THC LEGAL ASPECTS QUIZ 2

1. What is the essential characteristic of a partnership?

• A. A contract involving two or more corporations

• B. A relationship created by operation of law

• C. A contract where two or more persons bind themselves to contribute money property, or industry to a common fund

• D. A limited liability arrangement similar to a corporation

Which of the following is NOT an essential element of a partnership?

• A. Contribution of money, property, or industry

• B. Intent to divide profits and losses

• C. Registration with the Securities and Exchange Commission

• D. Existence of lawful object or purpose

A partnership may be constituted in any of the following forms EXCEPT:

• A. Oral agreement

• B. Written contract

• C. Public instrument when immovable property is contributed

• D. Corporate charter

Which type of partnership exists even without express agreement, due to the conduct of the parties?

• A. Universal partnership

• B. De jure partnership

• C. De facto partnership

• D. Partnership by estoppel

When does a partnership begin to exist?

• A. Upon notarization of the partnership contract

• B. Upon SEC registration

• C. Upon mutual agreement between partners

• D. Upon execution of the Articles of Partnership

What is the maximum term of existence of a corporation under the new law?

• A. 25 years, renewable

• B. 50 years, renewable

• C. Indefinite unless otherwise stated

• D. 75 years fixed

What vote is generally required to amend the Articles of Incorporation?

• A. Majority of the board only

• B. Two-thirds (2/3) of the stockholders or members

• C. Three-fourths (3/4) of the board

• D. Unanimous consent of all incorporators

Who exercises corporate powers in a corporation?

• A. Shareholders only

• B. Board of Directors or Trustees

• C. Corporate Secretary

• D. General Manager

Which of the following is TRUE about shareholders or stockholders?

• A. They are personally liable for the corporation’s debts

• B. They are automatically entitled to manage the corporation

• C. They have a proprietary interest in the corporation

• D. They can act as corporate officers without appointment

In which situation may a stockholder be held personally liable for corporate obligations?

• A. When he/she fails to attend board meetings

• B. When the corporate veil is pierced due to fraud or bad faith

• C. When the stockholder owns 50% or more of shares

• D. When dividends are not declared