BLAW 3391 EXAM Questions With
Verified Answers
A person must be a lawyer in order to serve as an arbitrator. T/F
False:
Lawyers, professors, and other professionals typically serve as arbitrators.
Under our system of justice, courts may issue advisory opinions. T/F
False:
The case-or-controversy (or justifiable controversy) requirement ensures that courts do
not render advisory opinions.
The defendant in a state action is entitled to transfer a case to the federal court if
there is concurrent jurisdiction.
T/F
True
Which of the following is not something that a joint venture and a partnership
have in common?
Both are created for an ongoing full business:
-Joint ventures differ from partnerships because they are usually created for making and
selling a single product, while a partnership creates a full ongoing business
Stakeholders of a business consist of many different groups of people who are
affected by the business's decisions.
T/F
True
What is the most imporatant duty that partners have to each other in a
partnership?
Fiduciary duty
-Perhaps the most important type of duty partners have toward one another is the
fiduciary duty. Partners must, in good faith, work for the benefit of the partnership. They
should not take any action that will undermine it, such as engaging in business that
competes with it
,Tom and his brother, Fred, create a plumbing business. They agree to share
control of the business, to work the same amount, and to split the profits equally.
What kind of business have they created?
A general partnership
-In a general partnership the partners divide the profits (usually equally) and the
management responsibilities and share unlimited personal liability for the firm's debts
Corporations have implied powers.
T/F
True
A(n) ________ is a corporation that has met the substantial elements of the
incorporation process
de jure corporation
-Courts usually hold that corporations that make minor errors in the incorporation
process still enjoy de jure corporate status
Victor and Kelley decide that they will jointly fund a new stadium being built in
their town. Neither Victor nor Kelley has enough money to complete this project
alone. Furthermore, these two people will not actually build the stadium, but will
provide the money necessary to support the project. What is this kind of
business arrangement called?
A syndicate
-An investment group that comes together for the explicit purpose of financing a specific
large project is a syndicate
Which of the following is not generally included in a franchise agreement?
The price at which the franchisee sells the goods
If the state of New York sues the state of New Jersey regarding who owns the
George Washington Bridge, the U.S. Supreme Court may serve as the trial court.
T/F
True
A corporation must be incorporated in the state in which it has its principal place
of business. T/F
, False:
Although most corporations incorporate in the state in which they are located and do
most of their business, more than half of all publicly held corporations, including more
than half of the Fortune 500 companies, are incorporated in Delaware.
A(n) ____________ is a review and listing of all partnership assets and/or profits
and typically lists the distribution of assets and profits to the partners
accounting:
Unless otherwise stated in the partnership agreement, a partner's rights include the right
to share in management, the right to share in profits, the right to compensation, property
rights, the right to inspect books, and the right to an accounting
A court must have several types of jurisdiction to decide any particular case. T/F
True
In some cases, the U.S. Supreme Court functions as a trial court. T/F
True
A corporation is considered alien in states in which it conducts business but is
not incorporated. T/F
False:
A corporation is considered foreign in states in which it conducts business but is not
incorporated.
The defendant in a state action is entitled to transfer a case to the federal court if
there is concurrent jurisdiction. T/F
True
Business managers should only consider customers when they engage in ethical
reasoning. T/F
False:
Business managers must consider all relevant stakeholders when they engage in
ethical reasoning.
Which of the following statements is false?
Corporations do not assume liability for corporate actions.
-Because corporations are legal entities separate from their shareholders, corporations
Verified Answers
A person must be a lawyer in order to serve as an arbitrator. T/F
False:
Lawyers, professors, and other professionals typically serve as arbitrators.
Under our system of justice, courts may issue advisory opinions. T/F
False:
The case-or-controversy (or justifiable controversy) requirement ensures that courts do
not render advisory opinions.
The defendant in a state action is entitled to transfer a case to the federal court if
there is concurrent jurisdiction.
T/F
True
Which of the following is not something that a joint venture and a partnership
have in common?
Both are created for an ongoing full business:
-Joint ventures differ from partnerships because they are usually created for making and
selling a single product, while a partnership creates a full ongoing business
Stakeholders of a business consist of many different groups of people who are
affected by the business's decisions.
T/F
True
What is the most imporatant duty that partners have to each other in a
partnership?
Fiduciary duty
-Perhaps the most important type of duty partners have toward one another is the
fiduciary duty. Partners must, in good faith, work for the benefit of the partnership. They
should not take any action that will undermine it, such as engaging in business that
competes with it
,Tom and his brother, Fred, create a plumbing business. They agree to share
control of the business, to work the same amount, and to split the profits equally.
What kind of business have they created?
A general partnership
-In a general partnership the partners divide the profits (usually equally) and the
management responsibilities and share unlimited personal liability for the firm's debts
Corporations have implied powers.
T/F
True
A(n) ________ is a corporation that has met the substantial elements of the
incorporation process
de jure corporation
-Courts usually hold that corporations that make minor errors in the incorporation
process still enjoy de jure corporate status
Victor and Kelley decide that they will jointly fund a new stadium being built in
their town. Neither Victor nor Kelley has enough money to complete this project
alone. Furthermore, these two people will not actually build the stadium, but will
provide the money necessary to support the project. What is this kind of
business arrangement called?
A syndicate
-An investment group that comes together for the explicit purpose of financing a specific
large project is a syndicate
Which of the following is not generally included in a franchise agreement?
The price at which the franchisee sells the goods
If the state of New York sues the state of New Jersey regarding who owns the
George Washington Bridge, the U.S. Supreme Court may serve as the trial court.
T/F
True
A corporation must be incorporated in the state in which it has its principal place
of business. T/F
, False:
Although most corporations incorporate in the state in which they are located and do
most of their business, more than half of all publicly held corporations, including more
than half of the Fortune 500 companies, are incorporated in Delaware.
A(n) ____________ is a review and listing of all partnership assets and/or profits
and typically lists the distribution of assets and profits to the partners
accounting:
Unless otherwise stated in the partnership agreement, a partner's rights include the right
to share in management, the right to share in profits, the right to compensation, property
rights, the right to inspect books, and the right to an accounting
A court must have several types of jurisdiction to decide any particular case. T/F
True
In some cases, the U.S. Supreme Court functions as a trial court. T/F
True
A corporation is considered alien in states in which it conducts business but is
not incorporated. T/F
False:
A corporation is considered foreign in states in which it conducts business but is not
incorporated.
The defendant in a state action is entitled to transfer a case to the federal court if
there is concurrent jurisdiction. T/F
True
Business managers should only consider customers when they engage in ethical
reasoning. T/F
False:
Business managers must consider all relevant stakeholders when they engage in
ethical reasoning.
Which of the following statements is false?
Corporations do not assume liability for corporate actions.
-Because corporations are legal entities separate from their shareholders, corporations
