International Business Law A Transactional Approach 2nd Edition By Larry A. – Test Bank
To Purchase
this Complete Test Bank with Answers Click the link Below
If face any problem or
Further information contact us At tbzuiqe@gmail.com
Sample
Test
CHAPTER THREE
STRATEGIES
FOR INTERNATIONAL BUSINESS
TRUE/FALSE
1. The
various forms of doing business in the United States are organized and
controlled by federal law.
ANS: False
2. A
foreign corporation doing business in the United States through a branch office
is liable for the debts incurred by that branch office.
ANS: True
3. A
joint venture may take the form of either a partnership or a corporation.
ANS: True
4. In a
general partnership, only certain partners have unlimited liability, the rest
have limited liability up to their capital contributions.
ANS: False
5. In a
limited partnership, the limited partners may not take part in the day-to-day
management of the venture if they do not want to forfeit their limited
liability.
ANS: True
6. Most
U.S. states differentiate between corporations controlled by a U.S. resident
and those controlled by a foreign entity.
ANS: False
7. Setting
up a foreign representative office usually requires a deeper business and legal
involvement in a foreign country than establishing a branch office.
ANS: False
8. In
general, a branch office may not negotiate or enter into contracts in the host
country.
ANS: False
9. 20%
ownership of the voting securities of a business enterprise is generally
considered the minimum amount necessary for ‘control’ of that enterprise.
ANS: False
10. Currently,
there is no European Union Directive that requires member nations to follow a
particular corporate form.
ANS: True
11. The
German corporate structure places a larger emphasis on shareholder interests
and a secondary emphasis on interests of the employees.
ANS: False
12. The
Japanese corporate form consists of a two-tiered board of directors, the
supervisory board and the management board.
ANS: False
13. In
Indonesia, only Indonesians or Indonesian companies are allowed to act as
agents for foreign exporters.
ANS: True
14. In
the United States, domestic and foreign merchandise may enter into a free trade
zone without a formal customs entry.
ANS: True
15. Foreign
free trade zones are found exclusively in the United States.
ANS: False
16. There
is a strong public policy in U.S. corporate law for holding corporate officers personally
liable for actions committed on behalf of the corporation.
ANS: False
17. The
theory of enterprise liability is not widely accepted by U.S. courts.
ANS: True
18. A
type of joint venture known as the business alliance joint venture is generally
undertaken when a fluid, long-term relationship is envisioned by parties to the
agreement.
ANS: True
19. Most
foreign countries do not actively regulate joint venture transactions.
ANS: False
20. In a
franchise agreement, the franchisee pays royalties fees in exchange for the
right to use and/or manufacture copyrighted, patented or service-marked
materials identifying the enterprise.
ANS: True
21. Under
U.S. common law, a franchisor has a fiduciary responsibility to its
franchisees.
ANS: False
22. In the
U.S., a franchisor generally has the ability to terminate the franchise
agreement at will.
ANS: False
23. Although
franchising is allowed in most countries, many countries do not have laws that
specifically recognize the franchise form of doing business.
ANS: True
24. In a
master franchise arrangement, the contractual relationship always runs between
the sub-franchisee and the sub-franchisor.
ANS: False
25. In
order to obtain purchase a company in a European Union country, a foreign
investors must obtain clearance from Directorate IV of the European Commission.
ANS: True
26. The
international sales price for a good or service is the transfer price.
ANS: False
MULTIPLE
CHOICE
1. A
_________ can be defined as an association between two or more parties with an agreement
to share the profits and often the management of a project.
