1. Someone who is authorized to act on behalf of another is generally known as a(n):

a. agent.

b. independent contractor.

c. employee.

d. surety.

e. principal.

2. Which of the following is true regarding the history of corporations?

a. Corporations were first formed in the United States shortly after the United States gained independence from Great Britain.

b. Corporations were first formed in medieval Europe.

c. Corporations were first formed in Germany in the 1800's.

d. Corporations were first formed in Spain in the1800's.

e. Corporations were first formed in England between 1900 and 1910.

3. The purpose of a proxy is to:

a. allow a shareholder to transfer shares to another.

b. allow a shareholder to place shares in trust.

c. allow a shareholder to assign his/her right to vote.

d. allow a shareholder to assign his/her dividends to another.

e. initiate a tender offer.

4. With respect to the assignment of a contract right, which two roles are played by the same party with respect to the specific right and its assignment?

a. The obligee and obligor

b. The obligor and assignor

c. The obligee and assignor

d. The obligor and assignee

e. The assignor and assignee

5. Which of the following are needed for an offer to be effective?

a. The offeror must objectively intend to be bound by the offer.

b. The terms of the offer must be definite or reasonably certain.

c. The offer must be communicated to the offeree.

d. A and B

e. A, B and C are all needed.

6. Which of the following is true about corporations?

a. Corporate law is federal law.

b. Corporate law is statutory, thus there is no common law applicable to corporations.

c. Changes to state corporate law can require the amendment of a corporation's articles of incorporation even though the corporation is already in existence.

d. One requirement of corporate status is that the shares be owned by a large number of shareholders.

e. There are no closely held corporations.

7. In a shipment contract, the seller must do all of the following except:

a. arrange for adequate insurance to cover loss or damage to the goods while in transit.

b. place the goods in the possession of the carrier.

c. contract for the proper and safe transportation of the goods.

d. obtain and deliver any appropriate documents related to the sale and shipment.

e. notify the buyer of the shipment.

8. Limited liability companies as a form of conducting business in this country began:

a. in Massachusetts in the early 1800's.

b. in 1950 when New York was the first state in the U.S. to enact legislation allowing limited liability companies.

c. in 2000 when Congress enacted legislation allowing limited liability companies.

d. in Massachusetts in the 1700's.

e. in 1977 when Wyoming was the first state in the U.S. to enact legislation allowing limited liability companies.

9. What is the primary effect of the infancy doctrine?

a. Young children are not able to enter into contracts under any circumstance.

b. A parent or guardian must affirm all contracts entered into by minors.

c. Minors have the right to disaffirm most contracts entered into with adults.

d. Minors cannot enter into any contracts prior to becoming an adult.

e. Court approval is needed for any contract involving a minor.

10. Which of the following is true regarding taxation of limited liability companies?

a. A limited liability company is taxed as a partnership.

b. A limited liability company is taxed as a corporation.

c. A limited liability company may decide whether to be taxed as a corporation or a partnership.

d. A limited liability company is taxed as a partnership on earnings up to $900,000 and as a corporation for amounts over that limit.

e. A limited liability company is taxed as a corporation on earnings up to $900,000 and as a partnership for amounts over that limit.