LAW531 LAW/531 WEEK 1 QUIZ (SCORE 100%) - 75923

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1. When parties agree in advance to adhere to an arbitrator’s decision and award, it is known as 2. Which of the following is true of a corporation? 3. Martha started a flower shop as a sole proprietor. After 1 year, she was forced to close the shop because business was so bad. At that time, the business assets totaled $50,000, but the business liabilities totaled $125,000. Which of the following statements is true? 4. Which of the following is true of The Federal Arbitration Act? 5. Which of the following is true about the choice of business entity for an entrepreneur? 6. Which of the following is true regarding mediation? 7. Which of the following is true in the creation of a general partnership? 8. Which form of alternative dispute resolution occurs when the parties choose an impartial third party to hear and decide their dispute? 9. The Black Squirrel limited partnership has been in operation for many years, but has recently fallen on hard times. The partners have decided to dissolve, although there are few assets remaining in the partnership. Shortly after the partnership filed its certificate of limited partnership, the partners had the foresight to incorporate into their partnership agreement a provision that, in the event of dissolution, the assets would be distributed in payment of claims first to limited partners, then to general partners, then to creditors. Hilda is a limited partner and feels relieved that she will receive at least a portion of her capital. Henry, one of the general partners, said that this provision is void and unenforceable. Which of the following best describes this situation? 10. What is the effect of having a corporation as the general partner of a limited partnership? 11. Which type of business formation is typically reserved for professionals such as accountants, lawyers, and doctors? 12. Which of the following is true of arbitration? 13. Which of the following is one of the major purposes of a settlement conference? 14. George has served Mary with a complaint alleging breach of contract. Mary has never been sued before and as such, she seeks your advice on what to do with the complaint. You advise that she 15. Fred and Ginger are general partners in a business. They decide to purchase a building for the partnership. Ginger will put up the money for the building, and Fred will complete the remodeling. While inspecting the building, Fred is informed that the building is packed full of asbestos. He fails to tell Ginger of the presence of the substance. They buy the building and go into business. During the remodeling of the building, people from the neighborhood begin complaining about the dust from the building. Some of them even threaten to sue. Who is liable? 16. There are two general partners, each of whom contributes $5,000 in capital to a limited partnership. There are two limited partners, each of whom contributes $20,000. The total amount of capital contributed is $50,000. The limited partnership agreement does not stipulate how profits and losses are to be allocated. Assume that the limited partnership makes $300,000 in profits. Under the Revised Uniform Limited Partnership Act (RULPA), how much would each partner receive?
Solution Description

1. When parties agree in advance to adhere to an arbitrator’s decision and award, it is known as

binding arbitration

appealable

arbitrator discretion

mediation

2. Which of the following is true of a corporation?

Corporation shareholders are subject to unlimited personal liability.

Corporation owners are only taxed once on earnings.

A corporation terminates upon the death of an owner.

A corporation is a separate legal entity.

3. Martha started a flower shop as a sole proprietor. After 1 year, she was forced to close the shop because business was so bad. At that time, the business assets totaled $50,000, but the business liabilities totaled $125,000. Which of the following statements is true?

Martha’s business creditors can collect only the $50,000 of business assets.

Martha’s business creditors can collect only the $50,000 now, but if Martha ever goes into business again, they can get the assets of the new business.

Once Martha terminates the sole proprietorship, she is no longer liable for the $50,000.

Martha is personally liable for the additional $75,000 owed to business creditors.

4. Which of the following is true of The Federal Arbitration Act?

It permits an appeal for all arbitration awards.

It provides that arbitration agreements are valid, irrevocable, and enforceable.

It governs all types of alternative dispute resolution.

It applies only to breach of contract disputes.

5. Which of the following is true about the choice of business entity for an entrepreneur?

 The choice is deter

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