BADM 300 EXAM 1- FRICKE UIUC
QUESTIONS & ANSWERS|| 2026
LATEST UPDATE
What is the law? - ANSWERThe rules for how things works, if you don't follow those
rules then there are consequences
English Common Law - ANSWERjudges make the laws (setting the precedent)
Sources of US Law - ANSWERFederal & State
Sources of US Federal Law - ANSWERConstitution, Treaties, Statutes, Executive
Orders, Regulations, Judicial Decisions
What are executive orders? - ANSWERLaws signed by the president
What are Executive Regulations? - ANSWERissued by the executive branch of the
government, normally by some sort of agency
Sources of State Law - ANSWERConsitution, Statutes, Regulation, Judicial Decisions,
Municipal ordinances
What is a municipal ordinance? - ANSWEREX. shut down Foo Fighters in Wrigleyville
at 11 pm because of quiet ordinance
Which law wins? (Federal vs. State) - ANSWERGeneral rule: Federal;
Constitution>Statute>Regulation
What if a court and statute are at odds? - ANSWERCourts uphold statutes unless they
find them to be unconstitutional (very small ground); Legislatures can pass statutes that
negate non-constitutional judicial decisions
Form of Business entities? - ANSWERSole proprietorship/DBA, General Partnership, S-
Corp, C-Corp, Benefit Corp
What is a sole proprietorship? - ANSWEROne person engaged in a business for a profit
What are pros for a sole proprietorship? - ANSWEREasy, cheap, maintain control, easy
to sell
What are cons for a sole proprietorship? - ANSWERUnlimited personal
liability(****outweighs all pros) & no tax benefits (taxed as ordinary income, which is a
lot higher than capital gain rates)
, What is a general partnership? - ANSWER(1) Two or more people (2) engaged in a
business (3) as a co-owners (4) for profit
What is UPA & RUPA? - ANSWER(Revised) Uniformed Partnership Act; govern over
partnerships
3 things that partnerships CANNOT modify in a UPA or RUPA - ANSWEReliminate the
duty of loyalty, restrict rights of third parties, restict the right of access to books and
records
General Partnership taxation - ANSWERGP is not taxed, instead income/losses flow
through to partners
General Partnership Rights (8) - ANSWERRight to manage(equal vote unless modified),
right to share in profits(equal unless modified),
right to compensation (NONE for partners-modifiable),
rights to reimbursement(if hurt on job, both partners pay),
right to return of loans,
right to return of capital(if someone wants to leave, they can get their investment back),
right to information,
right to an accounting
General Partnership Duties - ANSWERDuty of Loyalty, Duty of Care, Duty to Inform,
Duty of Obedience, Duty to account
Partners are in a fiduciary relationship. Define fiduciary. - ANSWERrequired to look out
for someone's best interest, higher standard of dealing with that person (other
e.g.attorney/client; doctor/patient)
What is involved in the Duty of Loyalty in a General Partnership? - ANSWERNo:
1) self-dealing (contract with other company you own),
2) usurping (use great opporunity for self without telling partners),
3)competing,
4) making secret profits,
QUESTIONS & ANSWERS|| 2026
LATEST UPDATE
What is the law? - ANSWERThe rules for how things works, if you don't follow those
rules then there are consequences
English Common Law - ANSWERjudges make the laws (setting the precedent)
Sources of US Law - ANSWERFederal & State
Sources of US Federal Law - ANSWERConstitution, Treaties, Statutes, Executive
Orders, Regulations, Judicial Decisions
What are executive orders? - ANSWERLaws signed by the president
What are Executive Regulations? - ANSWERissued by the executive branch of the
government, normally by some sort of agency
Sources of State Law - ANSWERConsitution, Statutes, Regulation, Judicial Decisions,
Municipal ordinances
What is a municipal ordinance? - ANSWEREX. shut down Foo Fighters in Wrigleyville
at 11 pm because of quiet ordinance
Which law wins? (Federal vs. State) - ANSWERGeneral rule: Federal;
Constitution>Statute>Regulation
What if a court and statute are at odds? - ANSWERCourts uphold statutes unless they
find them to be unconstitutional (very small ground); Legislatures can pass statutes that
negate non-constitutional judicial decisions
Form of Business entities? - ANSWERSole proprietorship/DBA, General Partnership, S-
Corp, C-Corp, Benefit Corp
What is a sole proprietorship? - ANSWEROne person engaged in a business for a profit
What are pros for a sole proprietorship? - ANSWEREasy, cheap, maintain control, easy
to sell
What are cons for a sole proprietorship? - ANSWERUnlimited personal
liability(****outweighs all pros) & no tax benefits (taxed as ordinary income, which is a
lot higher than capital gain rates)
, What is a general partnership? - ANSWER(1) Two or more people (2) engaged in a
business (3) as a co-owners (4) for profit
What is UPA & RUPA? - ANSWER(Revised) Uniformed Partnership Act; govern over
partnerships
3 things that partnerships CANNOT modify in a UPA or RUPA - ANSWEReliminate the
duty of loyalty, restrict rights of third parties, restict the right of access to books and
records
General Partnership taxation - ANSWERGP is not taxed, instead income/losses flow
through to partners
General Partnership Rights (8) - ANSWERRight to manage(equal vote unless modified),
right to share in profits(equal unless modified),
right to compensation (NONE for partners-modifiable),
rights to reimbursement(if hurt on job, both partners pay),
right to return of loans,
right to return of capital(if someone wants to leave, they can get their investment back),
right to information,
right to an accounting
General Partnership Duties - ANSWERDuty of Loyalty, Duty of Care, Duty to Inform,
Duty of Obedience, Duty to account
Partners are in a fiduciary relationship. Define fiduciary. - ANSWERrequired to look out
for someone's best interest, higher standard of dealing with that person (other
e.g.attorney/client; doctor/patient)
What is involved in the Duty of Loyalty in a General Partnership? - ANSWERNo:
1) self-dealing (contract with other company you own),
2) usurping (use great opporunity for self without telling partners),
3)competing,
4) making secret profits,
