REG Business Law

Question 1

A negotiable instrument can be freely transferred by negotiation

Answer 1

1. Be in writing
2. Be signed
3. Be an unconditional promise to pay on demand or at a definite time
4. Be payable to someone
5. Not state any other undertaking or instruction by the person promising to pay.

Question 2

A negotiable interest cannot

Answer 2

be made subject to another agreement

Question 3

What is ch. 11 bankruptcy?

Answer 3

reorganization

Question 4

What does the debtor have to file for ch.11 bankruptcy (reorganization)

Answer 4

1. File reorganization plan
2. Confirmation of the reorganization plan by the court
3. Opportunity for each class of claims to accept the reorganization plan

Question 5

Who is considered an insider for 1934 act?

Answer 5

Directors, officers, key agents such as attorneys, and stockholders owning 10% or more of the corporation stock

Question 6

The Internal Revenue Service (IRS) states that if an employer did not withhold income, Social Security, or Medicare taxes from an employee’s wages, or withheld less than the correct amount, the employer can

Answer 6

make it up from later pay to that employee. However, the employer is the one responsible for the underpayment. Reimbursement is a matter for settlement between the employer and employee, and underwithheld income tax must be recovered from the employee on or before the last day of the calendar year.

Question 7

Partners are generally insulated from responsibility for negligence of other partners, providing:

Answer 7

1) the partner was not personally negligent.
2) the negligent individual was not supervised by the partner.
3) the partner was not knowledgeable of another partner’s negligence.
4) the partner did not fail to take appropriate action to stop or mitigate the negligence if and when that individual became aware of the negligent act.

Question 8

Management has ultimate responsibility for the accuracy of the information filed with the SEC, but the Securities Act of 1933 extends the responsibility for any false or misleading statements

Answer 8

the accountants

Question 9

An independent auditor of registration filings under federal securities statutes is responsible to certify that

Answer 9

1. reasonable grounds to believe that statements involved with the registration are true
2. that there was no omission to state a material fact required to be stated or necessary to make the statements not misleading.