the bank must file a suspicious activity report and must not inform the customer that the report was filed. Therefore, choice “d” is incorrect. Choice "a" is incorrect. If a customer engages in a transaction that is not the type of transaction that the bank would normally expect the customer to engage in, the bank has a duty to file a suspicious activity report. Choice "d" is incorrect. If a customer engages in a transaction that is not the type of transaction that the bank would normally expect the customer to engage in and the bank files a suspicious activity report, the bank must inform its board of directors.

Answer 59

Choice "c" is correct. Under the BSA, a financial institution must make a record of the identity of anyone purchasing monetary instruments (such as money orders) of between $3,000 and $10,000, inclusive. The record must be kept for at least five years, but no filing of a report is required for such sales. Choice "d" is incorrect. A suspicious activity report must be filed under the BSA whenever a customer enters into a suspicious transaction (e.g., one that the bank would not expect the customer to engage in based on the nature of the customer’s business, previous dealings, etc.). Choice "a" is incorrect. The BSA requires a currency transaction report to be filed whenever a person engages in a transaction in currency exceeding $10,000. Choice "b" is incorrect. The BSA requires a report of international transportation of currency or monetary instruments to be filed whenever a person transports or receives currency or certain monetary instruments to or from a foreign country.

Answer 60

Choice "c" is correct. By definition, an "illegal per se" act is one that is inherently illegal and without legal justification. Choice "d" is incorrect. Tying arrangements may be illegal per se when the seller has considerable economic power in the tying product. Choice "a" is incorrect. The Federal Trade Commission Act does not provide for criminal penalties. Additionally, it provides for action by the FTC, not the Justice Department. Choice "b" is incorrect. Tying arrangements are not between competitors and may be illegal per se.

Answer 61

Choice "c" is correct. Section 7 of Clayton prohibits the merger or acquisition of a company if the effect is to substantially lessen competition. It allows the Department of Justice to proscribe mergers and acquisitions in their incipiency, before they develop monopoly power. Choice "b" is incorrect. The Sherman Act prohibits restraints on trade and monopolies. Under the Sherman Act, a stock merger could be opposed if it could be demonstrated that the effect unreasonably restrained trade. Under the Clayton Act, the government does not have to wait until the merger has that effect, the merger can be opposed at the outset. Choice "a" is incorrect. Only the Sherman Act provides for criminal penalties, the Clayton Act does not. Choice "d" is incorrect. As indicated above, a merger could violate both the Sherman Act and the Clayton Act. Thus, the Clayton Act does not provide for exclusive jurisdiction.

Answer 62

Choice "b" is correct. By its very nature a patent grants a limited monopoly to the patent holder. The patent holder may sell the item at whatever price it desires. Choice "a" is incorrect. Requiring retailers to sell only Loop's products and not competitors would violate the exclusive dealing provisions of the Clayton Act if the effect were to substantially lessen competition. Choice "d" is incorrect. Requiring retailers to take stipulated quantities of its other products would violate the tying arrangements section of the Sherman and Clayton Acts if the effect were to substantially lessen competition. Choice "c" is incorrect. Requiring retailers to sell at not less than a stated price is a form of vertical price fixing and could be a violation of the Sherman Act.

Answer 63

Choice "a" is correct. This is an agreement between competitors to fix prices (horizontal price fixing and/or to allocate the market). Horizontal price fixing (i.e., agreements among competitors to fix prices) and/or market allocations are per se violations of the Sherman Act. Choice "d" is incorrect. Horizontal price fixing (i.e., agreements among competitors to fix prices) and/or market allocations are per se violations of the Sherman Act. They are not judged under the rule of reason. Choices "c" and "b" are incorrect. This activity is illegal, not legal.

Answer 64

Choice "d" is correct. In a conglomerate merger, a firm acquires a company in a completely different business (i.e., a merger between firms that neither compete nor have a customer/supplier relationship). Choice "c" is incorrect. The government does not have to establish an actual restraint on competition. They have been challenged when it is highly likely that one of the firms will enter the market of the other. Choice "a" is incorrect. The government does not have to prove an intent to monopolize. Choice "b" is incorrect. The government does not have to prove some additional form of anticompetitive behavior. They have been challenged when it is highly likely that one of the firms will enter the market of the other or where the merged company would become substantially large. No additional anticompetitive behavior is required.

Answer 65

Choice "d" is correct. Monopoly power exists when a firm has sufficient market power to control prices or exclude competition. Choice "c" is incorrect. The government does not have to prove Variable is the sole source of a significant portion of the market. Choice "b" is incorrect. Companies with market shares of between 40% and 70% may or may not be monopolies. Companies with a market share of 70% or more are generally considered a monopoly. 75% market share is not required. Choice "a" is incorrect. The Sherman Act has two prominent sections. Section 1 prohibits contracts, combinations and conspiracies that restrain trade. Section 2 prohibits monopolies and attempts to monopolize. Variable can violate section 2 without entering into a contract or conspiracy in restraint of trade.

Answer 66

Choice "a" is correct. Since Mace became insolvent, the "Failing Company" exception applies. Under this exception, if the acquired firm is in danger of becoming insolvent and no other purchasers are interested in acquiring it, a merger can be lawful even if the effect is to lessen competition. Choices "c", "b", and "d" are incorrect. All of these choices indicated there was a violation of antitrust law.

Answer 67

Choice "d" is correct. A tying arrangement is one in which a seller requires the buyer to purchase one product to obtain another. Choice "c" is incorrect. In an exclusive dealing contract a seller of goods requires the buyer to promise not to deal in goods of a competitor. Choice "a" is incorrect. A horizontal merger occurs when one competitor merges with another competitor to establish market power or restrict competition. Choice "b" is incorrect. Vertical restraints are agreements between industry players that are on different marketing levels.

Answer 68

Choice "b" is correct. The carrier may deliver goods to any party designated by the holder of the bill of lading. If a carrier delivers goods to a party who claims to be entitled to them under the terms of a missing negotiable bill of lading, the common carrier is liable to any injured party if the delivery of goods results in injury.

Answer 69

Choice "d" is correct. A common carrier may limit liability within the contract if it is reasonable and agreed to. Choice "c" is incorrect. Common carriers are generally held to be insurers of the goods during delivery and are liable for vandalism. Choice "a" is incorrect. Because common carriers are generally held to be insurers of the goods they deliver, they are liable for damages arising from power outages. Choice "b" is incorrect. Because common carriers are generally held to be insurers of the goods they carry, they are liable for damages to goods in transit, even if the damage was caused by the willful act of a third party.

Answer 70

Choice "b" is correct. Under the UCC, a document of title must include a statement of whether the goods received will be delivered to the bearer, to a specified person, or to a specified person or that person's order, and the document must include the location of the goods. This is so that the warehouse operator knows what is required to release the goods, and so that the holder of the receipt knows where the goods are located.

Answer 71

Choice "d" is correct. A warehouseman has a duty to use reasonable care with respect to goods stored. Negligence breaches this duty, and makes the warehouseman liable for resulting losses. UCC 7-204 Choice "b" is incorrect. A warehouseman must use reasonable care with respect to stored goods; he is not strictly liable. Choice "a" is incorrect. A warehouseman must use reasonable care with respect to stored goods whether the goods are stored pursuant to a negotiable or nonnegotiable warehouse receipt. Choice "c" is incorrect. A warehouseman must use ordinary care with respect to stored goods. Thus, he can be liable for ordinary negligence; gross negligence need not be proved.

Answer 72

Choice "c" is correct. Since the bill of lading is deliverable to bearer, it may be negotiated by delivery alone; no endorsement is necessary. UCC 7-104 Choice "d" is incorrect. The carrier does have a right to sell the goods to recover unpaid shipping charges. UCC 7-308. Choice "b" is incorrect. The carrier must deliver the goods to the person who has the bill of lading. Since Major possesses the bill, the carrier would be liable for delivery to anyone else. Choice "a" is incorrect. The carrier has no right to require endorsement of a bearer bill of lading.

Answer 73

Choice "a" is correct. A bill of lading is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person. UCC 7-104 Choice "b" is incorrect. An altered bill of lading is enforceable according to its original terms. UCC 7-208 Choice "d" is incorrect. The carrier issues a bill of lading; the consignee is the person who is to receive the goods. Choice "c" is incorrect. No signature is necessary for a bill of lading to be negotiable. UCC 7-104

Answer 74

Choice "a" is correct. Under the Documents of Title Article, a warehouser is liable for loss of stored goods on a showing of ordinary negligence. Choice "d" is incorrect. Strict liability means liability regardless of fault. A warehouser is not strictly liable for loss of stored goods. At least negligence must be shown. Choice "b" is incorrect. Although proof of gross negligence would be sufficient to hold a warehouser liable for the loss of goods stored, proof of gross negligence is not necessary. A person can recover on the lesser showing of ordinary negligence. Choice "c" is incorrect. Although proof of deliberate destruction or theft would be sufficient to hold a warehouser liable for the loss of goods stored, such proof is not necessary. A person can recover on the lesser showing of ordinary negligence.

Answer 75

Choice "c" is correct. To be negotiable, a document of title must be deliverable to bearer or to the order of a named person. Choice "b" is incorrect. The issuer of a document of title is the bailee (one who holds goods belonging to another). Choice "a" is incorrect. Like commercial paper under Article 3, whether an instrument is negotiable is determined by the contents of the face of the instrument; endorsements can neither create nor destroy negotiability. Choice "d" is incorrect. Documents of title are governed by Article 7 and not by Article 3.