1. Joint
venture
2. Corporation
3. Branch
office
4. Limited
liability partnership
ANS: A
2. One
of the main advantages of a general partnership over the corporate form is:
1. General
partners have less liability than shareholders
2. The
problem of double taxation is avoided because profits pass through to the
partners
3. Both
A & B
4. None
of the above
ANS: B
3. A
form of business that provides the flexibility of a partnership and the limited
liability of the corporation is:
1. Limited
partnership
2. General
partnership
3. Limited
liability company
4. None
of the above
ANS: C
4. In
the United States, the most common form of doing business for the foreign
investor is:
1. Joint
venture
2. Corporation
3. Limited
partnership
4. Branch
office
ANS: B
5. A
business form in which two or more parties agree to perform certain tasks
without creating a separate third entity is:
1. Limited
liability company
2. Limited
partnership
3. Contractual
joint venture
4. General
partnership
ANS: C
6. A
form of business that generally allows a company to establish a foreign
presence without subjecting itself to foreign regulations or taxation is:
1. Branch
office
2. Representative
office
3. Joint
venture
4. Subsidiary
ANS: B
7. The
Chinese Law on Joint Ventures
Using Chinese and Foreign Investment requires:
1. Establishment
of a Chinese corporation
2. Foreign
participant must provide a minimum of 25% of the capital
3. Ownership
rights of the foreign investor cannot be transferred
4. A
& B only
5. All
of the above
ANS: E
8. The
main advantage in establishing a foreign subsidiary as opposed to a branch
office is:
1. Parent
company has limited liability
2. Transfer
pricing allows for the reduction of tax burden
3. Reduced
disclosure of confidential information to third parties
4. Reduction
in host country regulations affecting the business
ANS: A
9. Corporation
law in the United States is most similar to corporation law in:
1. China
2. Germany
3. France
4. Japan
ANS: D
10. The
fundamental vehicle for financing corporate expansions in Japan is:
1. Stock
offerings
2. Bond
offerings
3. Bank
financing
4. Internal
reserves
ANS: C
11. The
German practice in which employees select half of the corporate board of
directors is known as:
1. Shareholder
maximization
2. Codetermination
3. Blended
model of corporate governance
4. Shareholder’s
council
ANS: B
12. Shareholder
power is the dominant vehicle for corporate decision-making in:
1. Japan
2. United
States
3. Germany
4. China
ANS: D
13. The
view that a corporation’s primary objective should be corporate profit and shareholder
gain is most closely identified with which country:
1. United
States
2. Japan
3. France
4. Germany
ANS: A
14. Typically,
the board of directors in large, Japanese firms is characterized by:
1. Small
size
2. Its
independent and separate nature
3. Its
two tiered structure
4. The
mixing of management and director roles
ANS: D
15. Directorate
IV of the European Commission considers which of the following factor/s when
determining whether a merger or acquisition will create a dominant position
(monopoly) in the market:
1. The
geographic scope of the market
2. The
market shares of the companies
3. Whether
the acquisition/merger has a community dimension
4. A
& B only
5. All
of the above
ANS: E
16. Although
American corporate law generally protects shareholders from being personally
liable for the actions of the corporation, American law does allow the courts
to disregard the corporate form through the doctrine of:
1. Enterprise
liability
2. Piercing
the corporate veil
3. Holder
in due course
4. None
of the above
ANS: B
17. In a
joint venture agreement, a/an ________ clause is one in which the partners
agree to be responsible on multiparty guarantees only to the proportion of
their shareholdings.
1. Extraordinary
decisions clause
2. Purposes
clause
3. Counter-indemnity
clause
4. Exceptions
clause
5. None
of the above
ANS: C
18. A
clause in a franchise agreement that specifies a geographic area in which a
franchisor may not compete with a franchisee is known as:
1. Renewal
clause
2. Territorial
clause
3. Operational
standards clause
4. Site
selection clause
ANS: B
19. A
clause in a franchise agreement that requires the franchisee to defend the
franchisor against any liability claims arising from or related to its
operation of the franchise is:
1. Hold
harmless clause
2. Insurance
clause
3. Franchisee
review clause
4. None
of the above
ANS: A
20. The
problem of exclusive franchise territories violating European anti-trust laws
was alleviated by the passage of an EU:
1. Block
exemption
2. Grant-back
provision
3. Franchise
Federation Act
4. Both
B & C
5. None
of the above
ANS: A
21. The
Russian form of corporation is known as:
1. Municipal
enterprise
2. Association
of enterprises
3. State
enterprise
4. Joint-stock
company
5. None
of the above
ANS: D
22. In
Raymond Dayan v. McDonald’s Corporation, the court ruled that:
1. McDonald’s
did not terminate the franchise agreement in good faith
2. McDonald’s
did not have just cause to terminate the franchise agreement
3. McDonald’s
fulfilled its responsibilities to Dayan under U.S. law
4. Dayan
did not have standing to bring suit under U.S. law
ANS: C
23. A
franchise arrangement entered into with a sub-franchisor in order to develop
large territories is:
1. Operational
license agreement
2. Master
franchise agreement
3. Joint
franchise agreement
4. Territorial
franchise agreement
ANS: B
24. The
Guide to International Master Franchise Arrangements is
published by:
1. International
Institute for the Unification of Private Law (UNIDROIT)
2. International
Chamber of Commerce (ICC)
3. World
Trade Organization (WTO)
4. EU
Commission on Franchise Agreements
ANS: A
ESSAY
QUESTIONS
1. Describe
the various alternatives for conducting business available to foreign
corporations operating in the United States. Discuss the advantages and
disadvantages of each.
ANS: Answers will vary.
1. Discuss
the activities of a representative office, joint venture, branch office, and
foreign subsidiary. Describe how a company increases the depth of its
business and legal involvement in a country as it moves from a representative
office to a full-scale foreign subsidiary.
ANS: Answers will vary.
1. Describe
how a foreign trade zone works. When might one want to utilize a foreign
trade zone and what are some of the advantages?
ANS: Answers will vary.
Comments
Post a Comment