USF BUL 3320 EXAM 4 FINAL
QUESTIONS AND ANSWERS
Board of directors - answer- a panel of people elected by shareholders to make
policy decisions concerning the operation of a corporation
Corporate officers - answer- Employees of a corp who are appointed by the board of
directors to manage the day-to-day operations of the corp
Limited liability of shareholders - answer- a general rule of corporate law that
provides that generally, shareholders are only liable to the extent of their capital
contributions for the debts and obligations of the corporation and are not personally
liable for the debts and obligations of the corporation
Corporate Bylaws - answer- A detailed set of rules adopted by the board of directors
after the corp is incorporated. They contain provisions for managing the business
and the affairs of the corporation. They govern internal management structure. They
may be amended by the board of directors
Corporate seal - answer- a design that contains the name of the corp and the date of
incorporation
Limited Liability Company (LLC) - answer- Unincorporated business entity that
combines the most favorable attributes of general partnerships, limited partnerships,
and corporations. It is a separate legal entity.
Member - answer- Owner of an LLC
Taxation of LLC's - answer- taxed as partnership, unless it elects to be taxes as a
corporation. Income or losses flow through the members individual income tax
returns
Powers of an LLC - answer- Same powers as an individual to do all things necessary
or convenient to carry on its business affairs
Formation of an LLC - answer- Certificate of Interest: Document demonstrates
evidence of a member's ownership interests in an LLC
At Will LLC - answer- LLC has no specified term ofduration
Term LLC - answer- LLC with specified term of duration
Liability of an LLC - answer- Liable for any loss or injury caused to anyone as a
result of a wrongful act or omission by a member, a manager, an agent, or an
employee of the LLC while acting within the ordinary course of business of the LLC
, Limited Liability of members of LLC's - answer- limited to the extend of their capital
contributions
Member-Managed LLC - answer- members do not designate managers to manage
the LLC. The LLC is managed by its members. All members have agency authority
to bind the LLC to contracts
Manager-Managed LLC - answer- members appoint certain members or
nonmembers to manage the LLC. nonmanager members have no right to manage
the LLC. Only the managers have authroity to bind the LLC to contracts
Ethics - answer- A set of moral principles or values that governs the conduct of an
individual or group
Major Theories of Business Ethics - answer- Ethical Fundamentalism, Utilitarianism,
Rawl's Social Justice Theory, Ethical Relativism, Kantian Ethics
Ethical Fundamentalism - answer- A person looks to an outside source or a central
figure for ethical rules or commands. (Example: The Bible, a Religious Leader, etc)
Does not permit people to determine right or wrong for themselves
Utilitarianism - answer- People must choose the action or follow the rule that
provides the greatest good to society. Originates in the works of Bentham and
Stuart. Has been criticized because it is hard to apply, treats morality as impersonal
calculation, and its hard to estimate the good that will result from different actions.
Kantian Ethics - answer- A person owes moral duties based on universal rules of
Consistency (all cases treated alike w/ no exceptions) and Reversibility (actor must
abide by the rule he or she uses to judge the morality of someone else's conduct)
Critics argue that it is hard to reach a consensus as to what the universal rules
should be.
Rawl's Social Justice Theory - answer- A person has a social contract w/ all others in
society to obey moral rules necessary for people to live in peace and harmony.
Origins in work of Locke and Rousseau. Principles of justice should b chosen by
persons who do not yet know their position in society, this ignorance would permit
fairest principles to be selected. Critics argue establishing the blind "original
position": for choosing moral principles is impossible in reality, and man people
would choose not to maximize the benefit to the least advantaged.
Ethical Relativism - answer- A person must decide what is ethical based on their own
feelings of right or wrong. No universal ethical rules to guide conduct. Critics are that
actions widely regarded as unethical would be seen as ethical to some depending on
different viewpoints.
Social Responsibilty of Business - answer- Corps and businesses would act with
awareness of the consequences and impact that their decisions will have on others.