Answer 76

Choice "a" is correct. Under a nonnegotiable bill of lading, a carrier who accepts goods for shipment must deliver the goods to the consignee of the bill of lading. Choices "d", "c", and "b" are incorrect, per the above.

Answer 77

Choice "d" is correct. A bill of lading that provides that the goods are to be delivered "to the order of a named payee" is treated as a negotiable document of title. The carrier must deliver the goods to the party named (Ajax) or one who holds the instrument properly endorsed by Ajax. Choice "b" is incorrect. The carrier's lien continues to be effective against the purchaser of the bill of lading. Choice "c" is incorrect. The carrier may limit its liability in the bill of lading and usually does. Otherwise the carrier is an "insurer". Choice "a" is incorrect. The bill of lading is a negotiable document of title. The carrier has potential liability beyond Ajax.

Answer 78

Choice "a" is correct. Under the UCC a warehouse receipt is negotiable if, by its terms, the goods are to be delivered to bearer or order. (Note: The law is similar to the law of negotiable instruments.) Choice "b" is incorrect. A warehouse receipt can be negotiable even if it contains a contractual limitation on the warehouser's liability. Such a limitation does not affect the instrument's negotiability. Choice "c" is incorrect. A warehouse receipt cannot qualify as both a negotiable warehouse receipt and negotiable commercial paper where the instrument is payable either in cash or by the delivery of goods. To be negotiable, commercial paper must be payable only in money. Choice "d" is incorrect. The UCC does not require that warehouse receipts be issued only by a bonded and licensed warehouser. (Watch out for restrictive words such as "only," "never," and all inclusive terms such as "always.")

Answer 79

Choice "d" is correct. Burke's endorsement of Grove's name constitutes a forgery, which is a real defense. The rules governing the negotiability of warehouse receipts are similar to those governing other forms of negotiable instruments. The defenses, both real and personal, are therefore similar. Forgery is a real defense. Grove Co. is not liable because the endorsement is a forgery. Choice "a" is incorrect. No such rule! Choice "c" is incorrect. The warehouse receipts were order paper and required Grove's genuine signature for valid negotiation. Burke's forgery was ineffective to transfer the instrument. Choice "b" is incorrect. The warehouse receipts were order paper and required Grove's genuine signature for valid negotiation. Burke's forgery was ineffective to transfer the instrument. Lack of knowledge does not protect the holder from the defense of forgery.

Answer 80

Choice "d" is correct. The holder of a duly negotiated document is like a holder in due course, and the requirements for attaining that status are similar. A document can be negotiated by mere endorsement or delivery, but neither alone is sufficient to make the instrument duly negotiated and neither is mere payment of money. Thus, "b", "a", and "c" are incorrect.

Answer 81

Choice "c" is correct. The carrier may deliver goods to any party designated by the holder of the bill of lading. If a carrier delivers goods to a party who claims to be entitled to them under the terms of a missing negotiable bill of lading, the common carrier is liable to any injured party if delivery of the goods results in an injury.

Answer 82

Choice "c" is correct. A warehouse receipt is the proper document of title for items held in storage. Choice "d" is incorrect. A bill of lading is the proper document of title for items being transported by a carrier. Choice "a" is incorrect. An appraisal is a document that represents fair market value of an item. It is not a document of title. Choice "b" is incorrect. A receipt for purpose is not a document of title.

Answer 83

Choice "c" is correct. The Orderly Liquidation Authority extended to the Secretary of the Treasury covers only financial institutions, including insurance companies, banks, and securities companies, but it does not extend to manufacturing companies.

Answer 84

Choice "b" is correct. Under the Volker Rule, a banking entity may not take an ownership interest in a hedge fund or private equity fund greater than 3%. The aim of this rule is to limit the amount of speculative investments on the balance sheets of large banks.

Answer 85

Choice "c" is correct. The Investor Protection and Securities Reform Act of 2010 does not cover liquidation of financial institutions, which is covered under Title II, Orderly Liquidation Authority. Choice "d" is incorrect. The Investor Protection and Securities Reform Act includes regulations of nationally recognized statistical rating organizations (requiring them to implement and adhere to policies, procedures, and methodologies for determining credit ratings). Choice "a" is incorrect. The Investor Protection and Securities Reform Act includes regulations of SEC registered broker-dealers (setting a best interests of the client standard for advice given to a client). Choice "b" is incorrect. The Investor Protection and Securities Reform Act includes regulations of approval procedures for executive pay at large publicly held corporations (requiring proxy or consent statements to include at least once every three years a resolution for approval of executive compensation).

Answer 86

Choice "d" is correct. Under Dodd-Frank, before liquidating a financial institution, the FDIC must determine that liquidation is necessary for U.S. financial stability. Choice "a" is incorrect. The Orderly Liquidation Fund is managed by the FDIC and is used to cover liquidation of financial companies not previously covered by the FDIC or SIPC. However, the FDIC does not have to determine that there are not sufficient funds in the fund before liquidating a financial institution. Choice "b" is incorrect. Under Dodd-Frank, special rules apply to financial institutions with at least $50 billion in assets, but the FDIC's liquidation jurisdiction is not limited to such institutions. Choice "c" is incorrect. Under the Orderly Liquidation Authority of Title II, the Secretary of the Treasury must consider the effect that placing a financial institution into receivership would have on financial stability for low income, minority, or underserved communities, but nothing prohibits liquidating a financial institution just because it will have an adverse effect on such communities.

Answer 87

Choice "a" is correct. The limited liability of a shareholder in a closely held corporation may be challenged where the shareholder undercapitalized the corporation when it was formed. Courts can "pierce the corporate veil." Choice "c" is incorrect. Forming a corporation to limit personal liability is a perfectly valid reason for electing the corporate form of doing business. Choice "d" is incorrect. The shareholder may sell property to the corporation. Choice "b" is incorrect. Shareholders may serve as corporate officers, directors, or employees.

Answer 88

Choice "c" is correct. An LLP does not pay taxes on its earnings. Instead, the profits and losses flow through to the partners as in a general partnership. The LLP files an informational tax return like that of a general partnership. The partners may agree to have the entity managed by one or more of the partners. A partner may be another entity. Choice "a" is incorrect. A proprietorship by definition has only one owner, not three owners. Choice "b" is incorrect. While an S corporation allows for the same treatment of its earnings and distributions as in the facts, it is prohibited from having another company as an owner. Choice "d" is incorrect. A C corporation pays its own taxes on its earnings, and any distributions to its shareholders are again taxed at the shareholder level (known as "double taxation").

Answer 89

Choice "d" is correct. Both corporations must give shareholders notice and a summary of the merger plan. Choice "a" is incorrect. A merger plan need only be approved by a majority of the shareholders, not by all shareholders. Choice "c" is incorrect. The merger plan needs to be approved only by a majority of each board of directors of the corporations. Choice "b" is incorrect. The absorbed corporation ceases to exist; its articles need not be amended.

Answer 90

Choice "c" is correct. A corporation may indemnify its officers for liabilities incurred in a suit by stockholders, especially if the officer prevails. Choice "b" is incorrect. There is no restriction against serving as both a director and an officer. Choice "d" is incorrect. The RMBCA provides that officers are to be appointed by the board unless the bylaws provide otherwise. Choice "a" is incorrect. There is no requirement that an officer own stock in the corporation in which he or she serves.

Answer 91

Choice "c" is correct. A domestic corporation is one created under the laws of a given state. A foreign corporation is a corporation created under the laws of another state. A foreign corporation must obtain a certificate of authority from each state in which it does intrastate business. Maintaining an office in State B is a clear indication that Case was "doing business" in State B. Choices "b", "d", and "a" are incorrect because maintaining a bank account, collecting debts, and hiring employees who live within a state are not considered to be "doing business" within the state.

Answer 92

Choice "b" is correct. Rule: A tender offer is a general invitation by a bidder to the shareholders of a target company to tender their shares to the bidder at a specified price during a specified time. A target of a takeover may ward off a tender offer by offering to repurchase shares from its shareholders. If a takeover will violate federal antitrust law, a court will enjoin the takeover.

Answer 93

Choice "b" is correct. A parent corporation owning 90% or more of a subsidiary may merge the subsidiary (short form merger) into the parent without the approval of the shareholders of either corporation or the approval of the subsidiary's board. Choices "a", "c", and "d" all require at least one of the corporations to follow the general procedure for fundamental corporate changes (i.e., board resolution notice, approval by majority shares, and filing).

Answer 94

Choice "d" is correct. Unless the articles or operating agreement provides otherwise, all members of the LLC have a right to participate in management. A member of a limited liability company has the most management rights of any of the parties listed. A minority shareholder in a corporation has no management rights (and neither does a majority shareholder). A limited partner has no day-to-day management rights but may have some rights in extraordinary circumstances. It is unclear what a limited partner in a general partnership would even be; the existence of a limited partner would make a partnership a limited partnership and not a general partnership. Choice "c" is incorrect. Stockholders have very limited rights to run the corporation. They generally only have the right to elect directors and to vote on fundamental changes in the corporation. Such fundamental changes would include dissolutions, amendments to the articles, mergers, consolidations, compulsory share exchanges, and sale of substantially all of the corporation's assets. Choice "a" is incorrect. There are no limited partners in a general partnership. There are only general partners. Since there are no limited partners, there are no management rights for limited partners. Choice "b" is incorrect. Limited partners in a limited partnership have very limited rights to participate in the management of the business. In fact, if they do participate in management, they face potential liability to those who thought they were a general partner (i.e., if a limited partner becomes involved in day-to-day management is some way (participating in control), she may be treated as a general partner and lose her limited liability).

