Chapter 39- Merger, Consolidation and Termination1. Ace Tool Corporation and Best Hardware Company combine so that all that remains after the papers have been signed is Ace Tool Corporation. This is
a. a consolidation.
b. a merger.
c. a purchase of assets.
d. a purchase of stock.
ANSWER: B PAGE: 770 TYPE: N
2. Cafe Corporation plans to merge with Cream & Sugar, Inc. Before the merger, Cafe brought a suit against a rival firm for trademark infringement. After the merger
a. Cafe may continue the suit but any award will belong only to its previous shareholders.
b. Cafe may continue the suit but any award will belong to Cream & Sugar.
c. Cafe will cease to exist, and the court will order a default judgment.
d. Cream & Sugar may continue the suit.
ANSWER: D PAGE: 770 TYPE: =
3. First State Bank merges with Community Bank. Only First State Bank remains. . The terms of the merger agreement conflict with First State Bank's articles of incorporation. These articles of incorporation
a. block the merger.
b. do not block the merger and are deemed amended to include any differences.
c. do not block the merger but are replaced by Community Bank's bylaws.
d. do not block the merger but prevail over any conflicting terms.
ANSWER: B PAGE: 770 TYPE: =
4. First State Bank merges with Community Bank. Only First State Bank remains. Community Bank held certain rights in certain financial assets. After the merger, First State Bank
a. acquired all of the rights automatically.
b. acquired all of the rights only after completing certain statutory procedures.
c. did not acquire all of the rights unless this was part of the merger.
d. none of the above.
ANSWER: A PAGE: 770 TYPE: =
5. First State Bank merges with Community Bank. Only First State Bank remains. Community Bank owed money to creditors. After the merger, with respect to the debts, First State Bank is
a. not obligated to pay.
b. obligated to pay half.
c. obligated to pay only those incurred after the merger procedure began.
d. obligated to pay all.
ANSWER: D PAGE: 770 TYPE: N
6. Delta Corporation merges with Echo Corporation. It is agreed that Echo will absorb Delta. On merging
a. Delta will continue as the surviving corporation.
b. Echo will continue as the surviving corporation.
c. a new distinct corporation is formed.
d. both corporations are dissolved.
ANSWER: B PAGE: 771 TYPE: =
7. Ann files a suit against Beta Company. While the suit is pending, Gamma Corporation merges with Beta. Gamma absorbs Beta. After the merger, liability in the suit exists in
a. Ann.
b. Beta.
c. Gamma.
d. no one.
ANSWER: C PAGE: 771 TYPE: N
8. Candy Corporation has a right of action against Donna. Sweets, Inc., merges with Candy Corporation. Sweets absorbs Candy. After the merger, Candy's right of action against Donna can be exercised by
a. Candy.
b. Donna.
c. Sweets.
d. no one.
ANSWER: C PAGE: 771 TYPE: N
Fact Pattern 39-2 (Questions 9-11 apply)
9. First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. . Overseas Bank had certain rights in assets. After the consolidation, International Bank
a. acquired all of the rights automatically.
b. acquired all of the rights only after completing certain statutory procedures.
c. did not acquire all of the rights unless this was part of the consolidation.
d. none of the above.
ANSWER: A PAGE: 771 TYPE: =
10. First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. Overseas Bank owed money to creditors. International Bank is
a. obligated to pay the debts.
b. obligated to pay the debts only if creditors follow certain statutory procedures.
c. not obligated to pay the debts unless this was a term of the consolidation.
d. none of the above.
ANSWER: A PAGE: 771 TYPE: =
11. First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. The terms of the consolidation agreement conflict with First National Bank's articles of incorporation. These articles of incorporation
a. block the consolidation.
b. do not block the consolidation and are replaced by the articles of consolidation.
c. do not block the consolidation but are replaced by Overseas Bank's bylaws.
d. do not block the consolidation but prevail over any conflicting terms.
ANSWER: B PAGE: 771 TYPE: =
12. A merger between Able Corporation and Baker, Inc., can be expressed as Able + Baker =
a. Able.
b. Charlie Company.
c. Charlie Company = Delta Corporation.
d. none of the above.
ANSWER: A PAGE: 771 TYPE: =
Fact Patter 36-3 (Questions 13-15 apply)
13. Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. The formation of OXCorp is an example of
a. a consolidation.
b. a short-form merger.
c. a merger.
d. a liquidation.
ANSWER: A PAGE: 771 TYPE: =
14. Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. To accomplish this combination, which of the following procedures was not necessary?
a. Satisfaction of state formalities
b. Vote by the shareholders of Xantha
c. Vote by the shareholders of Omega
d. Submission of the proposal to the court for approval
ANSWER: D PAGE: 771 TYPE: =
15. Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. OXCorp assumes
a. the debts and assets of Xantha and Omega.
b. the assets only of Xantha and Omega.
c. the assets and debts of Xantha only.
d. the assets and debts of Omega only.
