1

In a ________ partnership, all the partners' liability for professional malpractice is limited to the partnership.

a)

general

b)

limited

c)

professional

d)

limited liability

e)

stop-loss

Question 2

Which of the following was the result on appeal inCampbell, Kesser, and Williams v. Pothas Corporation, the case in the textbook in which the defendant alleged that golden parachute agreements were not enforceable because they violated public policy?

a)

That based on significant case law ruling such agreements in violation of public policy, the agreements would be declared void under principles ofstare decisis.

b)

That based on a congressional committee report, the contracts would be declared void.

c)

That the defendant did not receive its benefit with regard to the contracts and that the golden parachute agreements were, therefore, voidable by the defendant.

d)

That the agreements were valid and did not violate public policy.

e)

That the agreements were valid, but only because a merger was involved.

Question 3

If corporate directors fail to sue when the corporation has been harmed by an individual, another corporation, or a director, individual shareholders can file a ________ on behalf of the corporation.

a)

default judgment

b)

class action suit

c)

shareholder's direct suit

d)

shareholder's derivative suit

e)

shareholder's distributive suit

Question 4

In which of the following situations would a court likely to pierce the corporate veil?

a)

Shareholders attempt to commit fraud through a corporation.

b)

A corporation followed statutory mandates regarding corporate business.

c)

Shareholders' personal interests and corporate interests are separate.

d)

A corporation had adequate capital when it initially formed.

e)

None of the above; because a corporation is a legal entity separate from its owners (i.e., its shareholders), a court cannot pierce the corporate veil in order to impose personal liability on shareholders.