Question 1

A corporation can operate as the only general partner in a limited partnership.

Accepted Answer

A) True 
 B)False  True

Question 2

The Uniform Partnership Act provides "gap-fillers" for partnership contract terms,should a partnership agreement fail to address a crucial issue.

Accepted Answer

A) True 
 B)False  True

Question 3

Martha decided to start a business organizing school events for fund raising.She operated under the fictitious name "Money for Fun." She took no other steps in starting the business.Her very first booking was a high school dance.Unfortunately,one of her employees spilled punch on the floor,resulting in the school principal falling and injuring his back.He sued Martha.Discuss Martha's business form,and whether the principal could reach Martha's personal assets,or whether he is instead limited to reaching "Money for Fun's" assets.

Accepted Answer

Martha was operating as a sole proprietorship.As such,the principal can recover Martha's personal assets to satisfy any judgment against the business.He is not limited to recovering only "Money for Fun's" assets.

Question 4

Which of the following factors is not required to qualify a business as a partnership?

Accepted Answer

A)  equal investments of effort and capital 
B)  an association of two or more persons 
C)  the "carrying on" of a business 
D)  co-ownership of the business 
E)  the sharing of profits 
A)  equal investments of effort and capital 
B)  an association of two or more persons 
C)  the "carrying on" of a business 
D)  co-ownership of the business 
E)  the sharing of profits

Question 5

Creditors may recover claims against the sole proprietorship from the sole proprietor's personal assets.

Accepted Answer

A) True 
 B)False

Question 6

Receipt of a share of business profits is prima facie evidence of a general partnership.

Accepted Answer

A) True 
 B)False

Question 7

Earnings and losses from a sole proprietorship are reported on the sole proprietor's personal income tax filing.

Accepted Answer

A) True 
 B)False

Question 8

Forming a sole proprietorship is easy and does not cost a lot of money.

Accepted Answer

A) True 
 B)False

Question 9

An inference of the existence of a general partnership is drawn if profits are received in payment of consideration for the sale or goodwill of a business.

Accepted Answer

A) True 
 B)False

Question 10

The major forms for conducting businesses and professions are: (1)sole proprietorship; (2)general partnership; (3)limited partnership; (4)limited liability partnership; (5)limited liability company; and (6)corporation.

Accepted Answer

A) True 
 B)False

Question 11

Limited partners do not have the right to vote on the removal of a general partner.

Accepted Answer

A) True 
 B)False

Question 12

A limited partnership has two (2)types of partners: (1)________ partners; and (2)________ partners.

Accepted Answer

A)  general; limited 
B)  express; implied 
C)  general; unlimited 
D)  executive; associate 
E)  express; silent 
A)  general; limited 
B)  express; implied 
C)  general; unlimited 
D)  executive; associate 
E)  express; silent

Question 13

Which of the following is the simplest form of business organization?

Accepted Answer

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

Question 14

Why should a sole proprietor be personally liable for the torts and contracts of a business?

Accepted Answer

If a sole proprietor were not personally

Question 15

Limited partnerships are also referred to as ________ partnerships.

Accepted Answer

A)  general 
B)  qualified 
C)  ordinary 
D)  special 
E)  equitable 
A)  general 
B)  qualified 
C)  ordinary 
D)  special 
E)  equitable

Question 16

A partnership agreement:

Accepted Answer

A)  must be in writing for all partnerships. 
B)  must be an express agreement for all partnerships, but can be either oral or in writing. 
C)  may be implied from the parties' conduct. 
D)  must be in writing, but only for partnerships covered under the Uniform Partnership Act. 
E)  cannot be implied from the actions of the partners. 
A)  must be in writing for all partnerships. 
B)  must be an express agreement for all partnerships, but can be either oral or in writing. 
C)  may be implied from the parties' conduct. 
D)  must be in writing, but only for partnerships covered under the Uniform Partnership Act. 
E)  cannot be implied from the actions of the partners.

Question 17

Co-ownership of a business is essential to create a partnership,and the most important factor in determining co-ownership is whether the parties share the business's profits and management responsibility.

Accepted Answer

A) True 
 B)False

Question 18

Distribution of profits for any purpose is considered to be evidence that a partnership exists.

Accepted Answer

A) True 
 B)False

Question 19

When a new partner is admitted to a pre-existing partnership,the new partner has:

Accepted Answer

A)  unlimited liability for obligations of the partnership, both for those arising before he/she joined the partnership, and those arising after joining. 
B)  liability to the extent of his/her investment for obligations that arose before joining the partnership, and unlimited liability for those arising afterwards. 
C)  liability to the extent of his/her investment for all obligations, arising either before or after he/she joined the partnership. 
D)  no liability for obligations arising from before he/she joined the partnership, and unlimited liability for those arising afterwards. 
E)  no liability for obligations arising from before he/she joined the partnership, and limited liability for those arising afterwards. 
A)  unlimited liability for obligations of the partnership, both for those arising before he/she joined the partnership, and those arising after joining. 
B)  liability to the extent of his/her investment for obligations that arose before joining the partnership, and unlimited liability for those arising afterwards. 
C)  liability to the extent of his/her investment for all obligations, arising either before or after he/she joined the partnership. 
D)  no liability for obligations arising from before he/she joined the partnership, and unlimited liability for those arising afterwards. 
E)  no liability for obligations arising from before he/she joined the partnership, and limited liability for those arising afterwards.

Question 20

When a partnership terminates,and partnership assets are in the process of liquidation and distribution,partners who have loaned money to the partnership are paid before other creditors.

Accepted Answer

A) True 
 B)False

Exam 26: Small Business, Entrepreneurship, and Partnerships

A corporation can operate as the only general partner in a limited partnership.

The Uniform Partnership Act provides "gap-fillers" for partnership contract terms,should a partnership agreement fail to address a crucial issue.

Which of the following factors is not required to qualify a business as a partnership?

Creditors may recover claims against the sole proprietorship from the sole proprietor's personal assets.

Receipt of a share of business profits is prima facie evidence of a general partnership.

Earnings and losses from a sole proprietorship are reported on the sole proprietor's personal income tax filing.

Forming a sole proprietorship is easy and does not cost a lot of money.

An inference of the existence of a general partnership is drawn if profits are received in payment of consideration for the sale or goodwill of a business.

The major forms for conducting businesses and professions are: (1)sole proprietorship; (2)general partnership; (3)limited partnership; (4)limited liability partnership; (5)limited liability company; and (6)corporation.

Limited partners do not have the right to vote on the removal of a general partner.

A limited partnership has two (2)types of partners: (1)________ partners; and (2)________ partners.

Which of the following is the simplest form of business organization?

Why should a sole proprietor be personally liable for the torts and contracts of a business?

Limited partnerships are also referred to as ________ partnerships.

A partnership agreement:

Co-ownership of a business is essential to create a partnership,and the most important factor in determining co-ownership is whether the parties share the business's profits and management responsibility.

Distribution of profits for any purpose is considered to be evidence that a partnership exists.

When a new partner is admitted to a pre-existing partnership,the new partner has:

When a partnership terminates,and partnership assets are in the process of liquidation and distribution,partners who have loaned money to the partnership are paid before other creditors.

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Investor Protection,E-Securities Transactions,and Wall Street Reform

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

Filters

A limited partnership has two (2)types of partners: (1) partners; and (2) partners.