Business Organizations Test Review

Business Organizations Test Review - Business Organizations...

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Business Organizations Exam Review
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1. A general partner is personally liable for partnership debts if its assets are insufficient to pay its creditors. *a. True b. False 2. Marie is considering forms of business organization for her law firm. One advantage of the limited liability partnership form is that it allows partners to avoid personal liability for a. their acts of malpractice. *b. the malpractice of other partners. c. the obligations of the firm beyond the partners' capital contributions. d. the obligations of the firm within the limit of partners' capital contributions.
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3. Rob, Sue, and Tim agree to form a computer peripherals mail-order business. Rob agrees to manage the business and to assume full personal liability. Sue and Tim agree to invest in the firm but to be liable only to that extent. These three have formed a. a general partnership. b. a limited liability limited partnership. c. a limited liability partnership. *d. a limited partnership. 4. Owen, Paula, Quinn, and Sara get together to finance the building of a shopping mall. Their form of business organization is an investment group, or a. a business trust. b. a joint stock company. c. a joint venture. *d. a syndicate.
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5. A limited liability company is operated in compliance with state law. *a. True b. False 6. 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. 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? Do the partners split the first year's profits? If so, how much is each entitled to?
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This note was uploaded on 06/27/2011 for the course BUS 201 taught by Professor Martenis during the Summer '11 term at Albany State University.

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Business Organizations Test Review - Business Organizations...

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