BLAW 3310 Test 3 -Schwemer Study
Guide with Actual Detailed Answers
2025-2026 Updated.
CHAPTER 12 - Answer
LLC and Personal Liability - Answer No member or manager is personally liable for all debts.
Piercing the corporate veil - 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 - 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 - Answer No state filing needed; is created when two or more partners
agree to form. Low startup cost.
Limited Partnership - Answer Only general partners have management capabilities; other
partners have limited liability.
Limited Liability Partnership - Answer LP created by professional businesses such as dentists
or attorneys.
Things that shareholders vote on - 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 - Answer Unlimited Liability
Things partners have to agree on - Answer Mergers, dissolution, adding new partners, major
business decisions
Business judgement rule - Answer Makes directors and managers of corporations immune
, Proxy - Answer A written authorization by shareholders to cast their votes, so that they do
not have to show up in person.
CHAPTER 13 - Answer
The party that is paid is the _______ - Answer Payee
How many parties are on promissory notes? - Answer Two: The maker and the payee
Bill of Exchange - Answer International Draft
Sight Draft - Answer Draft that requires immediate payment
Suretyship - Answer A guarantee that debts will be paid, often given by a third party. The
third party (surety) agrees to pay if the debtor will not.
A guarantor is a third party that may only be obligated to pay under certain circumstances.
Floating Lien - Answer A security interest in a group of property that remains in place even
after the exact items in that group of property change
Mortagor - Answer Debtor
Mortgagee - Answer Creditor
Who is able to file for Chapter 13 bankruptcy? - Answer Individuals
Debts you can't get out of when you declare bankruptcy - Answer o Alimony and child
support payments
o Back taxes
o Most student loans
o Some debts incurred immediately before filing bankruptcy
Guide with Actual Detailed Answers
2025-2026 Updated.
CHAPTER 12 - Answer
LLC and Personal Liability - Answer No member or manager is personally liable for all debts.
Piercing the corporate veil - 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 - 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 - Answer No state filing needed; is created when two or more partners
agree to form. Low startup cost.
Limited Partnership - Answer Only general partners have management capabilities; other
partners have limited liability.
Limited Liability Partnership - Answer LP created by professional businesses such as dentists
or attorneys.
Things that shareholders vote on - 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 - Answer Unlimited Liability
Things partners have to agree on - Answer Mergers, dissolution, adding new partners, major
business decisions
Business judgement rule - Answer Makes directors and managers of corporations immune
, Proxy - Answer A written authorization by shareholders to cast their votes, so that they do
not have to show up in person.
CHAPTER 13 - Answer
The party that is paid is the _______ - Answer Payee
How many parties are on promissory notes? - Answer Two: The maker and the payee
Bill of Exchange - Answer International Draft
Sight Draft - Answer Draft that requires immediate payment
Suretyship - Answer A guarantee that debts will be paid, often given by a third party. The
third party (surety) agrees to pay if the debtor will not.
A guarantor is a third party that may only be obligated to pay under certain circumstances.
Floating Lien - Answer A security interest in a group of property that remains in place even
after the exact items in that group of property change
Mortagor - Answer Debtor
Mortgagee - Answer Creditor
Who is able to file for Chapter 13 bankruptcy? - Answer Individuals
Debts you can't get out of when you declare bankruptcy - Answer o Alimony and child
support payments
o Back taxes
o Most student loans
o Some debts incurred immediately before filing bankruptcy
