Question 1

A limited partnership:

Accepted Answer

A)  dissolves when a limited partner dies.
B)  may not have a corporation as a general partner.
C)  may be taxed either as a partnership or as a corporation.
D)  may be created by default.E) A) and B)
F) A) and C)

Question 2

As an association,a partnership is a voluntary and consensual relationship.

Accepted Answer

A) True 
 B)False

Question 3

Individuals in a valid general partnership are not personally liable for the obligations of the business.

Accepted Answer

A) True 
 B)False

Question 4

According to the RUPA:

Accepted Answer

A)  partners have no liability for the obligations of the partnership.
B)  a partnership cannot sue or be sued in its own name.
C)  a partnership does not have a life apart from its owners.
D)  partnerships have continuity of existence.E) All of the above
F) C) and D)

Question 5

A ________ has one or more general partners and one or more limited partners.

Accepted Answer

A)  limited liability partnership
B)  professional corporation
C)  limited partnership
D)  limited liability companyE) B) and C)
F) A) and D)

Question 6

Regarding the formation of a general partnership,which of the following is not a legal requirement but has been described as "highly desirable"?

Accepted Answer

A)  A formal,written partnership agreement
B)  An oral agreement
C)  An exchange of mutual consideration
D)  An agreement limiting the liability of the partnersE) B) and C)
F) B) and D)

Question 7

Abe and Carlos want to form a general partnership.What must they do in order to create this legal form of business?

Accepted Answer

A)  They must get a partnership license from the secretary of state.
B)  They must sign a written agreement and file it with the secretary of state.
C)  They must first orally agree to become partners and then formulate a contract.
D)  They can start a partnership without any formalities.E) A) and B)
F) B) and C)

Question 8

Which of the following is NOT a consequence of being a partner of a partnership?

Accepted Answer

A)  Partners are not liable for each other's torts.
B)  Partners are agents of each other.
C)  Each partner owns a portion of the value of the business.
D)  Each partner owes a fiduciary duty to the partnership and to the other partners.E) C) and D)
F) A) and D)

Question 9

Which of the following is true about a partnership?

Accepted Answer

A)  It is not a tax-paying entity for federal income tax purposes.
B)  Business losses are deductible based on the limit on a partner's individual tax return.
C)  It does not have a life apart from its owners.
D)  Partners of a partnership do not assume personal liability for obligations of the business.E) A) and B)
F) A) and C)

Question 10

Which of the following is not one of the aims of the RUPA?

Accepted Answer

A)  To maintain a level of exclusivity to partnership status
B)  To codify partnership law in one document
C)  To make partnership law nearly consistent with itself
D)  To attain uniformity throughout the countryE) C) and D)
F) B) and D)

Question 11

Which of the following is true about a limited partnership?

Accepted Answer

A)  A limited partnership has difficulties raising large amounts of capital.
B)  A limited partnership can be created only by complying with a state statute permitting limited partnerships.
C)  A limited partnership cannot be transferred to another person.
D)  Limited partners are liable for the obligations of the limited partnership after making their capital contributions.E) A) and D)
F) All of the above

Question 12

Jack is the sole proprietor of his sewing business,Jack's Custom Tailoring.Jack is required to:

Accepted Answer

A)  file the trade name under a state statute requiring the registration of fictitious business names.
B)  put notice of his trade name in the local newspaper.
C)  register the trade name with the state's attorney general's office.
D)  file a separate federal tax return for the business.E) A) and B)
F) A) and D)

Question 13

In MP Nexlevel of Cal. ,Inc.v.CVIN,the case in the text,the court held that:

Accepted Answer

A)  CVIN and CENIC were in a legal partnership because they filed a joint application for grant funding.
B)  CVIN and CENIC were not in a legal partnership.
C)  CVIN and CENIC were in a legal partnership because they represented on grant forms that they were in a "public-private partnership."
D)  CVIN and CENIC were in a legal partnership because they jointly built,operated,and maintained the project.E) B) and C)
F) A) and D)

Question 14

The liability of a purported partner is based on:

Accepted Answer

A)  substantial,detrimental reliance on the appearance of a partnership.
B)  objectively reasonable reliance on the appearance of a partnership.
C)  subjectively reasonable reliance on the appearance of a partnership
D)  fairness of the representation.E) A) and D)
F) A) and B)

Question 15

Mike,Randy,and Steve are partners of a partnership.Mike and Steve loan the partnership $10,000 each.Which of the following statements is true?

