Question 1

Jim is considering forms of business organization, including the limited liability company (LLC), for his business-Kettle Popt-Korn. Most states require that an LLC have​

Accepted Answer

A)  ​a corporate veil, but no minimum number of participants. 
B)  ​at least one member. 
C)  ​at least two members. 
D)  ​at least one non-member manager.

Question 2

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is​

Accepted Answer

A)  ​not liable. 
B)  ​only liable to the amount of her capital contribution. 
C)  ​only liable in proportion to the number of partners in the firm. 
D)  ​personally liable to the full extent.

Question 3

A sole proprietorship offers less flexibility than does a partnership or a corporation.​

Accepted Answer

A) True 
 B)False

Question 4

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is​

Accepted Answer

A)  ​entitled to compensation in proportion to her effect on the business. 
B)  ​entitled to compensation in proportion to her effort. 
C)  ​entitled to compensation in proportion to her capital contribution. 
D)  ​not entitled to compensation.

Question 5

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L​

Accepted Answer

A)  ​can continue its business for one twelve-month period. 
B)  ​can continue its business indefinitely. 
C)  ​dissolves immediately unless the partners change its business. 
D)  ​is immediately subject to criminal prosecution and penalties.

Question 6

Sara and Terry agree while talking on the phone to form a partnership to enter into the business of real property management. To be enforceable under the Statute of Frauds, their agreement must​

Accepted Answer

A)  ​be filed in the appropriate state office. 
B)  ​be in writing. 
C)  ​be signed by a notary public. 
D)  ​not involve a third party.

Question 7

Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is​

Accepted Answer

A)  ​express, but not implied. 
B)  ​implied, but not express. 
C)  ​oral, written, or implied by conduct. 
D)  ​written, but not oral or implied.

Question 8

Bee Hive Honey, LLC's members include Charlie and Donna. For purposes of suing and being sued, Bee Hive Honey is​

Accepted Answer

A)  ​an aggregate of its members. 
B)  ​a non-entity 
C)  ​a legal entity apart from its members. 
D)  ​a non-participating third party.

Question 9

In a partnership, the senior partner controls decisions on ordinary matters connected with the firm's business.​

Accepted Answer

A) True 
 B)False

Question 10

Jess and Keri are members of Livewire LLC, a limited liability company. In most situations, with respect to Livewire's debts, Jess and Keri are shielded from​

Accepted Answer

A)  ​all liability. 
B)  ​no liability. 
C)  ​personal liability. 
D)  ​"corporate veil" liability.

Question 11

Rico, the owner of Simply Sushi, is a sole proprietor. What are the chief characteristics, advantages, and disadvantages of this form of business organization? Rico wants to obtain additional capital to expand Simply Sushi, but she does not want to lose control of the firm. As a sole proprietor, what is her best option to attain these goals?​

Accepted Answer

The answer of Rico, the owner of Simply Sushi, is...

Question 12

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act​

Accepted Answer

A)  in the absence of an express agreement.​ 
B)  ​in the absence of an implied agreement. 
C)  ​only under an express agreement. 
D)  ​under all circumstances.

Exam 18: Small Businesses and Limited Liability Companies

Jim is considering forms of business organization, including the limited liability company (LLC) , for his business-Kettle Popt-Korn. Most states require that an LLC have

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is

A sole proprietorship offers less flexibility than does a partnership or a corporation.

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L

Sara and Terry agree while talking on the phone to form a partnership to enter into the business of real property management. To be enforceable under the Statute of Frauds, their agreement must

Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is

Bee Hive Honey, LLC's members include Charlie and Donna. For purposes of suing and being sued, Bee Hive Honey is

In a partnership, the senior partner controls decisions on ordinary matters connected with the firm's business.

Jess and Keri are members of Livewire LLC, a limited liability company. In most situations, with respect to Livewire's debts, Jess and Keri are shielded from

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act