Question 1

Newt is considering forms of business organization for Newton Design,an ar?chitectural firm.An advantage of a limited liability partnership is that partners can avoid personal liability for

Accepted Answer

The answer of Newt is considering forms of business organization...

Question 2

Venture Capital,LP,is a limited partnership.A Venture limited partner loses his or her limited liability if he or she

Accepted Answer

A limited partner in a venture capital structure retains limited liability as long as they do not actively participate in the management of the firm. If a limited partner starts acting as the firm's manager and taking control over business decisions, they could be deemed a general partner and lose their limited liability protection. Knowing about the firm's business activities, investing in a competitor, or voting on a sale or dissolution does not affect the limited partner's liability status.

Question 3

Dani is considering forms of business organization for her financial advisory firm.Like most states,Dani's state requires that to form a limited liabil?ity company,she must file with a central state agency

Accepted Answer

To form a limited liability company (LLC), the required document to file with the state agency is the Articles of Organization.

Question 4

Mead,Nero,and Olen do business as Pipe & Plumbing Services.After Mead's relationship to the firm ends,Nero and Olen agree to discontinue the business.This is

Accepted Answer

Dissolution refers to the termination of a partnership or business entity. In this scenario, Nero and Olen agree to discontinue the business after Mead's departure, which is an example of dissolution. Dissociation refers to the withdrawal of a partner from a partnership, which is not the case here. Gross negligence and simple misconduct are not applicable to the given scenario.

Question 5

Jim and Kyle are partners in J&K Sales,which exports technical equip?ment under a three-year partnership agreement.The U.S.gov?ernment declares that the equipment can no longer be ex?ported.J&K

Accepted Answer

Since J&K Sales' main business of exporting technical equipment is no longer possible due to the government ban, the partnership must dissolve unless the partners agree to change the nature of their business. Therefore, option C is the best choice. Option A is incorrect because the statement "as soon as the stated term expires" is not relevant in this scenario. Option B is incorrect because it implies that the partners have free control over dissolving the partnership, but in this case, the partnership must dissolve due to external factors. Option D is incorrect because the partnership cannot continue with its original business plan.

Question 6

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

Accepted Answer

As a member of a limited liability company, Kristal has the ability to participate in the firm's management to any extent unless the LLC operating agreement establishes restrictions on how much management authority a member may exercise. The extent of Kristal's authority is not based on her investment or liability for the firm's debts.

Question 7

Owen plans to open Owen's Pets Store,a pet sales and pet supplies outlet,and to hire Quimby and Ruth.Owen will invest only his own money.He does not ex?pect to make any profit for at least two years and to make almost no profit for the first three years,but he hopes to expand eventually.Which form of business organization would be most appropriate? What are the chief characteristics,advantages,and disadvantages of this form of busi?ness organization? If Owen wants to obtain additional capital to expand the business,but does not want to lose control of the firm,what is his best option?

Accepted Answer

The answer of Owen plans to open Owen's Pets Store,a...

Question 8

Jay is a member of Klondike Coffee,LLC,a limited liability company.Jay is liable for Klondike's debts

Accepted Answer

As a member of a limited liability company, Jay's liability is limited to the extent of his investment in the firm. This is one of the key benefits of operating as an LLC, as it provides personal asset protection for its members. Jay is not personally responsible for the debts and liabilities of the LLC beyond the amount of his investment.

Question 9

Sally and Tom decide to go into business,selling discounted merchandise through their Web site "e-Buy." They sign a partnership agreement that requires Sally to contribute $12,000 and Tom to contribute $8,000 in capital to start the firm.The agreement says nothing about the management of the firm or a division of profits.Without Sally's knowledge,Tom tells United Computer Products,Inc.,that he represents the firm and signs a contract with United to buy hard drives for resale on e-Buy.In the first year,e-Buy makes a profit of $50,000.What are the partners' rights with respect to the management of the firm? Is the partnership bound to the contract with United? Do the partners split the first year's profits? If so,how much is each entitled to?

Accepted Answer

The answer of Sally and Tom decide to go into...

Question 10

Bret is a general partner in Capitol Realty,LLLP,a limited liability lim?ited partnership,which cannot pay its debts.Bret is personally li?able for the debts

Accepted Answer

The answer of Bret is a general partner in Capitol...

Question 11

Rick and Sandy are limited partners in Total Profit Enterprises,a limited part?ner?ship.To avoid personal liability for partnership obligations,they must not

Accepted Answer

Limited partners are only liable for the partnership's obligations to the extent of their investment, as long as they do not participate in the management of the partnership. Therefore, Rick and Sandy must not participate in the firm's management to avoid personal liability. Choices (A) and (B) are not relevant since they are already limited partners and their contributions have been made. Choice (C) is close, but limited partners can engage in limited activities related to the partnership's business without losing their limited liability status as long as they do not participate in management.

Question 12

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

Accepted Answer

As a member of a LLC, Greta is an owner of the company.

Quiz 29: Sole Proprietorships,partnerships, Limited