Chapter 20 - CHAPTER 20FORMS OF DOING BUSINESS TRUE/FALSE 1...

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CHAPTER 20—FORMS OF DOING BUSINESS TRUE/FALSE 1. There are no formal requirements for forming a sole proprietorship. ANS: T NAT: AACSB: Analytic TOP: sole proprietorship 2. The sole proprietor's personal assets are subject to business creditor attachment. ANS: T NAT: AACSB: Analytic TOP: sole proprietorship 3. The income of the sole proprietor's business is reported as a separate entity's income. ANS: F NAT: AACSB: Analytic TOP: sole proprietorship 4. Partners by implication cannot share profits. ANS: F NAT: AACSB: Analytic TOP: partnership 5. A partnership can only be formed voluntarily. ANS: F NAT: AACSB: Analytic TOP: partnership 6. Sharing of profits is prima facie evidence that a partnership exists. ANS: T NAT: AACSB: Analytic TOP: partnership 7. A partnership by estoppel arises when actions lead a third party to believe a partnership exists. ANS: T NAT: AACSB: Analytic TOP: partnership 8. The sale of the goodwill of a partnership requires unanimous consent. ANS: T NAT: AACSB: Analytic TOP: partnership 9. Partners' personal assets can be reached by partnership creditors. ANS: T NAT: AACSB: Analytic TOP: partners 10. Partners are mutual principals and agents. ANS: T NAT: AACSB: Analytic TOP: partners 11. Partners are not liable for each others' torts committed in the scope of business. ANS: F NAT: AACSB: Analytic TOP: partnership 12. A tenancy in partnership does not carry rights of survivorship. ANS: F NAT: AACSB: Analytic TOP: partners
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13. A partner's interest in a partnership is not transferable. ANS: F NAT: AACSB: Analytic TOP: partners 14. A partnership must file a separate tax return and pay taxes on its income. ANS: F NAT: AACSB: Analytic TOP: partners 15. Dissolution of a partnership is termination of a partnership. ANS: F NAT: AACSB: Analytic TOP: dissolution 16. In a limited partnership, there must be a least one general partner. ANS: T NAT: AACSB: Analytic TOP: limited partnership 17. Limited partners have liability limited to the amount of their contribution to the partnership. ANS: T NAT: AACSB: Analytic TOP: limited partnership 18. Only the general partner in a limited partnership has personal liability. ANS: T NAT: AACSB: Analytic TOP: limited partnership 19. Limited partners can take a management role and remain limited partners. ANS: F NAT: AACSB: Analytic TOP: limited partnership 20. A limited partnership can exist by implication. ANS: F NAT: AACSB: Analytic TOP: limited partnership 21. Limited partnerships are taxed the same way as general partnerships. ANS: T NAT: AACSB: Analytic TOP: limited partnership 22. A corporation is only a domestic corporation in its state of incorporation. ANS: T NAT: AACSB: Analytic TOP: corporations 23. The MBCA is as widely adopted in the states as the UPA. ANS: F
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This note was uploaded on 11/06/2010 for the course AA GM520 taught by Professor Aa during the Spring '10 term at DeVry Chicago.

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Chapter 20 - CHAPTER 20FORMS OF DOING BUSINESS TRUE/FALSE 1...

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