Business Organizations and New York State Law Questions

PART I: Multiple Choice Questions 1 through 24 1        One individual may own the following business entity(ies): a)      limited liability company, C corporation, and S corporation b)      C corporation and S corporation, but not a limited liability company c)      S corporation only                                                                                    d)      neither the limited liability company, nor the C corporation, nor the S corporation   2        The following business entity(ies) enjoys/enjoy pass-through taxation status:  a)         general partnership only b)         limited partnership only c)         neither the general partnership nor the limited liability partnership d)         both the general partnership and the limited liability partnership   3        May an individual work for a corporation as an independent contractor and not as an employee:

1. Yes, a corporation is a person under the law and could hire whomever it pleases. 
2. Yes, a corporation is a person under the law, but needs pre-approval from the IRS to classify someone as an independent contractor.
3. Yes, but only if the individual works for the corporation alone and not for any other  companies during her term of employment with the corporation;
4. A corporation may not hire independent contractors to do work for the corporation. 

  4        A business entity where the owners have unlimited personal liability is:       a)  both sole proprietorship and general partnership       b)  sole proprietorship only        c)  neither the sole proprietorship nor the S corporation       d)  both the sole proprietorship and the C corporation   5        Adam is CEO of Eve’s Apple, Ltd.  When acting for “Apple” in the ordinary course of business, Adam is

1. Agent only;
2. Agent and Principal;
3. Principal Only;
4. Neither.

  6         Cal employs Daily Employment Agency as an agent under a written agreement that describes 7        the rights and duties of both parties. This is 8        Select one: 9        a. apparent authority. 10    b. equal authority. 11    c. express authority.  12    d. implied authority. 13    Cal employs Daily Employment Agency as an agent under a written agreement that describes 14    the rights and duties of both parties. This is 15    Select one: 16    a. apparent authority. 17    b. equal authority. 18    c. express authority.  19    d. implied authority. 20    Cal employs Daily Employment Agency as an agent under a written agreement that describes 21    the rights and duties of both parties. This is 22    Select one: 23    a. apparent authority. 24    b. equal authority. 25    c. express authority.  26    d. implied authority.        6   Aniella employs Legal Staffing, Inc. under  written agreement that describes the rights and duties of both parties.  This is: a)      apparent authority; b)      ratified authority; c)      express authority; d)      implied authority.        7     Nerds, Inc. employs Poindexter as its agent. During the agency, Poindexter learns new             skills: he is taught how to use Excel.  After termination of the agency, Josh uses those             new Excel skills in a new job.  Josh has breached:             a)         no duty;             b)         duty of loyalty;             c)         duty of confidentiality;             d)         duty to act in the best interest of the Principal.   8          By-laws are developed for                                                                                                                  a)  limited liability companies;                                                                                        b)  all corporations;                                                                                                                                                    c)  only C corporations;                                                                                                          d)  none of the above   9          Jordan and Justin are partners in a real estate investment group. Jordan  invests $500,000 of his own money to acquire properties for the general partnership. Justin invests no money, but provides his labor only.  Justin handles the real estate transactions. Justin makes some bad deals and now the group owes $800,000 in delinquent mortgage payments. Jordan can be held personally liable for:             a)         $400,000;             b)         $800,000;             c)         $0.00;             d)         only for the portion of the $800,000 that he approved.   10        Jordan and Justin are partners in a real estate investment group. Jordan  is the limited partner and invests $500,000 of his own money to acquire properties for the limited partnership.  Justin invests no money, but provides his labor only.  Justin handles the real estate transactions. Justin makes some bad deals and now the group owes $800,000 in delinquent mortgage payments. Justin can be held personally liable for:             a)         $400,000;             b)         $800,000;             c)         $0.00;             d)         only for the portion of the $800,000 that he approved.   11        Same scenario as #10, but answer the question in connection with Jordan’s liability.            12        A difference between a C corporation and an S corporation is:                                                         a)   only the S corporation is considered a “person” under the law;                                                        b)   only the C corporation is responsible for its own corporate debts;                                          c)   the C corporation issues stock certificates, while the S corporation does not;                          d)   none of the above. 12        Who is/are agent(s) of a general partnership?                                    a)         only the partners;                                                                                b)         neither partner; c)         only the employees;                                                                            d)         the partners and the employees   13        A form of business entity that is authorized to transact business regardless of the number of owners is                                    a)         corporation;                                                     b)         general partnership;                                                                             c)         sole proprietorship;     d)         none of the above.   14        Afran & Russo, P.C is:                                                                                                                        a)            a professional corporation, whose president is a phenomenal teacher;                      b)         a professional corporation, whose president is the most annoying person on earth;    c)         a professional corporation of dancers;                                                                                   d)         is not a professional corporation at all. 15        An employer identification number may be obtained from:              a)         only the IRS;                                                                                       b)         only the county clerk in which the business operates;            c)         only the NYS Department of State;                                        d)         either the IRS or NYS Department of Taxation and Finance.   16        Love me, Corp. wants to amend its bylaws.  More work for you.  You draft the amended bylaws, and your boss is very happy with drafting because your grammar is impeccable.  Your boss tells you to file the amended bylaws with the New York Secretary of State.   The following is true:                                   a)         The amendment to the bylaws is placed in the corporate minute book, but not  filed with the Secretary of State.                                         b)         The amendment to the bylaws is filed with the Secretary of State and placed in the corporate minute book.                                         &...