Corps and businesses owe some responsibility for their actions
QUESTIONS AND ANSWERS
Board of directors - answer- a panel of people elected by shareholders to make
policy decisions concerning the operation of a corporation
Corporate officers - answer- Employees of a corp who are appointed by the board of
directors to manage the day-to-day operations of the corp
Limited liability of shareholders - answer- a general rule of corporate law that
provides that generally, shareholders are only liable to the extent of their capital
contributions for the debts and obligations of the corporation and are not personally
liable for the debts and obligations of the corporation
Corporate Bylaws - answer- A detailed set of rules adopted by the board of directors
after the corp is incorporated. They contain provisions for managing the business
and the affairs of the corporation. They govern internal management structure. They
may be amended by the board of directors
Corporate seal - answer- a design that contains the name of the corp and the date of
incorporation
Limited Liability Company (LLC) - answer- Unincorporated business entity that
combines the most favorable attributes of general partnerships, limited partnerships,
and corporations. It is a separate legal entity.
Member - answer- Owner of an LLC
Taxation of LLC's - answer- taxed as partnership, unless it elects to be taxes as a
corporation. Income or losses flow through the members individual income tax
returns
Powers of an LLC - answer- Same powers as an individual to do all things necessary
or convenient to carry on its business affairs
Formation of an LLC - answer- Certificate of Interest: Document demonstrates
evidence of a member's ownership interests in an LLC
At Will LLC - answer- LLC has no specified term ofduration
Term LLC - answer- LLC with specified term of duration
Liability of an LLC - answer- Liable for any loss or injury caused to anyone as a
result of a wrongful act or omission by a member, a manager, an agent, or an
employee of the LLC while acting within the ordinary course of business of the LLC
, Limited Liability of members of LLC's - answer- limited to the extend of their capital
contributions
Member-Managed LLC - answer- members do not designate managers to manage
the LLC. The LLC is managed by its members. All members have agency authority
to bind the LLC to contracts
Manager-Managed LLC - answer- members appoint certain members or
nonmembers to manage the LLC. nonmanager members have no right to manage
the LLC. Only the managers have authroity to bind the LLC to contracts
Ethics - answer- A set of moral principles or values that governs the conduct of an
individual or group
Major Theories of Business Ethics - answer- Ethical Fundamentalism, Utilitarianism,
Rawl's Social Justice Theory, Ethical Relativism, Kantian Ethics
Ethical Fundamentalism - answer- A person looks to an outside source or a central
figure for ethical rules or commands. (Example: The Bible, a Religious Leader, etc)
Does not permit people to determine right or wrong for themselves
Utilitarianism - answer- People must choose the action or follow the rule that
provides the greatest good to society. Originates in the works of Bentham and
Stuart. Has been criticized because it is hard to apply, treats morality as impersonal
calculation, and its hard to estimate the good that will result from different actions.
Kantian Ethics - answer- A person owes moral duties based on universal rules of
Consistency (all cases treated alike w/ no exceptions) and Reversibility (actor must
abide by the rule he or she uses to judge the morality of someone else's conduct)
Critics argue that it is hard to reach a consensus as to what the universal rules
should be.
Rawl's Social Justice Theory - answer- A person has a social contract w/ all others in
society to obey moral rules necessary for people to live in peace and harmony.
Origins in work of Locke and Rousseau. Principles of justice should b chosen by
persons who do not yet know their position in society, this ignorance would permit
fairest principles to be selected. Critics argue establishing the blind "original
position": for choosing moral principles is impossible in reality, and man people
would choose not to maximize the benefit to the least advantaged.
Ethical Relativism - answer- A person must decide what is ethical based on their own
feelings of right or wrong. No universal ethical rules to guide conduct. Critics are that
actions widely regarded as unethical would be seen as ethical to some depending on
different viewpoints.
Social Responsibilty of Business - answer- Corps and businesses would act with
awareness of the consequences and impact that their decisions will have on others.
Corps and businesses owe some responsibility for their actions
