Chapter 41

1. An LLC combines the tax advantages of a partnership with the limited liability of a ________.

• Sole Proprietorship

• Corporation

• General Partnership

• Non-profit Organization

1. In a Limited Partnership, if the general partner declares bankruptcy, what is the liability of the limited partners?

• Unlimited liability for all debts

• Liability limited to their investment

• Personal liability for the general partner's debts

• No liability as the partnership is dissolved

The personal assets of shareholders in a joint stock company are at risk in the event of the company's debts.

• True

• False

1. Which of the following is NOT a way a corporation can be dissolved voluntarily?

• By a unanimous shareholder vote

• By a court order

• By a proposal from the board of directors

• By the expiration of the incorporation period

1. During the winding-up process of a corporation, what happens to the corporate assets?

• They are donated to charity.

•  They are divided equally among the shareholders.

• They are converted into cash and distributed according to specific rules.

• They are kept by the board of directors.

1. What is the purpose of notifying creditors during a corporate dissolution?

• To inform them of the company's financial situation.

• So they can vote on the dissolution.

• To allow them to file claims for payment owed by the corporation.

• To offer them first dibs on purchasing company assets.

1. A merger involves the legal combination of two or more corporations. After a merger, both corporations continue to exist.

• True

• False

The results of a consolidation are the same as those of a merger.

• True

• False

If shareholders are not unwilling to become shareholders in a corporation that is new or different from the one in which the shareholder originally invested, they have the right to 

• 1. be paid the fair value of the shares

• 1. Be compensated

• 1. Receive the additional benefits

When is shareholder approval most likely required for a corporation purchasing assets with stock? (Choose 2)

• 1. Whenever the corporation pays for assets with stock

• Only if there are not enough authorized unissued shares available

• Only if the acquiring corporation's stock is traded on a national stock exchange

• Both a and c