Answer 95

Choice "a" is correct. Under the Revised Model Business Corporation act, a corporation's initial bylaws may be adopted by either the incorporators or the board of directors. Choices "d" and "b" are incorrect, because the corporation's bylaws are a separate document not included in the corporation's articles of incorporation. Choice "c" is incorrect, because under the Revised Model Business Corporation Act, a corporation's initial bylaws may be adopted by either the incorporators or the board of directors.

Answer 96

Choice "a" is correct. All members in a limited liability company have limited liability. Unless they choose otherwise, all members of a limited liability company may participate in management. A limited liability company is dissolved upon the death, retirement, resignation, bankruptcy, etc., of a member. Choice "d" is incorrect. A limited partnership must have at least 1 general partner and 1 limited partner. The general partner has unlimited liability for all limited partnership debts. Additionally, limited partners have a limited right to manage. Choice "b" is incorrect because general partners in a general partnership have unlimited liability. Choice "c" is incorrect on two counts. First, although shareholders are the owners of the corporation, they generally have no power to run the corporation. That is done by the board and the officers. Second, death, withdrawal or bankruptcy of a stockholder does not dissolve a corporation.

Answer 97

Choice "c" is correct. The objectives of the two individuals are to limit liability, avoid double taxation, and be active in management. As limited liability company members, they would have no liability beyond their investment. With a limited liability company, the entity would be taxed like a partnership (thus no double taxation) unless they chose otherwise. As limited liability company members, they would have the right to participate in management decisions of the LLC. Choice "b" is incorrect because a C corporation is subject to double taxation. Choice "a" is incorrect because in a limited partnership there are both limited and general partners. The general partners have the right to manage, but have unlimited liability. The limited partners have no liability beyond their investment, but have no right to manage or control. Thus, they cannot have both limited liability and the right to manage in a limited partnership. Choice "d" is incorrect because a general partner in a general partnership has unlimited liability.

Answer 98

Choice "b" is correct. The articles must set out the corporation's authorized shares. Choice "a" is incorrect. Quorum requirements, if stated at all, usually are in the bylaws; they need not be included in the articles of incorporation. Choice "d" is incorrect. The articles need not include the names of stockholders. Choice "c" is incorrect. The RMBCA has eliminated the concept of par value and so does not have a requirement that par value be established in the articles.

Answer 99

Choice "d" is correct. A merger can be effected by giving some parties cash or property; not everyone need receive voting shares. Choice "a" is incorrect. The merger must be pursuant to a formal plan. Choice "b" is incorrect. An affirmative vote by the holders of each corporation's voting shares is required. Choice "c" is incorrect. A plan of merger must be approved by the boards of the merging corporations.

Answer 100

Choice "a" is correct. A limited partnership best reflects the terms of the parties' agreement. A limited partnership has one or more general partners and one or more limited partners. The general partners are personally liable for partnership obligations and run the business (such as Betty and Jim agreed). A limited partner does not have personal liability for partnership obligations and does not take part in management; however, limited partners have a right to inspect partnership books and records relevant to their interest. Thus, a limited partnership has the attributes that Harry agreed to. Finally, all partners must unanimously consent to a transfer of an ownership interest in a limited partnership, as the parties agreed here. Thus, a limited partnership best reflects the agreement of the parties.

Answer 101

Choice "c" is correct. Both I and II. Rule: In order to obtain a corporate charter, a for-profit corporation must include in its articles of incorporation the name of the corporation and a provision for the authorization of voting stock. In addition, the articles of incorporation must include the names of the incorporators and the name and address of the registered agent.

Answer 102

Choice "b" is correct. Generally, a corporation is treated as an entity distinct from its shareholders and shareholders are not liable for the corporation's debts. However, where the shareholders do not treat the corporation as a distinct entity, such as where they commingle their personal funds with the corporation's funds, courts are likely to ignore the corporate form as well.

Answer 103

Choice "b" is correct. Amendment of the articles of incorporation, albeit proposed by the directors, cannot usually be effected without the affirmative vote of the shareholders. Choice "a" is incorrect. The directors ordinarily have the power to repeal bylaws unless the articles or the specific bylaw to be repealed provides otherwise. Choice "c" is incorrect. The directors have the power to declare dividends at their discretion as long as the dividends do not violate any statute, article provision, bylaw, or contract with a creditor. Choice "d" is incorrect. Although it seems like there would be a conflict of interest, directors do have the power to set their own compensation, limited only by the fiduciary duties owed to the corporation (e.g., the directors cannot set salaries so high as to constitute waste).

Answer 104

Choice "d" is correct. A stock dividend means that the corporation issues its existing shareholders more stock. In essence, the corporation is merely diluting the proportional ownership interest of existing shares. This has no effect on the corporation's earnings and profits for federal income tax purposes. Choice "b" is incorrect. There is no requirement that stock dividends be registered with the SEC because no "sale" is involved. Choice "c" is incorrect. The receipt of a stock dividend is not the recognition of income. It merely divides the stockholders' current ownership interests into more pieces; it does not increase proportional ownership interest in the corporation. Choice "a" is incorrect. The issuance of dividends, including stock dividends, is at the directors' discretion; shareholders do not vote on dividends.

Answer 105

Choice "d" is correct. Cumulative preferred dividends are dividends that must be paid before any dividend can be paid to holders of non-preferred shares. The right to the dividend accumulates if it is not paid in a particular year. Choice "c" is incorrect. There is no right to convert preferred shares into common stock unless that right is specifically granted. Choice "b" is incorrect. Preferred stock need not have voting rights. Choice "a" is incorrect. Preferred dividends are not guaranteed. They must be paid before any common shareholder can be paid a dividend, but no dividend might ever be paid.

Answer 106

Rule: Shareholders who are dissatisfied with the terms of a merger, consolidation or sale of assets are permitted to compel the corporation to buy their shares at fair market value. This is known as the right of appraisal or the dissenting right.

Answer 107

Choice "c" is correct. A derivative action is an action by a stockholder in the name of the corporation to recover damages or to seek some other remedy on behalf of the corporation when the corporation does not enforce its own rights. Such actions are often brought when the directors or officers have breached their duty to the corporation and have refused to sue themselves. An ultra vires act is an act outside of a director's or an officer's scope of authority and thus is a breach of duty to the corporation. Choices "a", "b", and "d" are incorrect, because these would all be causes of action against the corporate directors or officers on behalf of the stockholder to recover damages or seek some other remedy against the corporate directors or officers on behalf of the stockholder, not on behalf of the corporation.

Answer 108

Rule: Preemptive rights do not provide a shareholder with the right to a proportionate share of corporate assets on dissolution.

Answer 109

Choice "c" is correct. Stockholders have a right to inspect certain corporate records. Choice "b" is incorrect. Declaration of dividends is within the directors' discretion. There is no absolute right of shareholders to receive annual dividends. Choice "a" is incorrect. Officers are appointed by the directors; they are not elected by the shareholders. Choice "d" is incorrect. Shareholders do not have a right to force the corporation to issue a new class of stock.

Answer 110

Choice "c" is correct. In a short form merger (one between a parent and a subsidiary 90% of which is owned by the parent), the subsidiary's shareholders have a right to dissent and take advantage of the appraisal remedy. Choice "b" is incorrect. The subsidiary's board is not required to take any action in a short-form merger. Choice "a" is incorrect. The parent corporation's shareholders have no right to approve or disapprove a short-form merger. Choice "d" is incorrect. The parent corporation's shareholders have no right to dissent to a short-form merger.

Answer 111

Choice "b" is correct. As a director of the corporation Davis may rely on information provided to him/her by a corporate officer. A corporate director is under no obligation to verify information given to him by management (corporate officers). Choice "a" is incorrect. A director is not entitled to serve on the board of a competing business. Doing so would be a breach of fiduciary duty. Choice "c" is incorrect. A director may not take sole advantage of a business opportunity that would benefit the corporation. Doing so would be a breach of fiduciary duty. Choice "d" is incorrect. A director may not unilaterally grant a corporate loan to one of the corporation's shareholders. Directors generally must act through a majority vote at a directors' meeting.

Answer 112

Choice "d" is correct. A joint venture is like a partnership. A partnership or joint venture can be formed without filing any documents with the state. Choice "a" is incorrect. Formation of a limited partnership requires the filing of a certificate of limited partnership with the state. Choice "b" is incorrect. A limited liability company may be formed only by filing articles of organization with the state. Choice "c" is incorrect. A corporation, including a Subchapter S corporation, may be formed only by filing articles of incorporation with the state.

Answer 113

Choice "a" is correct. If a corporation enters into a contract and a director has a conflict of interest in the transaction, the contract is voidable unless the director makes full disclosure of all of the facts to the disinterested directors or the shareholders, who then approve the transaction, or the director can prove that the transaction was fair to the corporation. The stationery purchase was fair to Quick, since it was purchased at a below-market price. Thus, the contract is valid. Choice "b" is incorrect. A director's self-dealing does not automatically make a contract void. The contract can be upheld if it was fair. Choice "c" is incorrect. A director's self-dealing does not automatically make a contract void. The contract can be upheld if it was fair. Choice "d" is incorrect. If a corporation enters into a contract and a director has a conflict of interest in the transaction, the contract is voidable unless the director makes full disclosure of all of the facts to the disinterested directors or shareholders, who then approve the transaction, or the director can prove that the transaction was fair. Mere disclosure after the contract was adopted does not automatically render the contract valid.

