Unit Three Test

Question 1

form of business ownership in which one individual owns the business

Answer 1

sole or individual proprietorship

Question 2

pooling of capital resources and the business or professional talents of two or more individuals with the goal of making a profit

Answer 2

partnership

Question 3

partnership in which at least one partner has a liability limited to the loss of the capital contribution made to the partnership

Answer 3

limited liability partnership

Question 4

a partnership for federal tax treatment and the limited liability feature of the corporate form of business organization

Answer 4

limited liability company

Question 5

artificial being created by governmental grant, which, for many purposes is treated as a natural person

Answer 5

corporation

Question 6

relationship in which two or more persons or firms combine their labor or property for a single undertaking and share profits and losses equally unless otherwise agreed

Answer 6

joint venture

Question 7

combination of two or more persons for the furtherance of a common nonprofit purpose

Answer 7

unincorporated association

Question 8

group of two or more persons or enterprises that acts through a common agent with respect to a common objective, such as buying or selling

Answer 8

cooperative

Question 9

privilege or authorization, generally exclusive, to engage in a particular activity within a particular geographic area, such as a government franchise to operate a taxi company within a specific city, or a private franchise as the grant by the manufacturer of a right to sell products within a particular territory or for a particular number of years

Answer 9

franchise

Question 10

party granting the franchise

Answer 10

franchisor

Question 11

person to whom franchise is granted

Answer 11

franchisee

Question 12

sets forth rights of franchisee to use trademarks etc of franchisor

Answer 12

franchise agreement

Question 13

mark that identifies a product

Answer 13

trademark

Question 14

name under which a business is carried on and if fictitious must be registered

Answer 14

trade name

Question 15

products total image including its overall packaging look

Answer 15

trade dress

Question 16

formula, device, or compilation of information that is used in ones business and is of such a nature that it provides an advantage over competitors who do not have the information

Answer 16

trade secret

Question 17

FTC rule requiring detailed disclosures and prohibiting certain practices

Answer 17

franchise rule

Question 18

partnership in which the partners conduct as coowners a business for profit, and each partner has a right to take part in the management of the business and has unlimited liability

Answer 18

general partnership

Question 19

one of two or more persons who jointly own and carry on a business for profit

Answer 19

partner

Question 20

partners who publicly and actively engage in the transaction of firm business

Answer 20

general partners

Question 21

combination or two or more persons for the furtherance of a common nonprofit purpose

Answer 21

unincoprorated association

Question 22

document prepared to evidence the contract of the parties

Answer 22

partnership agreement

Question 23

ownership relationship that exists between partners under the uniform partnership act

Answer 23

tenancy in partnership

Question 24

order by a court, after a business partners personal assets are exhausted, requiring that the partners share of the profits by paid to a creditor until the debt is discharged

Answer 24

charging order

Question 25

authority of an agent to perform a certain act

Answer 25

express authority

Question 26

apportions parters responsibility for partnership debt equally

Answer 26

joint liability

Question 27

disproportionate satisfaction of partnership debt rendering each partner liable for the entire debt with the right to contribution from other partners

Answer 27

joint and several liability

Question 28

attaching of certain consequences to certain facts because of legal principles that operate automatically, as contrasted with consequences that arise because of the voluntary action of a party designed to create those consequences

Answer 28

operation of law

Question 29

partnership that can be formed by one or more general partners and one or more limited partners

Answer 29

limited partnership

Question 30

partner who neither takes part in the management of the partnership nor appears to the public to be a general partner

Answer 30

limited partner

Question 31

partnership in which the partners conduct as co-owners a business for profit, and each partner has a right to take part in the management of the business and has unlimited liability, general partners publicity and activity engage in the transaction of firm business

Answer 31

general partner

Question 32

artificial being created by governmental grant, which for many purposes is treated as a natural person

Answer 32

corporation

Question 33

written approval from the state or national government for a corporation to be formed

Answer 33

certificate of incorporation

Question 34

grant of authority from a government to exist as a corporation, generally replaced today by a certificate of incorporation approving the articles of incorporation

Answer 34

charter

Question 35

corporation that has been established for governmental purposed and for the administration of public affairs, cities

Answer 35

public corporation

Question 36

corporation organized for charitable and benevolent purposes or for purposes of finance, industry, and commerce

Answer 36

private corporation

Question 37

private corporation furnishing services on which the public is particularly dependent, for example, a gas and electric company

Answer 37

quasi public corporation

Question 38

corporations formed by government that performs public services

Answer 38

authorities

Question 39

corporation that has been incorporated by the state in question as opposed to incorporation by another state

Answer 39

domestic corporation

Question 40

corporation incorporated under the laws of another state

Answer 40

foreign corporation

Question 41

corporation whose shares are held by a single shareholder or a small group of shareholders

Answer 41

close corporation

Question 42

corporation organized for a charitable or benevolent purpose

Answer 42

eleemosynary corporation, non profit

Question 43

for profit corporation that sets a goal to create a public benefit while still providing economic returns to its investors

Answer 43

benefit corporation

Question 44

power to govern, the power to adopt laws for the protection of the public health, welfare, safety, and morals

Answer 44

public power

Question 45

states code listing certain requirements for creation of a corporation

Answer 45

general corporation code

Question 46

rules and regulations enacted by a corporation to govern the affairs of the corporation and its shareholders, directors, and officers

Answer 46

bylaws

Question 47

corporate stock that the corporation has reacquired

Answer 47

treasury stock

Question 48

act or contract that the corporation does not have authority to do or make

Answer 48

ultra vires

Question 49

persons who plan the formation of the corporation and sell or promote the idea to others

Answer 49

promoters

Question 50

one or more natural persons or corporations who sign and file appropriate incorporation forms with a designated government official

Answer 50

incorporator

Question 51

corp with a legal right to exist by virtue of law

Answer 51

corporation de jure

Question 52

existing in fact as distinguishing from as of right, as in the case of an officer or a corporation purporting to act as such without being elected to the office or having been properly incorporated

Answer 52

de facto

Question 53

corporation that comes about when parties estop themselves from denying that the corporation exists

Answer 53

corporation by estoppel

Question 54

combining of two or more corporations in which the corporate existence of each one ceases and a new corporation is created

Answer 54

consolidation

Question 55

combining of corporations by which one absorbs the other and continues to exist, preserving its original charter and identify while the other corporation ceases to exist

Answer 55

merger

Question 56

relationship of a parent corporation to subsidiary corporations engaged in diversified fields of activity unrelated to the field of activity of the parent corporation

Answer 56

conglomerate

Question 57

name for shares of a company that have been issued to stockholders

Answer 57

outstanding

Question 58

declared money value of the outstanding stock of the corporation

Answer 58

capital stock

Question 59

specified monetary amount assigned by an issuing corporation for each share of its stock

Answer 59

par value

Question 60

value found by dividing the value of the corporate assets by the number of shares outstanding

Answer 60

book value

Question 61

price at which a share of stock can be voluntarily bought or sold in the open market

Answer 61

market value

Question 62

document evidencing a shareholders ownership of stock issued by a corporation

Answer 62

certificate of stock

Question 63

stock that has no right or priority over any other stock of the corporation as to dividends or distribution of assets upon dissolution

Answer 63

common stock

Question 64

stock that has a priority or preference as to payment of dividends or upon liquidation or both

Answer 64

preferred stock

Question 65

a debt investment, a loan to a corporation or govt entity usually for a defined period of time at a fixed interest rate

Answer 65

bond

Question 66

date that corporation is required to repay a loan to a bondholder

Answer 66

maturity date

Question 67

unsecured bond of a corporation, with no specific corporate assets pledged as security for payment