ANSWER: A PAGE: 771 TYPE: =
16. Office Company and Kappa Company wish to combine all assets, stock, and personnel into a new firm to be called OK Corporation. This is
a. a consolidation.
b. a merger.
c. an exchange of assets.
d. none of the above.
ANSWER: A PAGE: 771 TYPE: +
17. Best Goods, Inc., and Consumer Products Corporation plan to merge. The plan must be approved by
a. their boards of directors only.
b. their shareholders only.
c. their boards and their shareholders.
d. none of the above.
ANSWER: C PAGE: 772 TYPE: =
18. Digital Equipment Corporation and Electronics, Inc., plan to consolidate. The plan must be approved by
a. their boards of directors only.
b. their shareholders only.
c. their boards and their shareholders.
d. none of the above.
ANSWER: C PAGE: 772 TYPE: =
19. Fine Shops, Inc., and Great Stores Corporation plan to merge. A certificate of merger must be issued by
a. the state only.
b. the surviving corporation only.
c. the state and the surviving corporation.
d. none of the above.
ANSWER: A PAGE: 772 TYPE: =
20. Highway Trucking Company and Interstate Distribution Corporation plan to consolidate. A certificate of consolidation must be issued by
a. the state only.
b. the new corporation only.
c. the state and the new corporation.
d. none of the above.
ANSWER: A PAGE: 772 TYPE: =
21. Jersey Resorts, Inc., and Kaiser Hotel Corporation plan to merge. The articles of merger will be filed, most likely with
a. the county recording office.
b. the Internal Revenue Service.
c. the state secretary of state.
d. the U.S. Department of Justice.
ANSWER: C PAGE: 772 TYPE: =
22. Local Holding Corporation and Regional Investments, Inc., plan to consolidate. The articles of consolidation will be filed, most likely with
a. the county recording office.
b. the Internal Revenue Service.
c. the state secretary of state.
d. the U.S. Department of Justice.
ANSWER: C PAGE: 772 TYPE: =
23. For Macro Corporation to complete a short-form merger with its subsidiary, Micro Company, the merger must be approved by the board(s) of directors of
a. Macro only.
b. Micro only.
c. Macro and Micro.
d. none of the above.
ANSWER: A PAGE: 772 TYPE: N
24. Nora is a dissenting shareholder of Omega Company whose management is considering a tender offer by Power Products, Inc. Nora and Omega cannot agree on the fair value of the stock. The value will be determined by
a. a court.
b. Omega's directors.
c. Omega's other shareholders.
d. none of the above.
ANSWER: A PAGE: 773 TYPE: =
25. Sam is a shareholder of Top Goods, Inc., whose management is considering a tender offer by United Sales Corporation. If Sam elects to exercise his statutory appraisal rights, then he may not be able to
a. participate in shareholder votes.
b. receive dividends.
c. sue to block the tender offer.
d. all of the above.
ANSWER: D PAGE: 773 TYPE: =
- end of questions -
Chp. 36 - Partnerships - Bus. Law 2 Quiz1. Great Games, a firm that specializes in the research and development of computer games, is operated as a partnership. Much of the law that governs the operation of partnerships is based on principles of
a. agency law.
b. constitutional law.
c. contract law.
d. sales law.
> a. Partners are bound by the same fiduciary ties that bind an agent and principal under agency law. See Page 617 Rt. Col 1
2. Bill and Carol are the only partners in an accounting firm. Regarding bankruptcy, the partnership can be treated as
a. an aggregate.
b. an entity.
c. a partner.
d. none of the above.
answer: B PAGE: 710 TYPE
3, Greg starts up a print shop in a building owned by Marsha. Their lease agreement provides that Greg will pay Marsha a base monthly rental of $250, plus 30 percent of the month's profits. The term of the lease is two years. Greg hires Jordan to work at the customer service desk in the print shop. Greg agrees to pay her an hourly wage of $8.00 plus a commission equal to 10 percent of the profits. Jordan is to be paid twice a month. Greg and Jordan are
a. partners in a partnership for the term of the employment.
b. not partners, because Jordan does not have an ownership interest or management rights in Greg's print shop.
c. not partners, because Greg must pay an hourly wage in addition to a share of the profits.
d. not partners, because Jordan receives a "base wage" of $8.00 per hour.
> c. Again no inference of a partnership is made if the profits are received as payment of wages to an employee. See Page 618 Lft. Col 3
4. Greg starts up a print shop in a building owned by Marsha. Their lease agreement provides that Greg will pay Marsha a base monthly rental of $250, plus 30 percent of the month's profits. The term of the lease is two years. Greg and Marsha are
a. partners in a partnership for the term of the lease.
b. not partners, because Marsha does not have an ownership interest or management rights in Greg's print shop.
c. not partners, because of the lease requirement that Greg must pay a "base rental" in addition to a share of the profits.
d. none of the above.