Answer 114

Choice "a" is correct. In general, a shareholder has a right to inspect the books and records of a corporation for purposes related to the stockholder's interest in the corporation. This right will be denied where the purpose is not reasonably related to their status as a shareholder. Obtaining stockholder names to create a retail mailing list is a personal purpose. Choices "d", "b", and "c" are incorrect. The following reasons for shareholders to inspect the books of the corporation are reasonably related to their status as shareholders: d. To commence a stockholder's derivative suit. b. To solicit stockholders to vote for a change in the board of directors. c. To investigate possible management misconduct.

Answer 115

Choice "b" is correct. A promoter is personally liable for the contracts he or she enters into prior to incorporation. A corporation may become liable by adoption of the contract, and through the process of novation (an agreement among all of the parties), the promoter may be released from contractual obligations. Choice "c" is incorrect. An assignment is a transfer of a contractual duty to perform. After the transfer, both the assignor and assignee may be held liable for performance. The assignor is not, thereby, released from liability. Choice "a" is incorrect. A delegation is a transfer of a contractual duty to perform. Both the delegor and delegee are liable to perform after the assignment; it does not release the promoter from liability. Choice "d" is incorrect. An accord is an agreement to change the performance due under a contract. Once the new terms are performed or satisfied, the original contract terms are terminated. Such an agreement does not automatically result in release of a promoter.

Answer 116

Choice "b" is correct. Illegal dividends from an insolvent company must be repaid to the corporation for the benefit of the creditors. A shareholder who knowingly accepts an illegal dividend is liable to return it. Choices "a" and "d" are incorrect. If a director does not breach any duties in approving a distribution, the director is protected by the business judgment rule and is not liable for the distribution whether the corporation is solvent or insolvent. Choice "c" is incorrect. A shareholder of a solvent corporation who unknowingly accepts an illegal distribution is not obligated to repay the distribution.

Answer 117

Choice "b" is correct. Under the common law and the Revised Uniform Partnership Act there is no requirement for a general partnership to file with the state and obtain state approval. All that is necessary to form a general partnership is: (i) an agreement (ii) between at least two competent parties (iii) to carry on as co-owners of a business for profit. Choices "c", "d", and "a" are all incorrect because a limited liability partnership, a limited liability company and a corporation are all required to file with and be approved by the state.

Answer 118

Choice "d" is correct. Where an agent enters into a contract on behalf of a principal and discloses the existence and identity of the principal and acts with authority, the principal is liable and the agent is not liable. Here, Jones signed the contract with an indication that he was signing for the corporation. The president of a corporation is an agent of the corporation and has apparent authority to enter contracts that appear to be within the ordinary scope of the corporation's business. The restaurant repairs here appear to be with the scope of Food Corp.'s business. Therefore, Food Corp. will be bound because Jones had at least apparent authority.

Answer 119

Choice "b" is correct. Either entity's shareholders may contribute property to the corporations without being taxed and may contribute such property as an exchange for stock as appraised by the directors. Choice "c" is incorrect. An S corporation may not have more than 100 shareholders, although a C corporation may have as many shareholders as desired. Choice "a" is incorrect. Only the C corporation is subject to the double taxation disadvantage. Choice "d" is incorrect. Only an S corporation is prohibited from having foreign country shareholders.

Answer 120

Choice "b" is correct. The business judgment rule applies to officers as well as directors, who in their capacity, act in a manner the officer believes to be in the best interest of the corporation, and with the care an ordinarily prudent person in a like position would exercise. If the standards of the business judgment rule are met, the officer is not liable to the company for resulting damages.

Answer 121

Choice "d" is correct. Common shares represent an investment in the corporation whereby the common shareholder becomes a part owner of the corporation. A debt holder is a creditor of the corporation. The corporation has borrowed money from the debt holder and promises to repay at a later date. A debt holder is not an owner of the corporation. Choice "b" is incorrect. Unlike a common shareholder, a debt holder does not have an ownership interest in the corporation. Choice "c" is incorrect. Common shares do not have a fixed maturity date, but debt securities do. This answer is backwards. Choice "a" is incorrect. Upon liquidation of a corporation, the creditors of the corporation are paid first. After the creditors are paid, the shareholders are paid on a pro rata basis. Thus, debt holders (creditors) have a higher priority than stockholders.

Answer 122

Choice "d" is correct. A Subchapter C corporation is taxed as an entity for income tax purposes. Additionally, distributions made to stockholders are treated as taxable income to the stockholders. [Note that this type of corporation is more often called a C corporation instead of a Subchapter C corporation.] Choice "c" is incorrect. A general partnership is not taxed as a separate entity for income tax purposes. Choice "b" is incorrect. An LLC is not taxed as a separate entity for income tax purposes unless the LLC specifically elects to be taxed like a corporation. [Of course, the word "always" in the question takes care of that.] Choice "a" is incorrect. A Subchapter S corporation is taxed as a partnership. Thus, it is not taxed as a separate entity for income tax purposes. [Note that this type of corporation is more often called an S corporation instead of a Subchapter S corporation.

Answer 123

Choice "b" is correct. A merger involves one corporation joining with another corporation. The surviving corporation has all of the rights and liabilities of the merged corporation. Thus, the acquiring corporation automatically becomes liable for all obligations of the acquired corporation. Choice "d" is incorrect. A leveraged buyout is a strategy involving the acquisition of another corporation using a significant amount of borrowed money (bonds or loans). Often, the assets of the corporation being acquired are used as collateral for the loans (in addition to the assets of the acquiring corporation). The acquiring corporation does not automatically become liable for all (or any) obligations of the acquired corporation if it merely acquires another corporation's assets. Choice "a" is incorrect. An acquisition of stock for debt securities does not make the acquiring corporation liable for the obligations of the acquired corporation. The acquiring corporation has simply purchased stock. In an acquisition of stock for debt securities, the acquired corporation becomes a subsidiary of the acquiring corporation and the acquired corporation remains a separate entity liable for its own obligations. Choice "c" is incorrect. A cash tender offer is an offer to purchase a corporation's stock directly from its shareholders at a specified price for a specified period of time. In a cash tender offer, the acquiring corporation does not automatically become liable for all obligations of the acquired corporation. In fact, if there is only an offer, there is no transaction at all.

Answer 124

Choice "a" is clearly the best answer here, although it is not completely correct. Directors owe their corporation a duty of loyalty and must act solely in the best interests of the corporation. If a corporation enters into a contract and a director has a conflict of interest in the transaction, the contract is voidable unless the director makes full disclosure of all of the facts to the disinterested directors or the shareholders who then approve the transaction, or the transaction is fair. Thus, disclosing the interest to the independent members and refraining from voting is one way to ensure the validity of a contract between a director and his or her corporation, but it technically is not required as disclosure to and approval by the shareholders also ensures validity, as does making sure the transaction is fair to the corporation. Nevertheless, the other choices are clearly incorrect - making this the best choice.

Answer 125

Choice "d" is correct. Stock dividends are dividends in the corporation's own authorized but unissued shares given to existing shareholders on account of their shares. Choice "b" is incorrect. Despite the fact that a stock dividend in a corporation with only one class of par value stock does not change a shareholder's proportional ownership or affect capitalization of the corporation, nothing prohibits a corporation, even a corporation with only one class of par value stock, from declaring a stock dividend. Choice "c" is incorrect. With a stock dividend, when there is only one class of stock, each shareholder receives a proportionate amount of stock, resulting in each shareholder owning the same percentage of the corporation after the dividend is issued as he or she owned before the dividend was issued. Choice "a" is incorrect. When a stock dividend is issued in a corporation's own stock, no assets are distributed and the solvency of the corporation remains the same.

Answer 126

Choice "c" is correct. Shareholders have the right to elect and remove directors through the voting process. Choice "b" is incorrect. Officers are selected by the directors rather than by the shareholders. Choice "a" is incorrect. Because officers are selected by the directors, generally they may be removed only by the directors. Choice "d" is incorrect. Dividends generally can be declared only by the directors; shareholders usually do not have any right to declare or vote on a distribution.

Answer 127

Choice "c" is correct. A corporation may elect to be taxed like a partnership under Subchapter S only if it has only one class of stock. Choice "a" is incorrect. A corporation can elect S corporation status only if its shareholders are individuals, estates, or certain types of trusts. Choice "b" is incorrect. Foreign shareholders generally are prohibited in an S corporation. Choice "d" is incorrect. An S corporation can have up to 100 shareholders, but it may have fewer.

Answer 128

Choice "c" is correct. The bylaws usually contain the rules for running the corporation. Choices "d" and "b" are incorrect. These are possible choices, but not as good an answer as "c". A corporation's articles of incorporation (called a charter in a few states) must set out certain information relevant to formation of the corporation, but it may include any other information that it is not illegal. However, usually details about intracorporate power are set out in bylaws rather than in the articles or charter. Choice "a" is incorrect. A proxy statement is a request to shareholders to allow their shares to be voted by a specified person in a specified way. It has nothing to do with a corporate president's authority.

Answer 129

Choice "d" is correct. In cumulative voting, each share is entitled to one vote for each director position that is being filled and the shareholders may cast the votes in any way, including casting all for a single candidate. This helps minority shareholders gain representation on the board. Thus, choice "c" is incorrect. Choice "b" is incorrect. Cumulative voting does not insure the continuance of incumbent directors. Choice "a" is incorrect. Staggering election of the board into three classes (rather than cumulative voting) would facilitate the election of 1/3 of the board each year.

Answer 130

Choice "c" is correct. In a subchapter S corporation the entity is taxed liked a partnership, but the shareholders still enjoy the limited liability of the corporate form. Choice "a" is incorrect because a C corporation is taxed at the federal level. Choice "b" is incorrect because a general partner in a partnership has unlimited liability. Choice "d" is incorrect because a general partner in a limited partnership also has unlimited liability.

