BUL 5810 FSU Exam 3
A legal entity separate and distinct from its owners referred to as shareholders, and
formed by filing articles of incorporation is a:
a. corporation.
b. limited liability company.
c. limited partnership.
d. general partnership. - answer a. corporation.
A partner who has no right to participate in control of the business and who has limited
liability is called a:
a. limited partner.
b. nominal partner.
c. secret partner.
d. general partner. - answer limited partner.
In choosing the form in which to conduct business, if ease of formation is the primary
concern, the owners would choose a:
a. corporation.
b. limited liability partnership.
c. limited partnership.
d. general partnership. - answer general partnership. A __________ is an
unincorporated business association consisting of at least one general partner and at
least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership
A __________ is an unincorporated business association consisting of at least one
general partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership - answerd. limited partnership
Which of the following is the most convincing evidence of a partnership arrangement?
a. Two or more persons are co-owners of property used in a business.
b. Two or more persons have a written agreement regarding a fundraiser for charity.
c. Two or more persons carry on a business for profit, but they have no formal
agreement.
, d. Two persons share a joint savings account in which they deposit money and share
the interest. - answerc. Two or more persons carry on a business for profit, but they
have no formal agreement.
Which of the following would lack the capacity to become a partner?
a. A trust.
b. An adjudicated incompetent.
c. A corporation.
d. All of these are correct. - answerb. An adjudicated incompetent.
Which of the following forms of business association may elect that only the
partners/members are taxed?
a. General partnerships.
b. Limited partnership.
c. Limited liability company.
d. All of these are correct. - answerd. All of these are correct.
A partnership agreement should include all but which one of the following?
a. The duties of the partners.
b. The capital contribution of the partners.
c. The agreement for dividing tax liability of the partnership.
d. The division of profits and losses. - answerc. The agreement for dividing tax liability of
the partnership.
A partner owes all of the following duties to the partnership except:
a. duty of loyalty.
b. duty of obedience.
c. duty of care.
d. duty of control. - answerd. duty of control.
A partner's interest is subject to the claims of that partner's creditors who may obtain a
judicial lien known as a(n) __________ against the partner's transferable interest.
a. assignability
b. distribution
c. changing order.
d. indemnification - answerc. changing order.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that
arose out of the operation of the business. Jess, a business owner, is not personally
liable if:
a. he is a sole proprietor of the business.
b. the business is a corporation and he is a shareholder.
c. he committed the tort.
d. he is a general partner of the business. - answerb. the business is a corporation and
he is a shareholder.
A legal entity separate and distinct from its owners referred to as shareholders, and
formed by filing articles of incorporation is a:
a. corporation.
b. limited liability company.
c. limited partnership.
d. general partnership. - answer a. corporation.
A partner who has no right to participate in control of the business and who has limited
liability is called a:
a. limited partner.
b. nominal partner.
c. secret partner.
d. general partner. - answer limited partner.
In choosing the form in which to conduct business, if ease of formation is the primary
concern, the owners would choose a:
a. corporation.
b. limited liability partnership.
c. limited partnership.
d. general partnership. - answer general partnership. A __________ is an
unincorporated business association consisting of at least one general partner and at
least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership
A __________ is an unincorporated business association consisting of at least one
general partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership - answerd. limited partnership
Which of the following is the most convincing evidence of a partnership arrangement?
a. Two or more persons are co-owners of property used in a business.
b. Two or more persons have a written agreement regarding a fundraiser for charity.
c. Two or more persons carry on a business for profit, but they have no formal
agreement.
, d. Two persons share a joint savings account in which they deposit money and share
the interest. - answerc. Two or more persons carry on a business for profit, but they
have no formal agreement.
Which of the following would lack the capacity to become a partner?
a. A trust.
b. An adjudicated incompetent.
c. A corporation.
d. All of these are correct. - answerb. An adjudicated incompetent.
Which of the following forms of business association may elect that only the
partners/members are taxed?
a. General partnerships.
b. Limited partnership.
c. Limited liability company.
d. All of these are correct. - answerd. All of these are correct.
A partnership agreement should include all but which one of the following?
a. The duties of the partners.
b. The capital contribution of the partners.
c. The agreement for dividing tax liability of the partnership.
d. The division of profits and losses. - answerc. The agreement for dividing tax liability of
the partnership.
A partner owes all of the following duties to the partnership except:
a. duty of loyalty.
b. duty of obedience.
c. duty of care.
d. duty of control. - answerd. duty of control.
A partner's interest is subject to the claims of that partner's creditors who may obtain a
judicial lien known as a(n) __________ against the partner's transferable interest.
a. assignability
b. distribution
c. changing order.
d. indemnification - answerc. changing order.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that
arose out of the operation of the business. Jess, a business owner, is not personally
liable if:
a. he is a sole proprietor of the business.
b. the business is a corporation and he is a shareholder.
c. he committed the tort.
d. he is a general partner of the business. - answerb. the business is a corporation and
he is a shareholder.
