Question 4. Which of the following is correct with respect to sole
proprietorships? a. The sole proprietorship is a separate legal entity. b. A sole proprietorship exists where two or more people carry on business together with a view toward profits. c. The sole proprietor has limited liability. d. The sole proprietor has unlimited liability. e. A sole proprietorship must be incorporated. 3 Question 5. Which of the following is the proper definition of a partnership as set out in the Partnership Act? a. Partnership exists where two or more persons carry on business in common with a view to profit. b. A partnership exists only where two or more people enter into a written agreement to be partners. c. A partnership is created where a corporation with shareholders is registered with the federal government. d. A partnership is only created where the partners actually share the profits from a business. e. A partnership exists where any business is carried on with a view toward profits.
Question 6. Which of the following terms is used to describe the process in which a neutral 3rd party helps the spouses reach an agreement a. litigation b. negotiation c. mediation d. arbitration e. none of the above
Question 7.Which one of the following is correct with respect to the rights of partners unless they have agreed otherwise?
a. No major decision can be taken without a majority vote.
b. Only the partners that have contributed the largest capital amount have the right to share in management.
c. All profits are shared equally among the partners.
d. A partner can sell her share of the partnership to another person without the agreement of the other partners.
e. Personal expenses incurred by the partners in the course of business are reimbursed.
Question 8. Divorce is a matter covered by the federal government. a. True b. False
Question 9. Which of the following statements is correct with respect to unlimited liability?
a. Only the partner's share of the partnership assets can be used to satisfy the debt incurred by another partner.
b. Each partner can be held responsible for the debts of the partnership no matter how great they are.
c. Unlimited liability means the partner can lose what he has invested but no more.
d. The partner cannot only lose what she has invested but can also be required to pay an additional amount equal to what she has invested. e. If there are two partners, each partner can be held responsible for an amount equal to but no more than one half of the debts of the partnership.
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