21. A Sub Chapter S Corporation:

A. has the advantages and disadvantages of a partnership but is taxed liked a corporation

B. is structured like an LLC but is taxed like a limited partnership.

C. can only be owned and have as its shareholder a parent corporation.

D. has the advantages and disadvantages of a standard corporation but is treated for tax purposes as a sole proprietorship or partnership.

22. A restrictive endorsement

A. may prevent someone who has taken the check from becoming a holder or holder in due course

B. is the same as an endorsement in blank

C. changes order paper to bearer paper

D. prevents a check from being negotiated

23. A check is negotiated by

A. endorsement only

B. delivery only

C. delivery and endorsement

D. only when it is cashed and the proceeds are received

24. The parties to a negotiable instrument are

A. the payor, drawer and drawee

B. the payor, payee and bank

C. the payee, promisee and drawer

D. the payee, drawer and drawee

25. A holder in due course

A. Takes free of all universal and personal defenses

B. will always be able to collect a check

C. is the same as a holder but has received the proceeds of the check from the bank

D. takes free and clear of most defenses

26. On the bank of an envelope Tom write "I nearby praise to pay to the order of Jill Green the sum of $100 on demand" and signs his name. Tom is the payee.

True or False

27. Same facts as #26, Jill can negotiate the instrument by delivery; she need not indorse the instrument.

True or False

28. On a sheet of paper, Jenny writes " I owe Sue Desmond the sum of $500 payable out of the proceeds of the sale of my car" and signs her name. The document cannot be considered a negotiable instrument.

True or False

29. Fraud in the inducement is a good defense against a holder in due course.

True or False

30. In order to become a holder in due course, one must take for value, in good faith and without notice of any defenses.

True or False