Deck 20: Hybrid Business Forms

Question 1

The original source of limited partnership law is the _____ that was drafted in 1916.

A)Uniform Limited Partnership Act ULPA)
B)Revised Uniform Limited Partnership Act
C)National Conference of Commissioners on Uniform Laws
D)Companies Act
E)Limited Liability Partnership Act

Answer 1

A

Question 2

A limited liability company:

A)will necessarily have a continuity of life.
B)does not insulate the owners from conduit taxation.
C)has a decentralized management.
D)will necessarily offer free transferability of interests.
E)insulates its owners from pass-through taxation.

Answer 2

E

Question 3

The partnership law imposed personal liability on the partners because people tend to be more careful when they are personally liable for their own mistakes and bad judgment.

Answer 3

True

Question 4

The owners of S corporation have limited liability.

Question 5

Liability between two partners in a partnership is shared.

Question 6

The third wave of the limited liability partnership LLP)legislation offered full shield protection which meant no unlimited liability at all.

Question 7

California law does not allow for a limited liability limited partnership LLLP)to be formed in California.

Question 8

Limited partners have no power to dissolve a firm,except on court orders.

Question 9

The control of the limited partnership is in the hands of the limited partners.

Question 10

As per the Uniform Limited Partnership Act ULPA)-1985,limited partners do not have the right to inspect the firm's books and records.

Question 11

If the certificate of limited partnership that is filed with the secretary of state is substantially defective,a general partnership is created.

Question 12

As in a partnership,the limited liability company LLC)property is not specific to any member,but each has a personal property interest in general.

Question 13

Which of the following is true of assignment of partnership rights in a limited partnership?

A)Limited partnerships interests cannot be assigned in whole.
B)Assignment of limited partnership rights leads to dissolution.
C)The assignee of a limited partnership becomes a new limited partner if atleast one partner agrees.
D)All assignees of a limited partnership cease to be a partner of the firm.
E)An assignee of a limited partnership becomes a partner if provided for in the certificate.

Question 14

Generally,the S corporation pays no corporate income tax.

Question 15

In case of limited liability limited partnerships LLLPs),only the limited partners benefit from a full,status-based liability shield.

Question 16

In case of limited liability companies LLCs),all the members are equally liable to third parties regardless of the owner's level of participation.

Question 17

Which of the following states of US has not adopted any of the versions of the Uniform Limited Partnership Act?

A)Washington
B)California
C)Louisiana
D)Alaska
E)Connecticut

Question 18

Carl and Christine decided to open a small food joint together by investing capital and sharing the profits.However,Christine chose not to participate in the day to day activities of the food joint and Carl was singularly liable to any losses that their food joint made.It can be said that a _____ was formed by Carl and Christine.

A)closed shop
B)sole proprietorship
C)general partnership
D)limited partnership
E)hot cargo agreement

Question 19

Sub-S corporations,limited liability partnerships,and limited liability limited partnerships are all entities.

Question 20

The first step in the termination of the limited liability company LLC)is dissolution.

Question 21

A _____ is a corporation whose owners elect to have it treated as partnership for tax purposes.

A)scienter
B)S corporation
C)C corporation
D)tippee
E)escheat

Question 22

_____ is the lack of incentive to guard against a risk when a person is protected against it,as by being afforded limited liability.

A)Moral hazard
B)Embezzlement
C)Battery
D)Larceny
E)Allonge

Question 23

What are the characteristics of a corporation? What characteristics must a limited liability company lack to not be considered a corporation for tax purposes?

Question 24

As compared with corporations,the limited liability company LLC)is not a good form if:

A)the owners expect to raise money from the public through multiple investors.
B)it is an entity.
C)limited liability is provided to the partners of the partnership that have converted into an LLC.
D)an LLC has less than six members who are engaged in running the firm collectively.
E)its operating agreement can be amended by an unanimous vote.

Question 25

According to the Uniform Limited Partnership Act 1985 and precedents),what are the various things that a limited partner could do that would not risk the loss of insulation from the personal liability?

Question 26

It is required that the limited liability company LLC)members file a _____ with the secretary of the state during its creation.

A)certificate of stare decisis
B)certificate of organization
C)certificate of ultra vires
D)certificate of derivative action
E)certificate of parens patriae

Question 27

One of the real benefits of limited liability companies LLCs)that is unavailable in corporations is:

A)that all members enjoy limited liability.
B)the presence of a centralized management.
C)that it has a limited period of existence.
D)free transferability of interest.
E)that no annual meetings are required.

Question 28

According to the Uniform Limited Partnership Act ULPA)-2001,in a _____,no partner-whether general or limited-is liable on account of partner status for the limited partnership's obligations.

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

Question 29

Which of the following is true of an S corporation?

A)It can be incorporated anywhere in the World.
B)It cannot have more than one hundred shareholders.
C)The corporation has two classes of stock: common stock and preferred stock.
D)It is capitalized as a general partnership firm.
E)Any person from anywhere in the World can become a shareholder of the S corporation.

Question 30

When the limited liability company LLC)is manager managed,_____.

A)all members have actual and apparent authority to bind the LLC to contracts on its behalf
B)all member votes have equal weights
C)non-manager members also have duty of care and fiduciary duty
D)only managers have the legal authority to bind the firm
E)firm decisions that are extraordinary can be taken only by its manager members

Question 31

Under the second wave of the partial shield statute,a partner of a limited liability partnership LLP)would be unlimitedly liable for:

A)breaches of ordinary contract obligation.
B)negligent acts.
C)wrongful acts by employees.
D)wrongful acts of agents.
E)malpractice and misconduct of employees.