Exam 34: Small Businesses, Entrepreneurs, and General Partnerships

There are no disadvantages to doing business as a sole proprietorship.

A large business can be operated as a sole proprietorship.

Partnerships are considered to be separate legal entities under the UPA.

Lorna has recently developed a software program tailored for the upscale coffee shop industry.Lorna has begun marketing her program and has had some success selling to small independent stores.She is now ready to begin marketing to franchisees of the national chains,with the hope that a franchisor might make the software part of its required franchisee package.Lorna wants to keep the business separate from her personal affairs,so she has set up separate checking accounts,separate phone lines,and has set up a fictitious business name that does not use her name.She has filed a fictitious business name statement in the appropriate state office.She has written a will in which she has declared that in the event of her death,her business and personal assets and liabilities are to be kept separate,just as they were during her life.Her personal checks say,"Lorna Lones,personal account only." Discuss the extent to which Lorna has insulated her personal assets from any business losses.

The Uniform Partnership Act may not act as a gap-filling device if the partners' agreement fails to provide for an essential term or contingency.

Jack is the sole proprietor of Jack's Appliances.He gives out a 5-year warranty on all appliances that he sells.Sara buys a stove from him.A year later,Jack dies and the business is sold to Ken.Sara can now enforce the warranty against Ken.

Sole proprietorships are the most common form of business organization in the United States.

A general partnership hides behind the corporate veil,thereby relieving the general partners of liability for the debts and obligations of the partnership.

The major advantage of a sole proprietorship is that:

The UPA provides that a partner is not entitled to remuneration for his or her performance in the partnership's business.

Which of the following businesses can be operated as a sole proprietorship?

A sole proprietorship is a separate legal entity from the sole proprietor.

A partnership with a fixed duration is called a partnership at will.

A partnership with no fixed duration is called a partnership for a term.

Partners owe one another a duty of loyalty.

The purpose of requiring the filing of fictitious business names is to allow the public to know the true owner of businesses operating under fictitious names.

If a partnership agreement provides for the sharing of losses but is silent as to how profits are to be shared,profits are shared equally.