Answer 131

Choice "d" is correct because, technically, dividends paid in stock are not a distribution. Stock dividends are dividends in the corporation's own authorized but unissued shares. No assets are distributed. The stockholder's wealth and percentage of ownership are not increased. A stock dividend has no affect on earnings and profits for federal income tax purposes. Choice "b" is incorrect because a cash dividend is obviously a distribution. Choice "a" is incorrect. A property dividend is a distribution of earnings in the form of property. Choice "c" is incorrect. A liquidating dividend is a dividend that is paid by the corporation to shareholders from capital rather than retained earnings. As such, it is clearly a distribution.

Answer 132

Choice "d" is correct. When the "corporate veil is pierced," courts disregard the corporate form and hold shareholders, officers or directors personally liable. Courts generally will pierce the corporate veil for commingling of funds, inadequate capitalization at time of formation or fraud. Choice "c" is incorrect. "Piercing the corporate veil" does not entail holding a corporation liable for the acts of directors; it entails holding a shareholder, officer or director liable for obligations of the corporation. Choice "a" is incorrect because "piercing the corporate veil" does not entail a corporation losing tax-exempt status. Choice "b" is incorrect because "piercing the corporate veil" does not entail holding a corporation liable for the acts of nonofficer employees; it entails holding a shareholder, officer or director liable for obligations of the corporation.

Answer 133

Choice "b" is correct. One of the main advantages of a corporation is that stockholders, directors and officers generally are not personally liable for the obligations of the corporation. Generally, only the corporation itself can be held liable. Choice "a" is incorrect because a sole proprietor is personally liable for all obligations of the business. Choice "d" is incorrect because all general partners have unlimited personal liability. Additionally, Eaton could not be the sole owner in a general partnership; he would have to share ownership with other partners. Choice "c" is incorrect because in a limited partnership there must be at least one limited and one general partner. The general partner in a limited partnership has unlimited liability. Eaton would not choose to be a limited partner because then Eaton would have no right to manage and control the business; he would have to give up control to a general partner.

Answer 134

Choice "d" is correct. I is a correct statement. The corporate veil of limited liability may be pierced and the personal assets of the shareholders may be reached to satisfy corporate obligations if the corporation was inadequately (thinly) capitalized at the time of its formation. II, however, is incorrect. A corporation borrowing money from a shareholder and not giving the shareholder security is not a ground for piercing the corporate veil.

Answer 135

Choice "a" is correct. The corporate veil of limited liability may be pierced and the personal assets of the shareholders may be reached to satisfy corporate obligations if the shareholder commingles personal assets with his own. This includes using corporate assets to pay personal debts. Choice "b" is incorrect. Failure to designate a registered agent in the articles makes the articles faulty in most states and is a ground for seeking dissolution of the corporation, but in and of itself, it is not a ground for piercing the corporate veil to reach shareholders' personal assets to satisfy corporate obligations. Choice "c" is incorrect. Retention of excess capital may be a ground for imposing extra taxes on the corporation, but it is not a ground for piercing the corporate veil. Choice "d" is incorrect. Failure to conduct a significant portion of business in the chartering state has absolutely no impact on corporate obligations. Many corporations are incorporated in states with favorable tax structures and corporate laws (e.g., Delaware) even though they carry on little or no business in the state of incorporation.

Answer 136

Choice "d" is correct. The right to purchase new issuances of additional stock in order to maintain current proportional ownership is known as a pre-emptive right. Choice "b" is incorrect. A shareholder's derivative right is the right of a shareholder to enforce a legal obligation, for example, by filing a lawsuit, owed to the corporation by a third party when the corporation does not seek to vindicate its own rights. Choice "c" is incorrect. Cumulative voting rights refers to the right of a shareholder to cast votes in the election of directors equal to the product of the number of shares the shareholder owns times the number of directors being elected (e.g., if a shareholder owns 100 shares and three directors are being elected, the shareholder may cast 300 votes). Cumulative voting is often used to help assure representation of minority shareholders. Choice "a" is incorrect. A shareholder's inspection rights refer to the right of a shareholder to inspect and copy certain shareholder records (e.g., minutes of shareholder meetings, list of shareholders, etc.).

Answer 137

Choice "c" is correct. Under the business judgment rule, a director is protected from liability for decisions made on behalf of the corporation if the director acts in good faith and in a manner that the director believes is in the best interest of the corporation, exercising the care that a reasonably prudent person would exercise in a similar position. The action must also ostensibly be within the power of the corporation to undertake and ostensibly within the authority of management to make. Choice "a" is incorrect. A director will not be protected under the business judgment rule if he knowingly causes the corporation to undertake action that is not within the power of the corporation to take and not within the authority of management. Choices "d" and "b" are incorrect. The business judgment rule protects directors; it is not applicable to the shareholders (except perhaps in the case of a closely-held corporation being run by the shareholders).

Answer 138

Choice "a" is correct. A stockholder has the right of approval over fundamental corporate changes such as dissolution. Choice "b" is incorrect. The board of directors selects officers, not the corporate stockholders. Choice "c" is incorrect. The board of directors have discretion to declare dividends. Corporate stockholders do not have an absolute right to annual dividends. Choice "d" is incorrect. Corporate borrowing must be accomplished through the actions of a corporate board of directors resolution.

Answer 139

Choice "c" is correct. For a corporation to dissolve, the directors must adopt a resolution recommending dissolution. Choice "a" is incorrect. The officers are not required to approve resolutions for fundamental corporate changes. Choice "b" is incorrect. To dissolve, the certificate of incorporation need not be amended; rather, a certificate of dissolution must be executed and filed. Choice "d" is incorrect. Generally, fundamental corporate changes such as dissolution need only be approved by a majority of the outstanding shares.

Answer 140

Choice "b" is correct. Under the Revised Model Business Corporation Act, a director is authorized to rely on information provided by the appropriate officer. The officers are selected by the board of directors to run the day-to-day affairs of the corporation, and thus will often have more direct access to information. Directors can also rely on information supplied to them by professionals such as attorneys and CPAs hired by the corporation.

Answer 141

Choice "c" is correct. In a novation, a new party (the corporation) is substituted for an old party (the promoter) in the contract. All parties must agree to the novation. Choice "b" is incorrect. The corporation does not have the power to release Trish; the other party to the contract must agree to the release as well. Choice "a" is incorrect. Technically, only a principal can ratify a contract made by an agent. Because the corporation is not in existence when the promoter acts, the promoter cannot be acting on the corporation's behalf. Thus, the corporation is not the promoter's principal and cannot "ratify" the promoter's contract. Instead, the corporation is said to "adopt" a promoter's contract. In any case, ratification/adoption does not release the promoter from liability; instead, it merely makes the corporation liable along with the promoter. Choice "d" is incorrect. Rejection of the contract does not affect the promoter's liability.

Answer 142

Choice "d" is correct. A registered agent is an agent for the corporation who would accept service of process in the event the corporation is involved in a lawsuit. Choice "b" is incorrect. This describes a stock subscription, and there is no requirement that a registered agent must agree to purchase stock. Choice "c" is incorrect. This describes the liability of a promoter and the registered agent need not have acted as a promoter for the corporation. Choice "a" is incorrect. Promoters or the incorporators are responsible for organizing the corporation.

Answer 143

Choice "b" is correct. Each director owes the corporation fiduciary duties and must act in the best interest of the corporation. Choice "d" is incorrect. Absent a vote giving a director authority to act on behalf of the corporation, a director is not an agent of the corporation and cannot bind the corporation in contract. Choice "a" is incorrect. A principal is the person on whose behalf an agent acts. The corporation does not act on behalf of the directors, and while the directors may delegate some of their power to agents of the corporation, the agents act on behalf of the corporation (i.e., the corporation is the principal) and not the directors. Choice "c" is incorrect. Directors are not trustees of the corporation, as they do not hold legal title to anything belonging to the corporation for the benefit of another.

Answer 144

Choice "d" is correct. An S corporation cannot have any foreign shareholders. Choice "b" is incorrect. An S corporation may have up to 100 shareholders. Choice "c" is incorrect. An estate may be a shareholder in an S corporation. Choice "a" is incorrect. A charitable (501(c)(3)) organization may be a shareholder in an S corporation.

Answer 145

Choice "a" is correct. Davis acted as a promoter (a person who procures capital and other commitments for a corporation to be formed). Promoters are personally liable for contracts that they enter into on behalf of the corporation to be formed. They remain liable on the contracts even after the corporation is formed unless the parties enter into a novation (i.e., an agreement among the parties to substitute the corporation for the promoter). Choice "d" is incorrect. A promoter remains liable on contracts he enters into on behalf of a corporation, even if the corporation is formed by filing articles of incorporation. The corporation does not become liable on the contracts merely because articles were filed. Choices "b" and "c" are incorrect. Promoters remain liable on contracts they enter into on behalf of corporations even if the corporations are never formed.

Answer 146

Choice "c" is correct. A member in a limited liability company has limited liability and the ability to manage, while a partner in a general partnership has full liability and the ability to manage. Choice "a" is incorrect. Generally, both entities' profits are taxable at the ownership level, but a Limited Liability Company may be taxed as an entity if it so elects. Choice "d" is incorrect. Both entities may have any number of owners. Choice "b" is incorrect. Both entities may make disproportionate allocations and distributions to their owners.

Answer 147

Choice "b" is correct. Shareholders have the right to vote on all fundamental corporate changes, including amendments to the articles of incorporation. Choice "c" is incorrect. The hiring of officers is a right that the directors have. Choice "d" is incorrect. Directors have the sole discretion to declare dividends. Choice "a" is incorrect as it includes "c" and "d", both of which are incorrect per the above explanations.