> b. There are three essential elements of partnership, which are: sharing of profits and losses; joint ownership of the business; and equal rights in management of the business. See Page 618 Lft. Col 2
5. Bayside Restaurant is operated as a partnership. For tax purposes, Bayside
a. is required to file an information return but is not a tax-paying entity.
b. is a tax-paying entity.
c. pays 1/2 of the taxes if there are two partners.
d. pays 1/4 of the taxes if there are three partners.
> a. The partnership as an entity has no tax liability. It is an entity only for the filing of an information return with the Internal Revenue Service, indicating the profit or loss that each partner will report on his or her individual tax return. See Page 621 Lft. Col 3
6. Al and Betty agree while talking on the telephone to form a partnership. Their partnership agreement is legally binding
a. only if it is subsequently reduced to writing.
b. only if one of them gives valid consideration to the other.
c. without any further measures.
d. none of the above.
> c. Once two people agree to form a partnership, and there is the requisite intent to associate as a partnership, then that agreement is legally binding without any further measures. See Pages 617 Rt. Col s 3 and 4, and 621 Lft. Col 4
7. Kim, Lynn, and Mike agree to be partners in Northwest Tours, a travel agency. Kim contributes 75 percent of the capital. The part­ners agree to split the profits equally. When Northwest is dissolved, its liabilities are greater than its assets. The losses are paid by
a. Kim because he contributed most of the capital.
b. Lynn and Mike because they contributed the least of the capital.
c. all of the partners in proportion to their capital contributions.
d. all of the partners in proportion to their shares of the profits.
answer: D PAGE: 715 TYPE: +
8. Edward and Mark agree over the phone to go into business as partners. The fact that they have not yet reduced their agreement to a writing will
a. have no effect on the formation of their partnership.
b. prevent them from holding themselves out as partners.
c. violate the Statute of Frauds.
d. none of the above.
> a. As a general rule, agreements to form a partnership can be oral, written, or implied by conduct. See Page 621 Lft. Col 4
9.Doug and Erin are partners in Ace Athletic Supplies, which sells sports equipment. In general, a partner who devotes his time and energy to partnership business will
a. be entitled to compensation if he or she is an equity partner.
b. be entitled to compensation if the partnership agreement is silent.
c. not be entitled to compensation if the partnership agreement is silent.
d. none of the above.
answer: C PAGE: 715 TYPE: =
10.Derrick holds himself out as the managing partner of Wembley Group, a partnership, even though Derrick has no actual connection to Wembley. Derrick obtains a personal loan based on this misrepresentation. Derrick's default on the loan will result in
a. Derrick being held solely liable for the amount of the obligation.
b. the Wembley Group being held solely liable for the amount of the obligation.
c. Derrick and the Wembley Group being held jointly liable.
d. none of the above.
> a. The person representing himself or herself to be a partner in an actual or alleged partnership is liable to any third person who extends credit in good faith reliance on such representations. See Page 624 Lft. Col 2
11.Stacey, a partner in an architectural firm, owes $40,000 personally to several creditors. To satisfy these debts, the creditors may obtain a charging order entitling them to
a. Stacey's profits as a partner.
b. Stacey's interest in partnership assets if the firm dissolves.
c. both a and b.
d. none of the above.
> c. A charging order entitles the creditor's to the profits of the partner and to any assets available to the partner on dissolution. See Page 626 Lft. Col 1
12.Jill and Kay are partners in a mail-order business that is in the process of dissolution. Both want to keep a certain desk after the busi­ness is wound up. Jill
a. has no preference over Kay regarding the desk.
b. is entitled to the desk only if it was originally her idea to buy it.
c. is entitled to the desk only if she asked for it first.
d. is entitled to the desk only if she bought it with partnership funds.
answer: A PAGE: 716 TYPE: +
13.Emma is a partner in a dental firm and applies for a loan with First State Bank on behalf of the firm without the authorization of the other partners. If First State knows that Emma is not authorized to take out loans on be­half of the firm, then
a. Emma alone will be liable for repayment.
b. the partnership alone will be liable for repayment.
c. the partnership and Emma will be jointly liable for repayment .
d. the partnership and Emma will be jointly and severally liable for repayment.
answer: A PAGE: 717 TYPE: +
14. Ben is admitted to an existing partnership. Several debts and obligations incurred prior to the date of his admission become due. Ben is
a. personally liable for those debts and obligations.
b. liable for those debts and obligations only up to the amount of his capital contribution.
c. not required to contribute any money to the satisfaction of these debts and obligations.
d. none of the above.
