BLAW 3310 Test 3 Schwemer with Guaranteed Accurate Answers

CHAPTER 12 LLC and Personal Liability - correct answer No member or manager is personally liable for all debts. Piercing the corporate veil - correct answer A situation in which courts put aside limited liability and hold shareholders or directors personally liable for a corporation's actions or debts. Forming a partnership - correct answer Either an oral or written agreement must be made between partners. Written is the most formal and may include terms such as finances, management, and terms for dissolution. General Partnership - correct answer No state filing needed; is created when two or more partners agree to form. Low startup cost. Limited Partnership - correct answer Only general partners have management capabilities; other partners have limited liability. Limited Liability Partnership - correct answer LP created by professional businesses such as dentists or attorneys. Things that shareholders vote on - correct answer Matters that change the corporation's structure or existence (such as a merger with another firm or an amendment to the corporation's articles of incorporation). Shareholders also vote for the board of directors. Negative of Sole Proprietorships and Partnerships - correct answer Unlimited Liability Things partners have to agree on - correct answer Mergers, dissolution, adding new partners, major business decisions Business judgement rule - correct answer Makes directors and managers of corporations immune from liability when problems result from honest mistakes in judgement, so long as there is a reasonable basis for the decisions. Proxy - correct answer A written authorization by shareholders to cast their votes, so that they do