Business law 3301 EXAM 4 Test
Questions 2025/2026 With Accurate
Answers.
Sole Proprietorship - Answer business owned and operated by one person; the owner is the
business and the business is the owner
Entrepreneur - Answer Someone who initiates and assumes the financial risk of a new
enterprise
Advantages of Sole Proprietorship - Answer sole owner
low compliance
right to all profits
control
only pays personal income taxes
Disadvantages of Sole Proprietorship - Answer unlimited personal liability
cannot be passed down after death (only the assets)
General partnership - Answer Two or more owners; each owner is fully responsible for
liabilities.
Elements of a partnership - Answer A sharing of profits and losses.
A joint ownership of the business.
An equal right to be involved in the management of the business.
Partnerships may hold the title to ________________________ rather than in the names of the
individual partners. - Answer real or personal property in its name
pass-through entity - Answer A business entity that has no tax liability. The entity's income is
passed through to the owners, and they pay taxes on the income.
, Partnership agreement - Answer an agreement that clearly states what each partner of a
business has agreed to
Partnership duration - Answer The partnership agreement MAY specify the duration of the
partnership in terms of a date or the completion of some undertaking
Partnership by estoppel - Answer occurs because someone does or says something that
leads a third party to believe that a co-ownership exists.
The Uniform Partnership Act - Answer United States legislation that serves as a guide for
legally formulating a general partnership agreement
The rights of partners under the UPA - Answer management
interest (profits)
compensation
inspection of books
property rights
Partnership property - Answer includes property acquired by partnership and in the name of
partnership
Partners duties - Answer duty of care
duty of loyalty
Duty of care - Answer refraining from "grossly negligent or reckless conduct, intentional
misconduct, or a knowing violation of law"
not liable for negligence
Duty of loyalty - Answer requires a partner to account to the partnership for "any property,
profit, or benefit" derived by the partner in the conduct of the partnership's business or from
the use of its property.
refrain from competing with partnership
Partner liability - Answer As a general rule, a partner is not liable for her partner's personal
Questions 2025/2026 With Accurate
Answers.
Sole Proprietorship - Answer business owned and operated by one person; the owner is the
business and the business is the owner
Entrepreneur - Answer Someone who initiates and assumes the financial risk of a new
enterprise
Advantages of Sole Proprietorship - Answer sole owner
low compliance
right to all profits
control
only pays personal income taxes
Disadvantages of Sole Proprietorship - Answer unlimited personal liability
cannot be passed down after death (only the assets)
General partnership - Answer Two or more owners; each owner is fully responsible for
liabilities.
Elements of a partnership - Answer A sharing of profits and losses.
A joint ownership of the business.
An equal right to be involved in the management of the business.
Partnerships may hold the title to ________________________ rather than in the names of the
individual partners. - Answer real or personal property in its name
pass-through entity - Answer A business entity that has no tax liability. The entity's income is
passed through to the owners, and they pay taxes on the income.
, Partnership agreement - Answer an agreement that clearly states what each partner of a
business has agreed to
Partnership duration - Answer The partnership agreement MAY specify the duration of the
partnership in terms of a date or the completion of some undertaking
Partnership by estoppel - Answer occurs because someone does or says something that
leads a third party to believe that a co-ownership exists.
The Uniform Partnership Act - Answer United States legislation that serves as a guide for
legally formulating a general partnership agreement
The rights of partners under the UPA - Answer management
interest (profits)
compensation
inspection of books
property rights
Partnership property - Answer includes property acquired by partnership and in the name of
partnership
Partners duties - Answer duty of care
duty of loyalty
Duty of care - Answer refraining from "grossly negligent or reckless conduct, intentional
misconduct, or a knowing violation of law"
not liable for negligence
Duty of loyalty - Answer requires a partner to account to the partnership for "any property,
profit, or benefit" derived by the partner in the conduct of the partnership's business or from
the use of its property.
refrain from competing with partnership
Partner liability - Answer As a general rule, a partner is not liable for her partner's personal