Answer 148

Choice "b" is correct. Commingling shareholders' personal assets and other interests with the corporation's interests is a breach of corporate formalities designed to create and keep the corporation as a separate legal entity. Thus, it is a ground for reaching the shareholder's personal assets (i.e., piercing the corporate veil). Choice "a" is incorrect. Overcapitalization is acceptable. Undercapitalization at the time of formation may cause the shareholder to be personally liable. Choice "c" is incorrect. It is acceptable for most corporations to have more than one class of stock and this does not affect shareholder liability. Choice "d" is incorrect as it includes choices "a" and "c", both of which are incorrect per the above explanations.

Answer 149

Choice "a" is correct. A derivative action is used when a corporation fails to enforce a right that it has against a third party; the shareholder brings suit on behalf of the corporation. A suit against a third party to enforce the corporation's rights against the third party is an example of a corporate shareholder right enforceable by derivative suit. Choices "c", "d", and "b" are incorrect. All of the other choices are incorrect because they involve suits directly against the corporation rather than against a third party.

Answer 150

Choice "a" is correct. Under the Revised Uniform Partnership Act, unless agreed otherwise, partners share losses in the same manner that they share profits. Choice "b" is incorrect. Under the Revised Uniform Partnership Act, unless agreed otherwise, partners share losses in the same manner that they share profits. Here, the partners agreed to share profits in a 2:1:1 ratio. Thus, losses will be shared in that manner rather than equally. Choice "d" is incorrect. Under the Revised Uniform Partnership Act, unless agreed otherwise, partners share losses in the same manner that they share profits. They are not shared in accordance with the partners' capital contributions. Choice "c" is incorrect. Under the Revised Uniform Partnership Act, unless agreed otherwise, partners share losses in the same manner that they share profits. They are not shared in accordance with the partners' capital contributions or loans.

Answer 151

Choice "c" is correct. Apparent authority of one partner arises from the actions or statements of the partnership or another partner indicating to a third party that the first partner has authority. Moreover, a partner automatically has apparent authority to enter into any transaction apparently carrying on in the usual way the business of the partnership. Thus, if the partnership regularly sells goods, a partner would have apparent authority to make representations about the goods. Choice "a" is incorrect. Apparent authority can result from any statement made by the partnership to a third party indicating that the partner has authority. Authority arising from express powers and purposes contained in the partnership agreement is actual authority, not apparent authority. Choice "d" is incorrect. Statements, resolutions, or agreements attempting to limit a partner's apparent authority are not binding on the third party if the third party is unaware of them. Choice "b" is incorrect. Apparent authority of the partner does not, by itself, allow the partner to submit a claim to arbitration. A partner has apparent authority only to carry on ordinary business, and submitting a claim to arbitration is an extraordinary event.

Answer 152

Choice "c" is correct. Because the agreement is silent as to duration, it is a partnership at will. A partner may dissociate from a partnership at will at any time. Choice "b" is incorrect. Because the agreement is silent as to duration, it is a partnership at will. A partner may dissociate from a partnership at will at any time. No court order is required. Choice "d" is incorrect. Partnerships are consensual relationships, so any partner has the power to dissociate at any time; he or she need not obtain the consent of the other partners (though absent consent, the partner will be liable for damages if the dissociation is wrongful). Choice "a" is incorrect. There is no requirement of giving partnership creditors a formal notice of intent to dissociate, but it is a good idea to do so to avoid liability on future partnership obligations.

Answer 153

Choice "c" is correct. A partner has no right to possess partnership property except for partnership purposes. Thus, a personal creditor of a partner has no right to attach items of partnership property to satisfy a partner's personal debt. Choice "d" is incorrect. There is no such rule. If the partnership were liable for the individual partner's debt, the cars could be attached and the partnership would not be dissolved. Choice "a" is incorrect. A partner has no right to possess partnership property except for partnership purposes. Thus, a personal creditor of a partner has no right to attach items of partnership property to satisfy a partner's personal debt. Choice "b" is incorrect. A partner has no right to possess partnership property except for partnership purposes. Thus, a personal creditor of a partner has no right to attach items of partnership property to satisfy a partner's personal debt.

Answer 154

Choice "c" is correct. In a general partnership, absent an agreement to the contrary, partners' share equally in profits regardless of how much work they perform on behalf of the partnership and regardless of the relative amounts of contributions to capital made by each partner. Here, the partnership earned a $200,000 profit and there were two partners. Thus, each is entitled to $100,000. Choice "d" is incorrect because it seeks to allocate profits on the basis of the work performed. Choice "b" is incorrect because it does not allocate profits equally. Choice "a" is incorrect because it seeks to allocate profits on the basis of contributions.

Answer 155

Choice "d" is correct. Unless there is an agreement to the contrary, losses in a partnership will be shared in the same manner as profits are shared. The facts state that the friends agreed to be partners; thus, they formed a partnership.

Answer 156

Choice "c" is correct. Partners are entitled to share in the profits of the partnership but are not entitled to compensation unless otherwise agreed to in the partnership agreement or in the case of winding up by the surviving partner.

Answer 157

Choice "c" is correct. Partners of general partnerships are jointly and severally liable for the debts and obligations of the partnership incurred within the scope of partnership business. Choices "a" and "b" are incorrect. General partners are personally liable for all obligations of their partnership, even beyond their capital contributions.

Answer 158

Choice "b" is correct. The default treatment of LLCs for tax purposes is to treat them as partnerships, with the flow-through of profits and losses. Choice "d" is incorrect. In order to be treated as a corporation, an LLC must make an election to be treated as such. Choice "c" is incorrect. Only a single-member LLC would be treated as a sole proprietorship for tax purposes. Choice "a" is incorrect. An LLC, unless it elects otherwise, will be treated as a partnership for federal tax purposes.

Answer 159

Choice "b" is correct. The owners of a limited liability company are called members. Choice "a" is incorrect. Partners are the owners of partnerships. Choice "d" is incorrect. Stockholders are the owners of a corporation. Choice "c" is incorrect. The term "shareholder" is synonymous with the term "stockholder" and is the name given to the owner of a corporation.

Answer 160

Choice "c" is correct. Every partner is an agent of the partnership and has apparent authority to bind the partnership to contracts that appear to carry on in the usual way the business of the partnership. It would be usual for a partner in a kitchen equipment business to have authority to purchase stoves. Thus, Gage will win because of Locke's apparent authority. Choice "d" is incorrect. Every partner is an agent for his partnership and has apparent authority to bind the partnership to contracts that appear to carry on in the usual way the business of the partnership. Choice "b" is incorrect. Every partner is an agent of the partnership. Choice "a" is incorrect. Locke did not have express authority to purchase the stoves. The facts state that Locke was not authorized to purchase the stoves and thus lacked express authority.

Answer 161

Choice "d" is correct. A sole proprietor is free to transfer or sell the business at will. Choice "a" is incorrect because a sole proprietor is personally liable for all obligations of the business. Choice "b" is incorrect. A sole proprietorship is not considered an entity separate from the sole proprietor. Choice "c" is incorrect because a sole proprietorship ends with the death of the sole proprietor.

Answer 162

Choice "b" is correct. The legal requirements, the consequences, the advantages, and disadvantages of forming a joint venture generally are identical to those of a general partnership. Joint ventures are treated as a partnership in most important legal aspects. Choice "c" is incorrect. A joint venture need not be dissolved upon the completion of a single undertaking. Joint ventures may be formed for a single transaction or for a related series of transactions. Choice "d" is incorrect because a joint venture would be taxed like a partnership, not a corporation. Choice "a" is incorrect because a joint venture, like a partnership, may be formed without filing with the state.