> b. A new partner has limited liability for debts and obligations incurred prior to his or her admission. Only his or her capital contribution may be used to satisfy the debts or obligations. See Page 629 Rt. Col 1
15.Roberta and Joyce are photographers. Roberta wants to climb Mount Everest. Joyce wants to explore the Amazon River. They agree to form RJ Photography, a partnership, specifically to obtain the funds to finance their respective expeditions. RJ will be dissolved as soon as
a. the partners have obtained sufficient funds to pay for their expeditions.
b. Roberta has climbed Mount Everest.
c. Joyce has finished her exploration of the Amazon River.
d. either Roberta or Joyce has decided to cancel her expeditionary plans.
> a. When a partnership agreement expresses a particular business objective to be accomplished, the accomplishment of that objective dissolves the partnership.
16.Ira and Jeff are partners in Landsea Distributors, a firm that exports certain electronic equipment to a small country in Europe. When the United States government declares that the equipment is militarily sensitive and can no longer be exported, the partnership dissolves
a. as soon as Ira and Jeff agree that it is dissolved.
b. as soon as Ira and Jeff change their citizenship.
c. by operation of law unless Ira and Jeff decide to change the nature of their business and continue in the partnership.
d. none of the above.
>c. If the government declares that the equipment that Landsea Distributors exports is too sensitive militarily and can no longer be exported then the partnership is dissolved by operation of law, UNLESS the partners decide to change the nature of their business. See Page 631 Lft. Col 5
17.Roy and Rex form a partnership and state in their agreement that the surviv­ing partner shall continue the business of the partnership with the decedent part­ner’s estate. The sole asset of the partnership is a specialized hot-dog pushcart. Rex dies three years later. The partnership
a. continues to operate as provided by the agreement.
b. becomes a sole proprietorship.
c. is dissolved.
d. none of the above.
answer: C PAGE: 721 TYPE: =
18. Roy and Rex form a partnership and state in their agreement that the surviv­ing partner shall continue the business of the partnership with the decedent part­ner’s estate. The sole asset of the partnership is a specialized hot-dog pushcart. Rex dies three years later. One year later, the state legislature enacts a law prohibiting the sale of food from pushcarts. The partnership
a. continues to operate as provided by the agreement.
b. becomes a sole proprietorship.
c. is dissolved unless the partners change the nature of their business and continue the partnership.
d. none of the above.
answer: C PAGE: 721 TYPE: =
19. Pete and Andy sign a five-year partnership agreement. At the end of the fifth year, they decide to continue working together. This partnership will be terminable
a. at will by either partner.
b. only after the passage of an additional five-year term.
c. only if either partner withdraws from it.
d. none of the above.
> a. When a partnership agreement gives a fixed time, the passing of that time can dissolve the partnership. However, the partners can mutually agree to extend the partnership. If they agree to continue the partnership they become "partners at will". See Page 630 Rt. Col 1
20. Hans, Werner, and Erwin are partners in a computer peripherals company. Hans signed a contract with the same supplier prior to Werner’s decision. That contract is binding on
a. Hans and Erwin.
b. the partnership.
c. Hans only.
d. none of the above.
answer: B PAGE: 721 TYPE: =
21. Hans, Werner, and Erwin are partners in a computer peripherals company. Hans, Werner, and Erwin decide to dissolve their part­nership. Creditors of the partnership must
a. be notified by a newspaper announcement or similar public notice.
b. receive actual notice.
c. receive constructive notice.
d. none of the above.
answer: B PAGE: 721 TYPE:
22. Hans, Werner, and Erwin are partners in a computer peripherals company. Werner announces to his partners and the company’s creditors that he will no longer partici­pate in the business. The subsequent signing by Hans and Erwin of a contract with a sup­plier is binding on
a. Hans and Erwin.
b. the partnership.
c. Werner only.
d. none of the above.
answer: A PAGE: 721 TYPE: =
23.Omega Corporation and Peak Code, Inc., two software firms, wish to combine their research and development capabilities to make a special, limited edition computer game. The most appropriate legal en­tity for this project might be
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
ANSWER: C PAGE: 724 TYPE
|
24.Best Construction, Inc., and General Real Estate Corporation form a joint venture. A joint ven­ture is usually formed for
a. an implied duration of not more than six months.
b. a single activity or transaction.
c. a stated duration of not more than one year.
d. perpetual existence.
ANSWER: B PAGE: 724 TYPE:
25.Owen, Paula, Quinn, and Sara get together to finance the building of a shopping mall. Their selected form of business organization is an in­vestment group, or
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
ANSWER: D PAGE: 725 TYPE:
Không có nhận xét nào:
Đăng nhận xét