1. All of the following statements about forms of business organization are true except one. Identify the EXCEPTION. Select one: O a. A corporation is legally separate from its shareholders, so shareholders usually enjoy limited liability. O b. A corporation requires the involvement of a minimum of three individuals and capitalization of at least $10,000. C. Partners can be vicariously liable for the misconduct of their partners. O d. A partnership is a relationship that exists between persons carrying on business in common with a view to a profit. 2. Two advantages to Leslie and Kerry of forming a corporation to operate their business are: Select one: O a. The corporation owns its assets and alone is liable for its debts. All officers must also be directors. O b. The corporation will live on even if the shareholders die. Shareholders enjoy limited liability. O c. Income splitting will be available, allowing parties to minimize the impact of taxation. The corporation must dissolve should a shareholder transfer her shares to outsiders. d. The shareholders face unlimited liability. All shareholders sit on the Board of Directors. 3. Directors must perform all the following duties. Identify the EXCEPTION: Select one: O a. A duty to act in the shareholders' best interests. O b. A duty to act with due diligence and not to act negligently. O c. A duty to disclose personal interests in contracts that the corporation is considering. O d. A duty to act honestly. 4. For which one of the following may a director of a corporation not incur personal liability? Select one: O a. If an employee of the corporation commits fraudulent misrepresentation. O b. If the director votes for a resolution which causes the corporation to violate the Alberta Business Corporations Act. O c. If the corporation is unable to pay wages owed to its employees. O d. If the director commits insider trading. 5. Identify the one INCORRECT statement concerning sole proprietorships: Select one: O a. A sole proprietor is not vicariously liable for the acts of his employees. O b. A sole proprietorship is an individual carrying on business alone, in the sense that the business is that individual's sole responsibility. However, the business may be carried on through the services of an employee or agent. O c. There are some advantages to sole proprietorships. O d Sole proprietors' personal and business assets are one and the same. 6. Which one of the following statements regarding Alberta corporations is FALSE? Select one: O a. The shareholders own the assets of the corporation. O b. Generally, shareholders owe no fiduciary duty to the corporation O c. Pursuant to various provincial and federal statutes, directors may face personal liability. O d. A corporation comes into existence when the government issues its Certificate of Incorporation. 7. Barry and his father have decided to open a store for mountain climbers, specializing in equipment for climbers. The following situations lead one to conclude that a partnership exists between Barry and his father. There is one exception. Identify that EXCEPTION Select one: O a. Barry and his father agree to share the profits from the business. O b. Barry borrows money from his father to start the business, and agrees to repay the loan by paying his father 20% of the profits each month. O c. Both Barry and his father contribute capital to establish the business O d. Barry and his father share the management responsibilities of the business 8. Kelly and Perry have decided to open a bike shop. Which of the following situations will not result in a partnership being formed? Select one: O a. Kelly and Perry agree to share the net returns from the business. O b. Kelly borrows money from Perry to start the business, and agrees to repay the loan by paying Perry 50% of the profits each month. O c. Both Kelly and Perry contribute capital to establish the business. O d. Kelly and Perry share the management responsibilities of the business. 9. With regard to limited partnership, which of the following statements is false? Select one: ut of O a. A limited partner who takes an active part in the management of the firm becomes liable for the firm's losses together with the other general partners. O b. A limited partnership is formed once a certificate is completed by the partners and is registered by the Registrar. O c. A limited partner has unlimited liability for the debts of the firm. O d. A limited partnership is an arrangement in which a partner may limit his liability to his capital contribution. 10. Which of the following does not describe limited liability partnerships? Select one: O a. Became legal in Alberta in December 1999. O b. The name of a limited liability partnership must include the term "Limited Liability Partnership," or "LP." or the French language equivalent. O c. Will shield all of the partners from all liability resulting from the business of the partnership. O d. Will only be available to lawyers, accountants and medical professionals