Fanny and john each own and manage their own

Fanny and John each own and manage their own companies.
Fanny's business is manufacturing freight boxes of all types, and
John's business is selling freight boxes to different industries.
They decide to combine their expertise and knowledge to
produce and sell freight boxes specifically designed for the new
airline company that just formed in their city. Which of the
following best describes the business formed by the parties?
Question 4
a. A general partnership. b. A limited liability partnership.
c. A sole proprietorship. d. A joint venture.

Choice "d" is correct.
A joint venture is formed for a single business undertaking such
as building and designing freight containers to be sold specifically
to one company. Each company coming together in this joint
venture has its own business outside of this one endeavor.
Question 4

Noll Corp. and Orr Corp. are contemplating entering into an
unincorporated joint venture. Such a joint venture:
Question 5

Choice "a" is correct.
The legal requirements, the consequences, the advantages, and
disadvantages of forming a joint venture generally are identical
to those of a general partnership.
Joint ventures are treated as a partnership in most important
legal aspects.
Question 5

A. Nature of a Corporation
1. Distinct Legal Entity
A corporation is a legal entity (i.e., it exists as an entity
distinct from its shareholders). Thus, it can sue and can
be sued, own property, and even has some constitutional
rights.
IV. Corporations

a. Corporation is Liable
As a distinct legal entity, only the corporation is liable for
corporate obligations.
b. Generally No Personal Liability
Generally, shareholders, directors, and officers are not
personally liable for contracts made by their corporation.
Neither are they liable for corporate torts, except to the
extent the shareholder, officer, or director participated in
the tort.
IV. Corporations

B. Formation of a Corporation
1. Created Under Statute
Corporations are created by complying with a state
incorporation statute. A majority of states follow the Revised
Model Business Corporation Act, or RMBCA. Many CPA Exam
questions have specifically asked for RMBCA rules.
IV. Corporations

B. Formation of a Corporation
2. Promoters Procure Capital Commitments
The first step in forming a corporation is the procurement of
commitments for capital. This is done by promoters. Generally,
promoters enter into contracts (called "stock subscriptions")
with the third parties who are interested in becoming
shareholders of the corporation once it is formed. Promoters
might also enter into contracts with others for goods or
services to be provided to the corporation once it is formed.