Business Structure - Formation Operations Terminations

Question 1

Corporate Debt Securities

Answer 1

Debenture Bonds (unsecured debt)
Convertible Bonds (turns into stock)

Question 2

A LLC’s operating agreement

Answer 2

1) Spells out the activities of the LLC

2) Assists in resolving member disputes

Question 3

During a merger

Answer 3

One company is responsible for the debts of another

Question 4

A merger requires

Answer 4

formal plan of merger that is approved by both the board of directors and the shareholders of both corporations

Question 5

A partnership

Answer 5

1) is a voluntary legal relationship to carry on business.
2) It is not a separate legal entity.
3) However, it is a legal entity for workers’ compensation purposes

Question 6

A general partnership

Answer 6

can legally dissolve without filing with the state

Question 7

What does a corporation need to do to dissolve?

Answer 7

1) Recommend a dissolution to the shareholders

2) Majority vote by the shareholders

Question 8

Partnership distribution order upon dissolution

Answer 8

1) Amounts owed partners for loans
2) Partners’ capital accounts
3) Amounts owed partners with respect to profits

Question 9

Discharge of a partnership

Answer 9

1) does not discharge the personal liability of partners for unpaid obligations of the partnership
2) each partner continues to have the apparent authority to make contracts unless both actual and constructive notice of the dissolution is given by the partnership