Answer 67

debenture

Question 68

bonds held by owners whose names and addresses are registered on the books of the corporation to ensure proper payment

Answer 68

registered bonds

Question 69

agreement setting forth the contractual terms of a particular bond issue

Answer 69

bond indenture

Question 70

instrument by which a grantor conveys or transfers the title to a grantee

Answer 70

deed

Question 71

usually a commercial banking institution, to represent the interests of the bondholders and ensure that the terms and covenants of the bond issue are met by the corporation

Answer 71

indenture trustee

Question 72

fixed amount of money set aside each year by the borrowing corporation toward the ultimate payment of bonds

Answer 72

sinking funds

Question 73

contract or agreement to buy a specific number and kind of shares when they are issued by the corporation

Answer 73

stock subscription

Question 74

unqualified assent to the act or proposal of another, as the acceptance of a draft, of an offer to make a contract, of goods delivered by the seller, or of a gift or deed

Answer 74

acceptance

Question 75

system of voting for directors in which each shareholder has as many votes as the number of voting shares owned multiplied by the number of directors to be elected, and such votes can be distributed for the various candidates as desired

Answer 75

cumulative voting

Question 76

authorizing someone else to vote the shares owned by the shareholder

Answer 76

voting by proxy

Question 77

written authorization by a shareholder to another person to vote the stock owned by the shareholder, the person who is holder of such a written authorization

Answer 77

proxy

Question 78

transfer by two or more persons of their shares of stock of a corporation to a trustee who is to vote the shares and act for such shareholders

Answer 78

voting trust

Question 79

shareholders right upon the increase of a corporations capital stock to be allowed to subscribe to such a percentage of the new shares as the shareholders old shares bore to the former total capital stock

Answer 79

preemptive right

Question 80

corporation designed to exhaust or use up the assets of the corporation, such as by extracting oil, coal, iron, and other ores

Answer 80

wasting assets corporation

Question 81

secondary action for damages or breach of contract brought by one or more corporate shareholders against directors officers or third persons

Answer 81

derivative action

Question 82

state statutes designed to protect the public from the same of worthless stocks and bonds

Answer 82

blue sky laws

Question 83

the original distribution of securities by the issuing corporations

Answer 83

primary offerings

Question 84

stocks and bonds issued by a corporation, under some investor protection laws, the term includes any interest in an enterprise that provides unearned income to its owner

Answer 84

securities

Question 85

document disclosing specific financial information regarding the security, the issuer, and the underwriter

Answer 85

registration statement

Question 86

information provided to each potential purchaser of securities setting forth the key info contained in the registration statement

Answer 86

prospectus

Question 87

provisions of the securities act of 1933 requiring advance disclosure to the public of a new securities issue through filing a statement with the sec and sending a prospectus to each potential purchaser

Answer 87

registration requirements

Question 88

a theory that in an open and developed securities market, the price of a stock is determined by the information on the company available to the public, and misleading statements will defraud purchasers of stock even if they do not directly rely on these statements

Answer 88

fraud on the market

Question 89

privileged information on company business known only to employees

Answer 89

insider imformation

Question 90

full time corporate employee or a director

Answer 90

insider

Question 91

someone retained by a corporation for professional services on an as needed basis, such as an attorney, accountant, or investment banker

Answer 91

temporary insider

Question 92

individual who receives information about a corporation from an insider or temporary insider

Answer 92

tippee

Question 93

profit realized by a corporate insider from selling securities less than six months after purchase

Answer 93

short swing profit

Question 94

general offer to all shareholders of a target corporation to purchase their shares for cash at a specified price

Answer 94

cash tender offer

Question 95

minimum number of persons, shares represented, or directors who must be present at a meeting in order to lawfully transact business

Answer 95

quorum

Question 96

rule that allows management immunity from liability for corporate acts where there is a reasonable indication that the acts were made in good faith with due care

Answer 96

business judgment rule