Business Law Questions

Business Law Questions

1. A __________________ is continuously employed to conduct a series of transactions, while a ____________________ is employed to conduct a single transaction or a small, simple group of transactions.

2. A principal is __________________ when the third party lacks knowledge or reason to know of the principal’s existence and the principal’s identity.

3. A __________________________ is identical to a business corporation in most respects except that it involves the incorporation of a professional practice such as lawyers, doctors, or accountants.

4. In transacting partnership business, each partner owes a ___________________.

5. Managers in a _________________________ LLC are elected and removed by a majority vote of the LLC members.

6. __________________________ corporations do not issue stock and do not expect to make a profit.

7. A ________________________ corporation is formed when the promoters substantially comply with each of the mandatory conditions precedent to incorporation of the business.

8. Traditionally, the _____________________________ has had the duty and authority to manage the corporation.

9. To conduct business at a shareholder’s meeting, a __________________ of the outstanding shares must be present at the meeting.

10. ___________________________ is basically a contract for the payment of money.

11. If an instrument is negotiable in nature such as a note or certificate of deposit, it must contain a(n) ____________________________________________.

12. A promise or order is “payable on demand” if (1)________________________________ OR (2)_______________________________.

13. Under Revised Article 3, ______________________ is the transfer of possession, either voluntarily or involuntarily, of a negotiable instrument by a person, other than the issuer, to another person who becomes its holder.

14. Claims and defenses to the payment of an instrument that go to the validity of the instrument are called _________________________.

15. The __________________ of a draft is obligated to pay the draft at the time of its acceptance.

16. _______________________ of an instrument is an unauthorized assumption and exercise of control over it.

17. A check on which the bank is both the drawer and drawee is a __________________.

18. The Federal Reserve operates a domestic wire transfer system known as ________________.

19. An agency relationship may terminate by operation of law which usually involves one of two types of underlying situations. Describe those two situations.

20. I, John Smith, promise to pay to the ORDER of Jane Doe, the sum of $1,000.00 on or before 90 days from today’s date with interest at the rate of 10%. /s/ John Smith Dated this 18th day of August 2009.

Assume the above is a promissory note.

A. Who is the maker of the note?
B. Who is the payee?


Assume that the above figure represents a draft.

A. What kind of draft is it?
B. Who is the payee on the draft?
C. Who is the drawer on the draft?
D. Who is the drawee on the draft?

22. A check that is presented for payment more than six months after it has been issued is called a ___________________.

23. __________________ authorizes banks to transform information they receive in electronic form back into a paper copy of the check.