Answer 163

``` Choice "a" is correct. Rule: On dissolution of a general partnership the "order of distribution" would be as follows: III. General partner loans. I. Partners' capital accounts. II. General partners' profits. ```

Answer 164

Choice "d" is correct. Both a limited partnership and a corporation: 1. Can only be created by statute, and 2. Each must file a copy of its certificate with the proper state agency. Choice "a" is incorrect. There are instances in which limited partners do vote on certain partnership matters (e.g., approve new general or limited partners). Choice "c" is incorrect. Limited partnership interests are not automatically exempt from the federal securities laws. Choice "b" is incorrect. Limited partners do not owe a fiduciary duty to the limited partnership.

Answer 165

Choice "d" is correct. A written partnership agreement, while certainly desirable, is not usually necessary to form a valid partnership; partnership agreements are not normally subject to the statute of frauds. Choice "c" is incorrect. A partnership is an association of two or more persons who agree to carry on as co-owners of a business for profit. Thus, an agreement to share ownership of the partnership is a requirement for creating an express partnership. Choice "a" is incorrect. A partnership is an association of two or more persons who agree to carry on as co-owners of a business for profit. Thus, an intent to carry on a business for a profit is a requirement for creating an express partnership. Choice "b" is incorrect. A partnership is an association of two or more persons who agree to carry on as co-owners of a business for profit. The intent to create a business relationship recognized as a partnership is a requirement for creating an express partnership.

Answer 166

Choice "a" is correct. When a judgment is obtained against both a partnership and an individual general partner, the plaintiff must proceed against the partnership assets first and then the assets of any individual general partner. The partnership assets must be exhausted before any general partner's individual assets can be attached.

Answer 167

Choice "c" is correct. Rule: Absent an agreement to the contrary, the members' voting strength is proportionate to their contributions. Choices "a", "d", and "b" are incorrect, per the above rule.

Answer 168

Choice "c" is correct. An operating agreement is an optional agreement among members of a limited liability company (LLC) setting out the details of how the LLC will be run. Choice "d" is incorrect. Articles of organization must be filed with the state in order to form an LLC. An operating agreement is an agreement among the members and need not be filed. Choice "b" is incorrect. In most states, operating agreements must be in writing to be enforceable, but this is not true in some states. Choice "a" is incorrect. As indicated above, the articles of organization are required for formation; an operating agreement is optional.

Answer 169

Choice "b" is correct. Rule: Absent an agreement to the contrary, partners have equal management authority. Choices "d", "a", and "c" are incorrect, per the above rule.

Answer 170

Choice "a" is correct. Absent an agreement to the contrary, if a member of an LLC dies, the LLC is dissolved unless the other members consent to continue. Choice "b" is incorrect, because the LLC does not have to dissolve upon the death of a member. Choice "d" is incorrect, because the LLC does not cease to exist immediately. Choice "c" is incorrect, because the LLC does not continue unless the members consent to continue.

Answer 171

Choice "a" is correct. Rule: Partners in a limited partnership can agree as to how they will split profits and losses, with losses shared up to the amount of the limited partners' capital. Profits and losses are shared on the basis of percentages of capital contributions only in the absence of an agreement otherwise.

Answer 172

Choice "c" is correct. Rule: When the partnership agreement is silent as to how profits are to be divided, they are divided equally. Note also that when the agreement is silent, losses are treated similar to profits, there is no reverse rule that profits are treated like losses.

Answer 173

Choice "c" is correct. Rule: When the partnership agreement is silent as to how losses will be shared, they are shared in the same manner as profits. Rule: Here, the partnership agreement provided that profits were to be split among Moore, Noon, and Kale 1:3:5, respectively. Thus, Kale's share of the loss is $100,000 [5 × (1/9 × 180,000)].

Answer 174

Choice "b" is correct. Under the statute of frauds, an agreement, which by its terms cannot be performed within a year, must be evidenced by a writing containing the material terms and signed by the parties to be charged. Absent a writing, the partnership will be treated as a partnership at will. Choice "a" is incorrect. There is no requirement that partnership agreements be in writing merely because profits will be divided unequally. Choice "d" is incorrect. The statute of frauds requires contracts that cannot by their terms be performed within one year to be evidenced by a writing containing the material terms and signed by the parties to be charged. Choice "c" is incorrect. Whether or not a partnership is to deal in real estate is irrelevant to whether the partnership agreement must be in writing.

Answer 175

Rule: Where the partnership agreement is silent, losses are shared in the same proportion as profits. Choice "a" is correct. Vick was entitled to 30% of the profits and so will be responsible for 30% of the undistributed $30,000 loss, or $9,000.

Answer 176

Explanation Choice "b" is correct. $40,000 − $40,000 − $40,000 (equally). Rule: In the absence of an agreement to the contrary, the profits will be shared equally regardless of investment of money or time.

Answer 177

Choice "a" is correct. The legal requirements, consequences, advantages, and disadvantages of forming a joint venture generally are identical to those of a general partnership. Choices "d", "c", and "b" are incorrect. Joint ventures are not similar to limited partnerships, a business trust or a subchapter S corporation. Joint ventures are similar to a general partnership.

Answer 178

Choice "b" is correct. As a general principle of partnership law, as well as under the Revised Uniform Partnership Act, in the absence of an agreement otherwise partnership losses are allocated among partners in the same proportion as partnership profits. Choice "c" is incorrect. A partnership will dissolve on the death, bankruptcy, incapacity, or other withdrawal of a partner, unless the partners vote to continue. Choice "a" is incorrect. A partner may assign his interest in the partnership at any time without consent of the partners since such an assignment does not make the assignee a partner; instead it merely gives the assignee the assignor's rights to distributions from the partnership. Choice "d" is incorrect. A sale of partnership good will is an extraordinary transaction that requires consent of the partners. A single partner has no authority to make such a sale on his own accord.

Answer 179

Choice "b" is correct. Limited partners have the right to vote on the transfer of interest and admission of a new partner. Admission of a new partner requires unanimous consent. Choice "c" is incorrect. A limited partner who acts as a general partner loses her limited liability status to those she acted as a general partner towards. Choice "d" is incorrect. Partners can freely transfer their interests in profits and losses to third parties, but the third party cannot become a limited partner without the unanimous consent of the other partners. Choice "a" is incorrect. Limited partners must give 6 months notice of withdrawal in absence of an agreement to the contrary.

Answer 180

Choice "b" is correct. The transfer of a member interest requires the consent of the other members. Members may not assign their interest without the other members' consent. Choice "d" is incorrect. Unless the members have agreed to operate as a manager managed limited liability company, all members have the power to participate in management. Choice "a" is incorrect. Members in a limited liability company all have limited personal liability. Choice "c" is incorrect. Unless otherwise agreed, members have the right to manage the every day operations of a limited liability company. This can include the ordering of office supplies.

Answer 181

Choice "d" is correct. Rule: Partners are agents of the other partners of a partnership, and thus act as both an agent and principal (for the actions of other partners) in authorized partnership transactions. All partners are subject to joint and several liabilities on partnership debts and contracts under the Revised Act.

Answer 182

Choice "a" is correct. A partner may assign his or her interest in the partnership. The effect of such an assignment is to transfer the partner's right to receive the partner's share of profits or surplus only. Such an assignment does not cause dissolution or make the assignee a new partner. The assignor is still regarded as a partner and is liable for past and future partnership debts. The assignee, since he is not a partner, is not liable for past and future partnership debts. Choice "d" is incorrect. The assignee of an interest in a general partnership is not personally responsible for the assigning partner's share of past and future partnership debts but is entitled to the assigning partner's interest in partnership profits and surplus on dissolution of the partnership. Choice "b" is incorrect. The assignee of an interest in a general partnership is entitled to the assigning partner's interest in partnership profits and surplus on dissolution of the partnership but is not personally responsible for the assigning partner's share of past and future partnership debts. Choice "c" is incorrect. The assignee of an interest in a general partnership is entitled to the assigning partner's interest in partnership profits and surplus on dissolution of the partnership but is not personally responsible for the assigning partner's share of past and future partnership debts.

Answer 183

Choice "d" is correct. A general partner in a general partnership and a general partner in a limited partnership have the same right to manage the partnership and both are personally liable for all obligations of the partnership. Choices "a" and "c" are incorrect. They both indicate differences between general partners in the two types of partnerships. Choice "b" is incorrect. A general partner's rights and powers are not necessarily limited to those provided in articles of partnership, because general partnerships are not required to have articles of partnership.

Answer 184

Choice "a" is correct. A joint venture is formed for a single business undertaking such as building and designing freight containers to be sold specifically to one company. Each company coming together in this joint venture has its own business outside of this one endeavor. Choice "c" is incorrect. A general partnership is like a joint venture, but it contemplates a broader relationship rather than one limited to a single transaction or a related series of transactions. Choice "d" is incorrect. A limited liability partnership is primarily designed for professionals who want to work as partners but with limited personal liability. Choice "b" is incorrect. Sole proprietorships have only one person in the business.

Answer 185

Choice "d" is correct. Rule: Partners are jointly and severally liable for partnership torts. Moreover, partners are liable for all partnership obligations, whether or not they personally authorized the obligation. Choices "a", "b", and "c" are incorrect, per the above rule.

Answer 186

Choice "b" is correct. Toby was a general partner and general partners in a limited partnership are personally liable for all obligations of the partnership. If the partnership does not pay Kelley, Toby will be liable for the amount owed.

Answer 187

Choice "b" is correct. Toby was a general partner and general partners in a limited partnership are personally liable for all obligations of the partnership. If the partnership does not pay Kelley, Toby will be liable for the amount owed.

Answer 188

Choice "a" is correct. The assignee of an interest in a partnership receives the assignor's rights to profits and surplus. Choice "c" is incorrect. An assignee may become a partner only with the consent of all of the existing partners; a mere assignment by one partner of his or her interest is not enough. Choice "d" is incorrect. An assignee of an interest in a partnership does not become liable for partnership debts - the assignee gets the assignor's rights to profits but the assignment does not include a delegation of the assignor's duties to pay partnership obligations. Choice "b" is incorrect. An assignment does not dissolve the partnership.

Answer 189

Choice "c" is correct. Rule: Members of an LLC are not personally liable for the LLC's obligations. Moreover, an agent is not liable on a contract the agent enters into on behalf of a disclosed principal. Here, the contract was entered into by Eller on behalf of Venture, an LLC, and Eller disclosed that he was acting only as an agent of Venture. Thus, Trent Corp. can collect from the LLC'S assets only.

Answer 190

