LEGL 2700 Roessing Final Exam Study Guide Questions and Answers Graded A
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Course
LEGL 2700
Institution
LEGL 2700
Members -Correct Answer The individuals or business entities that belong to a limited liability company
Benefit Corporation -Correct Answer a corporate form that requires directors to ensure that the corporation meets explicit social goals in addition to producing shareholder profits
Managers...
LEGL 2700 Roessing Final Exam Study Guide
Questions and Answers Graded A 2024-2025
Members -Correct Answer ✔The individuals or business entities that belong to a limited
liability company
Benefit Corporation -Correct Answer ✔a corporate form that requires directors to ensure
that the corporation meets explicit social goals in addition to producing shareholder
profits
Managers -Correct Answer ✔A person designated and charged with day-to-day
operations of a limited liability company
Organizer -Correct Answer ✔The parties responsible for bringing a limited liability
company into existence. These parties correspond to the functions of incorporators with
respect to corporations
Security -Correct Answer ✔An investment in which the investor does not participate in
management
Securities and exchange commission -Correct Answer ✔The federal administrative
agency that regulates the securities industry
Securities act of 1933 -Correct Answer ✔The federal law that regulates the initial sale of
securities to the public
Issuer -Correct Answer ✔The term in securities law for an individual or business
organization offering a security for sale to the public
Underwriter -Correct Answer ✔The party that, in securities law, guarantees the issuer
that the securities offered for sale will be sold
Controlling person -Correct Answer ✔The person who has the control of, or is controlled
by, the issuer of securities in securities laws
Seller -Correct Answer ✔In commercial law, a person who sells of contracts to sell
goods
Closely held -Correct Answer ✔An organization that is owned by only a few people
Publicly held -Correct Answer ✔A business organization that has hundreds, if not
thousands, of owners who can exchange their ownership interests on public exchanges
LEGL 2700 Roessing Final Exam
,LEGL 2700 Roessing Final Exam
Dissolution -Correct Answer ✔The cancellation of an agreement, thereby rescinding its
binding force.
Sole proprietorship -Correct Answer ✔The simplest form of business organization,
created and controlled by one owner
Partnership -Correct Answer ✔A business organization involving two or more persons
agreeing to conduct a commercial venture while sharing its profits and losses
Articles of partnership -Correct Answer ✔Another name for a formally drafted
partnership agreement
Assumed-name statute -Correct Answer ✔A state law that requires partners to make a
public filing of their identities if their partnership operates under a name that does not
reveal the partners' identities
Buy and sell agreement -Correct Answer ✔A contract, usually among partners, but
perhaps among shareholders, wherein one party agrees to but the ownership interest
held by another party or the first party agrees to sell such an interest to the other party.
These contractual provisions help provide for a transition of owners without harming the
business of the organization
Jointly and severally liable -Correct Answer ✔The legal principle that makes two or
more people, usually partners, liable for an entire debt as individuals or in any
proportional combination
Corporation -Correct Answer ✔An artificial, but legal, person created by state law
Domestic Corporation -Correct Answer ✔A business organization created by the
issuance of a state charter that operates in the state that issued the charter
Foreign Corporation -Correct Answer ✔A business organization, created by the
issuance o a state charter, that operates in states other than the one issuing the charter
Alien Corporation -Correct Answer ✔A corporation created under the authority of a
foreign country
Charter -Correct Answer ✔The legal document issued by a state when creating a new
corporation
Incorporators -Correct Answer ✔Those individuals who are responsible for bringing a
corporation into being
LEGL 2700 Roessing Final Exam
,LEGL 2700 Roessing Final Exam
Articles of incorporation -Correct Answer ✔The legal document that forms the
application for a state charter of incorporation
Shareholders -Correct Answer ✔The owners of corporations
Directors -Correct Answer ✔Those individuals who are elected by the shareholders to
decide the goals and objectives for the corporate organization
Officers -Correct Answer ✔Those individuals appointed by directors of a corporation to
conduct that daily operations of the corporate organization
Proxy -Correct Answer ✔The legal document whereby a shareholder appoints an agent
to vote the stock at a corporation's shareholders' meeting
Derivative suit -Correct Answer ✔A lawsuit filed by one or more shareholders of a
corporation against that organization's management. This suit is brought to benefit the
corporation directly and its shareholders indirectly
Limited personal liability -Correct Answer ✔This term is used to describe the exposure
of business owners to pay the debts of their businesses when such exposure does not
exceed the owner's investment in the business
Piercing the corporate veil -Correct Answer ✔The legal doctrine used by courts to
disregard the existence of a corporation, thereby holding the shareholders personally
liable for the organization's debts
Alter-ego theory -Correct Answer ✔One method used by courts to pierce the corporate
veil when a shareholder fails to treat the corporate organization as a separate legal
entity
Double tax -Correct Answer ✔A disadvantage of a corporate firm of organization in that
the corporation must pay a tax on the money earned and the shareholder pays a
second tax on the dividends distributed
Limited partners -Correct Answer ✔Those owners of a limited partnership who forgo
control of the organization's operation in return for their liability being limited to the
amount of their investment
General partners -Correct Answer ✔The owner of a limited partnership that enjoys the
control of the partnership's operation. This type of partner is personally liable for the
debts of the limited partnership.
LEGL 2700 Roessing Final Exam
, LEGL 2700 Roessing Final Exam
S corporations -Correct Answer ✔A business organization that is formed as a
corporation but, by a shareholders' election, is treated as a partnership for taxation
purposes
Limited liability company -Correct Answer ✔A type of business organization that has
characteristics of both a partnership and a corporation
Limited liability partnership -Correct Answer ✔A hybrid business partnership
Articles of orgnizations -Correct Answer ✔The document used to create a limited liability
company.
Organizers -Correct Answer ✔The parties responsible for bringing a limited liability
company into existence
Registration statement -Correct Answer ✔The legal document required to be filed with
the Securities and Exchange Commission prior to securities being offered for sale to the
public
Prefilling period -Correct Answer ✔As it relates to an initial public offering of securities,
this is that period of time prior to the filing of a registration statement with the SEC
Waiting period -Correct Answer ✔As it relate to an initial public offering of securities, this
is the period of time that follows the filing of documents with the SEC and that precedes
when the securities can be sold
Tombstone ads -Correct Answer ✔An advertisement announcing the public offering of
securities
Posteffective period -Correct Answer ✔As it relates to an initial public offering of
securities, this is the period during which the securities may be sold
Prospectus -Correct Answer ✔The legal document required by the 1933 Securities Act
to be made available to potential purchasers of securities
Due diligence defense -Correct Answer ✔A defense that experts may assert in a 1933
Securities Act case involving the failure to register securities or the failure to provide
accurate documents
Securities exchange act of 1934 -Correct Answer ✔The federal law that regulates sales
of securities
Short-swing profits -Correct Answer ✔The proceeds gained by an insider buying and
selling, or vice versa, securities within a six-month time period
LEGL 2700 Roessing Final Exam
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