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and two limited partners. The partnership is silent with regard to the duration of the partnership, and Brayden wishes to retire67. Roger is a limited partner in a business. To retain his limited liability protection he must not: A. participate in the approval of new partners.B. participate in the removal of existing partners.C. consult or be paid by the business.D. assume management responsibilities.68. A general partnership may be formed by: A. oral agreement.B. written agreement.C. either oral or written agreement.D. either oral, written or implied agreement.
69. Sam and Dave are going to open a sporting goods store. They sign a written limited partnership agreement naming Dave as a limited partner and Sam the general partner. Sam files a certificate of limited partnership with the state. Sam contributes $100,000 toward the startup while Dave contributes $200,000 and they agree to split profits evenly because Sam will be working in the store and operating the day to day business. About a month after they open, the business is not doing well so Dave starts becoming more involved. Soon he is requiring that Sam approve all purchases with him and Dave is actively directing Jack, the sole other employee. One day, Geoff, a customer, is injured when a bowling ball falls off a shelf and shatters his foot. Geoff sues and is awarded a judgment of $1 million. A. as this was a limited partnership, Sam is liable for $800,000 and Dave is liable for $200,000B. Sam and Dave are each liable up to $500,000 eachC. under the circumstances, Sam and Dave are both jointly and severally liable for the full $1 millionD. whoever negligently secured the bowling ball on the shelf is liable for the $1 million liability70. Which of the following does not require two or more principals? A. limited partnershipsB. limited liability partnershipsC. sole proprietorshipsD. limited liability companies11. Some states do not require a written management agreement regarding LLCs. True False12. LLCs may choose to be taxed as a pass through entity or may elect to be taxed as a corporation. True False13. LLCs are not permitted to capitalize by selling equity ownership in the LLC itself. True False
14. The Certificate of Organization may restrict members of an LLC to only those possessing a professional license in a named field. True False26.Issuing securities to the public markets for the first time is called an initial public offering. True/False27.Joe and Josephine have started a plumbing business and have incorporated. They invest nothing into the corporation, and the corporation has minimal assets. One day Josephine negligently damages a main pipe in a customer's home, causing the basement toflood and resulting in $20,000 in damages. The homeowner's only remedy is to sue the corporation, but the corporation has no funding and only minimal assets. Thus the homeowner must bear the loss because Joe and Josephine are shielded from liability due to the corporate protections the business entity affords them. True/False28.