Choice "d" is correct. A joint venture is an association of persons engaged as co-owners in a single (special transaction) undertaking for profit. A joint venture is treated as a partnership for most important legal respects. Choice "c" is incorrect. A joint venture may include more than two persons. Choice "b" is incorrect. A joint venture must have a profit motive. Choice "a" is incorrect. A joint venture is treated as a partnership and not as a corporate enterprise.

Answer 191

Choice "d" is correct. Each partner is jointly and severally liable for torts committed by any partner while in the course of partnership business. Choice "a" is incorrect. All partners may be held liable for a tort committed by a partner in the course of partnership business. Choice "b" is incorrect. Each partner is liable for torts committed by any partner while in the course of partnership business. Choice "c" is incorrect. Each partner is liable for the full amount of damages incurred as a result of a partner's tort; the partners are not liable only for their pro rata share.

Answer 192

Choice "c" is correct. The general rule is that the mere assignment of a partner's interest does not make the assignee a partner. One may become a partner only with the consent of all other partners. Here, all other partner's consented to Ward's becoming a partner. Thus, Ward is a partner with full rights to participate in management. Choice "b" is incorrect. The general rule is that the mere assignment of a partner's interest does not make the assignee a partner. One may become a partner only with the consent of all other partners. Here, all other partner's consented to Ward's becoming a partner. Thus, Ward is a partner with full partner rights. Choice "a" is incorrect. An incoming partner is not liable for debts that the partnership incurred before admission beyond the incoming partner's contribution, but is fully liable for debts incurred after becoming a partner. Choice "d" is incorrect. A partnership is a consensual relationship; there is no requirement of a contribution to become a partner.

Answer 193

Choice "c" is correct. Rule: Upon dissolution, the assets of a limited partnership are first used to pay off creditors. The contributions of limited partners, such as Dave, are returned next. Choices "b", "d", and "a" are incorrect, per the above rule.

Answer 194

Choice "b" is correct. Rule: A limited partnership must have at least one general partner and one limited partner. Choices "a", "c", and "d" are incorrect, per the above rule. Be careful of answers that include the word "all."

Answer 195

Choice "b" is correct. Rule: A limited partner will be considered a general partner with full personal liability only to those that the limited partner transacts with as if he were a general partner.

Answer 196

Choice "c" is correct. Rule: The death of a general partner will, by operation of law, dissolve the limited partnership. Because the dissolution is by operation of law, there is no requirement of obtaining a judicial decree. Remaining limited partners do not automatically become general partners as a result of the death of the general partner.

Answer 197

Choice "d" is correct. The Articles of Organization must be filed with the secretary of state. Choice "c" is incorrect. An operating agreement is an agreement between the members containing provisions relating to management, profit sharing, transferring interests, etc. and does not need to be filed with the state. Choices "a" and "b" are incorrect. Articles of incorporation and bylaws are documents relating to corporations, not an LLC.

Answer 198

Choice "b" is correct. Absent an agreement to the contrary, if a member in the LLC sells his interest in an LLC without obtaining the other members' consent, the assignee is only entitled to receive the assignor's share of profits. Choices "a", "c", and "d" are incorrect, because, absent an agreement to the contrary, although a member of an LLC is allowed to assign his interest in profits and losses, an assignee of a membership interest may not participate in the management of the LLC.

Answer 199

Choice "d" is correct. Limited liability companies do not issue "shares" held by shareholders like in a corporation. Instead, members (the owners) are said to have "interests" in the LLC.

Answer 200

Choice "d" is correct. Rule: The assignee of a partner's interest in the partnership does not thereby become a partner absent the unanimous consent of the other partners. Thus, the assignee has no right to participate in the management of the partnership and has only a right to receive the assignor's share of the partnership profits.

Answer 201

Choice "d" is correct. In a limited partnership, a general partner may be a secured creditor of the limited partnership. Choice "a" is incorrect. In a limited partnership, a limited partner may be an unsecured creditor of the limited partnership. Choice "b" is incorrect. In a limited partnership, a general partner may also be a limited partner at the same time. Choice "c" is incorrect. In a limited partnership, only the limited partners will have limited liability. A limited partnership must have at least one general partner and general partners have unlimited liability. (The word "all" makes this option wrong.)

Answer 202

Choice "c" is correct. Rule: Absent an agreement otherwise, all members generally participate in management, and their voting strength is determined in proportion to ownership interest. This is calculated by comparing each member's capital contribution to that of the other members.

Answer 203

Choice "a" is correct. Rule: A partner in a LLP is personally liable for tort liabilities arising from his own negligence and the negligence of his direct subordinates and for breach of contract damages. He is NOT personally liable for the negligent actions committed by his partners.

Answer 204

Choice "b" is correct. Rule: To have limited liability, an LLP must file with the state a registration statement usually referred to as Articles of LLP. It is generally designed for professionals who desire to be partners with other like professionals and yet not have liability for the malpractice of their partners. Some states require that personal liability insurance (not property insurance) be carried to protect those harmed by the professionals' malpractice.

Answer 205

Only general partners have the right to take part in the control of the partnership.

Answer 206

Choice "a" is correct. As a general rule, decisions regarding matters within the ordinary course of the partnership's business may be controlled by majority vote. Matters outside the ordinary course of the partnership's business require the consent of all the partners. Admitting a new partner is an extraordinary event. Thus, unanimous consent is required. Choice "c" is incorrect. Although dissolution is an extraordinary act, in a general partnership not for a term of years, any one partner may cause a dissolution by giving notice of the intent to withdraw. Choice "b" is incorrect. A capital expenditure could well be within the ordinary scope of partnership business and thus would require only a majority vote. Choice "d" is incorrect. The sale of partnership real property could easily be within the ordinary scope of partnership business (e.g., a partnership can be formed for the purpose of buying and selling real property) and thus would require only a majority vote.

Answer 207

Rule: A partner's interest in specific partnership property is neither assignable to the partner's individual creditors nor is it subject to attachment by the partner's individual creditors.

Answer 208

Choice "b" is correct. A limited partner has rights similar to those of a corporate shareholder; he must be allowed to review financial and tax information of the limited partnership. Choice "a" is incorrect. A limited partnership must have one or more general partners, whose liability is unlimited. Choice "c" is incorrect. One may be both a general and a limited partner simultaneously. Such a person has all of the rights and liabilities of both a limited partner and a general partner. Choice "d" is incorrect. A limited partner has no management authority, rather he is a passive investor, like a corporate shareholder.

Answer 209

Choice "d" is correct. A partnership at will is a partnership with no definite term (i.e., without specified duration). Such a partnership can be terminated at any time. Choice "c" is incorrect. A partnership without a specified duration is called a partnership at will, not a perpetual partnership. There is no such thing as a perpetual partnership because a partnership is not perpetual. A partnership may be dissolved after a partner dies or otherwise dissociates from the partnership. Choice "b" is incorrect. A partnership by estoppel is the appearance of a partnership when there is no formal partnership. If parties who are not partners give the appearance to third parties that they are partners, the law may deem the parties to be a partnership by estoppel. The parties will be treated as partners, even though they are not. Choice "a" is incorrect. The legal term for a partnership of indefinite duration is a partnership at will, not an indefinite partnership.

Answer 210

Choice "d" is correct. LLP partners are liable only for their own negligence and the negligence of anyone who commits a wrongful act under the partner's direct control.

Answer 211

Choice "c" is correct. Every partner in a partnership - whether active or inactive - has the right to inspect the partnership's books and records. Choice "d" is incorrect. Only a partner has a right to inspect the partnership's books and records; an employee of the partnership has no such right. Choice "b" is incorrect. Only current partners have a right to inspect the partnership's books and records; former partners do not have such a right. Choice "a" is incorrect. Only partners have a right to inspect a partnership's books and records. A transferee of a partner's interest has only the partner's right to distributions.

Answer 212

Choice "b" is correct. Voluntary dissolution of a corporation requires the filing of articles of dissolution with the state. Choice "a" is incorrect. A general partnership does not file a document with the state in order to be formed and does not need to file a document with the state in order to be dissolved. A partnership will be considered to be dissolved upon the happening of a number of events, including upon the agreement of the partners. Choices "c" and "d" are incorrect. Although a limited partnership and a limited liability limited partnership may be formed only by filing with the state, dissolution of such entities does not require a filing with the state. It is sufficient merely to give creditors and persons with whom the limited partnership dealt notice of the dissolution. (However, such entities also have the option to file a statement of dissolution.)

Answer 213

Rule: The liability of a limited partner for partnership debts is limited to the extent of the capital, which he has contributed or has agreed to contribute. A general partner, however, is liable for all partnership debts and liabilities. Choice "b" is correct. In this case, both Grey and Fox are limited partners and, thus, their respective maximum liability for partnership debts may not exceed their contributions ($200,000 each). Because White is a general partner, however, he will be personally liable for the excess of any debt remaining after assets have been applied upon a dissolution. Therefore, White will be liable for $125,000 (the difference between the fair market value of assets ($150,000) and partnership liabilities ($275,000) at dissolution).

Answer 214

Rule: Amending the partnership agreement (presumably to grant authority) will not cause the partnership to be bound because authority must exist at the time the contract is made or the partnership must ratify the contract.

Answer 215

Choice "b" is correct. In the absence of an agreement between all partners, the assignment of a partner's interest does not make the assignee a substitute partner; it merely transfers the assignor's rights to distributions to the assignee. Choice "c" is incorrect. Absent an agreement among the partners otherwise, an assignment of an interest in a partnership is merely an assignment of the assignor's rights to receive distributions from the partnership and does not give the assignee any right to inspect the partnership's books. Choice "d" is incorrect. Absent an agreement among the partners otherwise, an assignment of an interest in a partnership is merely an assignment of the assignor's rights to receive distributions from the partnership; it does not make the assignee a new partner. Since there is no change in who is a partner, there is no dissolution. Choice "a" is incorrect. All partners must agree to make someone a partner, not just the general partner.

Answer 216

Choice "d" is correct. The bankruptcy of a partner will result in the dissociation of a partner. Choice "a" is incorrect, because although joining the city hospital medical partnership could be construed as a breach of fiduciary duty owed to the other partners in ABC medical partnership, standing alone, it would not result in a dissociation. Choice "c" is incorrect. All that was attached was the partner's right to distributions, which does not cause dissociation. Choice "b" is incorrect, because although being sued might cause Dr. Bradley to resign, which would cause dissociation, standing alone, being sued by the other partners does not cause dissociation.

Reg 8 Flashcards

(240 cards)