Question 1

General partnerships do not pay federal income taxes.

Accepted Answer

A) True 
 B)False

Question 2

The ________ Act is a uniform act that regulates the formation, operation, and termination of limited partnerships.

Accepted Answer

Revised Un

Question 3

Flow-through taxation is the federal income tax imposed on general partnerships.

Accepted Answer

A) True 
 B)False

Question 4

Explain in brief the liabilities of general and limited partners in a limited partnership.

Accepted Answer

The general partners of a limited partne

Question 5

Which of the following is true of tort liability of a general partnership?

Accepted Answer

A)  Only the partner who committed the tort is liable. 
B)  Partners who have not committed the tort but had to pay liability cannot indemnify from the partner that committed the torn. 
C)  A partner can be sued even if he or she did not participate in the commission of the tort. 
D)  If one of the partners in the partnership is released, the other partners are discharged of liability. 
A)  Only the partner who committed the tort is liable. 
B)  Partners who have not committed the tort but had to pay liability cannot indemnify from the partner that committed the torn. 
C)  A partner can be sued even if he or she did not participate in the commission of the tort. 
D)  If one of the partners in the partnership is released, the other partners are discharged of liability.

Question 6

Limited partnerships are also known as ________.

Accepted Answer

special pa

Question 7

Which of the following types of liability do limited partners of a limited partnership have for the debts and obligations of the limited partnerships?

Accepted Answer

A)  unlimited personal liability 
B)  liability restricted to debts up to their capital contributions 
C)  liability of termination as partner 
D)  unlimited organizational capital liability 
A)  unlimited personal liability 
B)  liability restricted to debts up to their capital contributions 
C)  liability of termination as partner 
D)  unlimited organizational capital liability

Question 8

A sole proprietorship cannot be easily transferred when the owner desires to do so.

Accepted Answer

A) True 
 B)False

Question 9

Justin and Michael form a limited partnership and start a car dealership. Justin is the general partner and Michael is the limited partner. Seven months after the commencement of the business, Pedro makes an investment and wishes to become a general partner. A week later, Michael's mother wishes to join the partnership as a limited partner. Which of the following is true in this scenario?

Accepted Answer

A)  Pedro cannot become a general partner to the partnership after the business has commenced. 
B)  Pedro cannot become a general partner to the partnership as a limited partnership can only have one general partner. 
C)  Michael's mother cannot become a limited partner to the partnership as a limited partnership can only have one limited partner. 
D)  Both Pedro and Michael's mother can choose to become either general or limited partners to the partnership. 
A)  Pedro cannot become a general partner to the partnership after the business has commenced. 
B)  Pedro cannot become a general partner to the partnership as a limited partnership can only have one general partner. 
C)  Michael's mother cannot become a limited partner to the partnership as a limited partnership can only have one limited partner. 
D)  Both Pedro and Michael's mother can choose to become either general or limited partners to the partnership.

Question 10

Defective formation of a limited partnership occurs when a certificate of limited partnership is not properly filed.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of profits and losses in a general partnership?

Accepted Answer

A)  The proportion of profit shared is equal to the general partner's initial investment. 
B)  Losses are shared equally by all general partners. 
C)  The general partner who proposed the idea of the business gets most profit. 
D)  The proportion of investment governs only the proportion of loss shared and not profit obtained. 
A)  The proportion of profit shared is equal to the general partner's initial investment. 
B)  Losses are shared equally by all general partners. 
C)  The general partner who proposed the idea of the business gets most profit. 
D)  The proportion of investment governs only the proportion of loss shared and not profit obtained.

Question 12

Which of the following is true of a limited partnership agreement?

Accepted Answer

A)  It provides that all transactions must be approved by all partners. 
B)  It does not contain information about dissolution of the partnership as it an agreement of formation. 
C)  It provides that general and limited partners have equal voting rights. 
D)  It sets forth the terms and conditions regarding the termination of the partnership. 
A)  It provides that all transactions must be approved by all partners. 
B)  It does not contain information about dissolution of the partnership as it an agreement of formation. 
C)  It provides that general and limited partners have equal voting rights. 
D)  It sets forth the terms and conditions regarding the termination of the partnership.

Question 13

The designation of d.b.a. refers to the description for a business that is operating under a trade name.

Accepted Answer

A) True 
 B)False

Question 14

General partners have unlimited personal liability for the debts and obligations of the partnership.

Accepted Answer

A) True 
 B)False

Question 15

Who among the following get first priority in the distribution of assets upon the dissolution of a partnership?

Accepted Answer

A)  investors 
B)  limited partners 
C)  general partners 
D)  creditors 
A)  investors 
B)  limited partners 
C)  general partners 
D)  creditors

Question 16

A third party who sues to recover on a partnership contract need not name all the general partners in the lawsuit.

Accepted Answer

A) True 
 B)False

Question 17

Partners who erroneously but in good faith believe they have become limited partners can escape liability as general partners by ________.

Accepted Answer

A)  adding their surname to the name of the business establishment 
B)  filing for a refund of his or her initial investment with interest 
C)  bringing a lawsuit against all general and limited partners 
D)  withdrawing from any future equity participation in the enterprise 
A)  adding their surname to the name of the business establishment 
B)  filing for a refund of his or her initial investment with interest 
C)  bringing a lawsuit against all general and limited partners 
D)  withdrawing from any future equity participation in the enterprise

Question 18

Which of the following happens when a general partner withdraws from a limited partnership?

Accepted Answer

A)  The partnership must be sold. 
B)  The partnership is transferred. 
C)  The partnership is dissolved. 
D)  The partnership operates normally. 
A)  The partnership must be sold. 
B)  The partnership is transferred. 
C)  The partnership is dissolved. 
D)  The partnership operates normally.

Question 19

A(n)________ is a document that is filed with the secretary of state upon the dissolution of a limited partnership.

Accepted Answer

certificat

Question 20

Jonathan Lopez wants to be his own boss and ventures into retailing fruit in the neighborhood after borrowing some money from his mother. While obtaining a license to carry out business in his city, Jonathan mentions the money he borrowed but forgets to specify what type of business undertaking his store will be. Under which of the following major forms of business is Jonathan's store listed by default?

Accepted Answer

A)  a general partnership 
B)  a sole proprietorship 
C)  a limited partnership 
D)  a limited liability corporation 
A)  a general partnership 
B)  a sole proprietorship 
C)  a limited partnership 
D)  a limited liability corporation

Exam 14: Small Business and General and Limited Partnerships

General partnerships do not pay federal income taxes.

The ________ Act is a uniform act that regulates the formation, operation, and termination of limited partnerships.

Flow-through taxation is the federal income tax imposed on general partnerships.

Explain in brief the liabilities of general and limited partners in a limited partnership.

Which of the following is true of tort liability of a general partnership?

Limited partnerships are also known as ________.

Which of the following types of liability do limited partners of a limited partnership have for the debts and obligations of the limited partnerships?

A sole proprietorship cannot be easily transferred when the owner desires to do so.

Defective formation of a limited partnership occurs when a certificate of limited partnership is not properly filed.

Which of the following is true of profits and losses in a general partnership?

Which of the following is true of a limited partnership agreement?

The designation of d.b.a. refers to the description for a business that is operating under a trade name.

General partners have unlimited personal liability for the debts and obligations of the partnership.

Who among the following get first priority in the distribution of assets upon the dissolution of a partnership?

A third party who sues to recover on a partnership contract need not name all the general partners in the lawsuit.

Partners who erroneously but in good faith believe they have become limited partners can escape liability as general partners by ________.

Which of the following happens when a general partner withdraws from a limited partnership?

A(n)________ is a document that is filed with the secretary of state upon the dissolution of a limited partnership.

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