Exam 23: Sole Proprietorships, partnerships, and Limited Liability Companies

Phillipa is the sole proprietor of Fun Floral Arrangements.As a sole proprietor,on Fun Floral Arrangements' profits,Phillipa

Energy Unlimited,LP,is a limited partnership to which its partners,in-cluding Fink,have contributed capital.Energy's creditors include Graves Engineering,Inc.On Energy's dissolution,its assets will be distributed to pay

Partnership profits must be shared in the same proportion as the partners' investment of capital in the firm.

The majority rule controls decisions on ordinary matters connected with partnership business.

If a partnership's liabilities are greater than its assets,the partners bear the losses.

Ryder and Sergei are partners in Timberline Gear,which sells mountain- and rock-climbing equipment.Ryder manages the business.Unless the partnership agreement states otherwise,Ryder is

Will and Jay form Northwest Air Express,a general partnership.The essential elements of this partnership do not include

A sole proprietor must create a separate business organization to create a sole proprietorship.

Kristal is a member of Laboratory CSI Services,LLC,a limited liability company.Kristal can participate in the firm's management

Some states provide that in the absence of an agreement to the contrary each member of a limited liability company has one vote.

In choosing a form of business organization for a new enterprise,important factors include the ease of creation.

Cody is a partner in Delta Accounting Service.Cody can inspect

Any event that makes its unlawful for a partnership to continue its business will result in dissolution.

Jody owns KuppaJava Kiosks,a sole proprietorship.Jody's liability is

Hollister and Gladys do business as partners in Frothy Confections.For federal income tax purposes,Frothy Confections would be treated as

Kirby is a manager of Jumpstart Fitness LLC,a limited liability company.Jumpstart is formed in a state that imposes fiduciary duties on LLC managers.Kirby owes these duties to

An assignment of the interest of a limited partner dissolves a limited partnership.

Greta is a member of Hovercraft LLC.As a member,Greta is

International Exports,L.P.,is a limited partnership,with $100,000 in de-clared but unpaid profits.International's creditors include Friendly Credit Corporation for $5,000 and Gwen,one of International's limited partners,also for $5,000.When Harry,one of International's general partners,de-cides to retire,the other general partners vote to liquidate and dissolve the firm.The limited partners,who are not asked their opinions,want Interna-tional to continue in business and file a suit against the general partners to compel this result.Can the court order International to continue? If not,what is the priority of the distribution of International's assets on its dissolution?

For most purposes,the law recognizes a partnership as an independent entity.