Accepted Answer

A)  Randy is a debtor of the partnership.
B)  Mike and Steve are the sole owners of the partnership.
C)  Mike and Steve are both owners and creditors of the partnership.
D)  Mike,Randy,and Steve are all owners and creditors of the partnership.E) B) and C)
F) A) and B)

Question 16

A partnership is an income tax-paying entity for federal income tax purposes.

Accepted Answer

A) True 
 B)False

Question 17

A mining partner's interest is not freely transferable.

Accepted Answer

A) True 
 B)False

Question 18

Babs,Mindy,and Eric decide to leave a large accounting firm and start their own accounting business.What form of business should they elect?

Accepted Answer

Babs,Mindy,and Eric should choose either...

Question 19

Which of the following forms of business always imposes double taxation on the earnings of the business?

Accepted Answer

A)  A corporation
B)  A limited liability company
C)  A limited liability partnership
D)  A sole proprietorshipE) B) and C)
F) A) and C)

Question 20

Susan Mills,a sole proprietor,operates her bakery under the name Susan's Sweets.If she were sued by a creditor,the creditor would address his complaint to:

Accepted Answer

A)  Susan Mills or Susan's Sweets.
B)  Susan's Sweets.
C)  Susan Mills.
D)  Susan Mills,doing business as Susan's Sweets.E) B) and C)
F) A) and C)

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Abe and Carlos want to form a general partnership.What must they do in order to create this legal form of business?

Correct AnswerverifiedShow Answer

Regarding the formation of a general partnership,which of the following is not a legal requirement but has been described as "highly desirable"?

Correct AnswerverifiedShow Answer

Susan Mills,a sole proprietor,operates her bakery under the name Susan's Sweets.If she were sued by a creditor,the creditor would address his complaint to:

Correct AnswerverifiedShow Answer

Individuals in a valid general partnership are not personally liable for the obligations of the business.

Correct AnswerverifiedShow Answer

A limited partnership:

Correct AnswerverifiedShow Answer

A ________ has one or more general partners and one or more limited partners.

Correct AnswerverifiedShow Answer

A partnership is an income tax-paying entity for federal income tax purposes.

Correct AnswerverifiedShow Answer

Which of the following is true about a limited partnership?

Correct AnswerverifiedShow Answer

A mining partner's interest is not freely transferable.

Correct AnswerverifiedShow Answer

Which of the following is not one of the aims of the RUPA?

Correct AnswerverifiedShow Answer

Which of the following is true about a partnership?

Correct AnswerverifiedShow Answer

In MP Nexlevel of Cal. ,Inc.v.CVIN,the case in the text,the court held that:

Correct AnswerverifiedShow Answer

The liability of a purported partner is based on:

Correct AnswerverifiedShow Answer

According to the RUPA:

Correct AnswerverifiedShow Answer

Babs,Mindy,and Eric decide to leave a large accounting firm and start their own accounting business.What form of business should they elect?

Correct AnswerverifiedBabs,Mindy,and Eric should choose either...View AnswerShow Answer

Which of the following is NOT a consequence of being a partner of a partnership?

Correct AnswerverifiedShow Answer

As an association,a partnership is a voluntary and consensual relationship.

Correct AnswerverifiedShow Answer

Jack is the sole proprietor of his sewing business,Jack's Custom Tailoring.Jack is required to:

Correct AnswerverifiedShow Answer

Mike,Randy,and Steve are partners of a partnership.Mike and Steve loan the partnership $10,000 each.Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which of the following forms of business always imposes double taxation on the earnings of the business?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Babs,Mindy,and Eric should choose either...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified