10.______ A General Partnership, as an entity, must:

a. pay income taxes based on the partnership profit.

b. file an informational tax return, and pass the obligation to pay the taxesthrough to the partners, individually.

c. pay income taxes at the corporate income tax rated.

d. neither report profit/loss, nor pay any income taxes.

11.______ Unless otherwise specified in the General Partnership agreement,

a. profits are distributed in relation to hours worked

b. profits are not distributed

c. profits are shared equally among the partnersd.

d. profits are classified as retained earnings

21._____ The Board of Directors of Microsoft, a corporation, voted to distribute after tax profits of the corporation, to its shareholders. This type of distribution is a:

a. merger

b. derivative

c. dividend

d. quorum

22._____ Officers , as agents of a corporation owe to the corporation and its shareholders, both the Duty of Loyalty, and the Duty of Care. Which of the following actions may constitute a violation of the Duty of Loyalty:

a. cheating the corporation on personal expenses

b. engaging in competition with the corporation

c. taking a corporate business opportunity for themself

d. all of the above

23._____ Tom owns ABC Sales, a sole proprietorship. Tom's potential liability for debts of the business is

a. unlimited

b. limited to the amount of his initial investment, plus any profits

c. limited by statute

d. limited to the amount of his initial investment

24._____ A Judgement entered in Court against a Sole Proprietorship can be collected from which of the following sources:

a. assets of the sole proprietor

b. assets of the owner, which he earned from the operation of the business

c. assets of the owner, which he acquired before starting the business

d. all of the above

12.______ In the State of Illinois, corporations are organized and regulated by:

a. the Clerk of the Court

b. the Secretary of State.

c. the County Clerk.

d. the Secretary of Financial Institutions.

13.______ Which of the following is normally considered an Agent of a corporation, with the authority to enter into contracts on behalf of the corporation:

a. Officer

b. Shareholder

c. Director

d. Certified Public Accountant

14.______ In agency law, the phrase Fiduciary Relationship means:

a. there exists an employment contract

b. there exists a purchaser/seller relationship

c. there exists a relationship involving trust and confidence

d. the relationship is irrelevant

15._____ Every corporation must identify which of the following to receive legal documents and service of summons on behalf of the corporation:

a. Chief Executive Officer

b. Secretary of State

c. Enrolled Agent

d. Registered Agent

30._____ Generally shareholders of a corporation, like Ronald Hochberg, would enjoy limited liability for the debts and obligations of the corporation. However, if the shareholders misuse the corporation for improper purposes, or fail to follow the requirements, as Hochberg did here, then a Court may disregard the corporate entity, and hold the shareholder personally liable under a doctrine commonly referred to as:

a. cumulative voting

b. preemptive rights

c. piercing the corporate veil

d. long arm statute

31._____ George and Martha formed White House Moving, Incorporated. WHM, Inc. has twoshareholders, three Directors, a President, Secretary and Treasurer. Generally, broad policy making decisions of WHM, Inc. would be made by the:

a. shareholders

b. registered agent

c. board secretary

d. board of directors

32._____ The Directors of WHM, Inc. would be elected by the:

a. board of directors

b. shareholders

c. board secretary

d. registered agent5

33._____ Common Shareholders of an Illinois Business Corporation possess which of the following rights?

a. the right to implement reasonable business decisions

b. the right to vote for the Board of Directors

c. the right to employ officers

d. the right to enter into contracts on behalf of the corporation

34._____ A corporation whose shares are traded in securities markets, like the New York Stock Exchange or the NASDAQ, are generally referred to as:

a. Private corporation

b. Limited liability company

c. Publicly traded corporation

d. Limited liability partnership