Exam 14: Business Forms and Arrangements

Rozzi,Shawn,and Rafael have entered into a written limited partnership agreement.Which of the following would be the most likely action needed to ensure the legal recognition of the limited partnerships' status?

The potential for a board management base that exists in the corporation creates many levels of authority that can be an impediment to decision making.

Briefly discuss the concept of joint liability and explain how joint liability impacts the liability exposure of partners in a partnership.

Which of the following would pertain to provincial partnership legislation relating to the relationship between business partners and outsiders?

A business with no partners and no board of directors to report to is typically considered to be independent and positioned to act quickly when required.Which of the following is also typical of this form of business?

Which of the following forms of business organization provides the most control but also the greatest liability risk for the owner?

A partnership is a simple form of legal relationship that automatically arises when two or more people do business together with the objective of making a profit.

Triston and Quinn jointly own property under a documented agreement.If a dispute arises between the parties,which of the following would immediately alert a lawyer to the possibility of a court concluding a partnership exists?

A court is deliberating whether WestWood Dental Offices should be bound by obligations that allegedly arose by virtue of apparent authority.The claim relates to a purchase agreement for dental imaging equipment.What will the court most likely strongly rely on when arriving at a decision?

On dissolution and after all a partnership's debts are satisfied,describe how and in what order legislation requires any excess to be applied.

Which of the following statements best describes how a partnership comes into existence?

Which of the following is a positive feature of carrying on business as a corporation?

Discuss the distribution of the profits of a corporation.

Emily,Harry,and Ron are partners in a business partnership called Trinkets.Emily contributed $15 000 to the business,Harry $10 000,and Ron $5000.The partners agreed among themselves that they will share partnership profits and losses in proportion to their contributions.In addition,the partnership borrowed $30 000 from the bank.The business didn't work out,and Trinkets is unable to repay the loan.The bank sued Emily personally.She repaid the full $30 000 and then sued Harry and Ron.What amounts may Emily be legally entitled to recover from her partners?

Choosing how to own a business is of little consequence to the ultimate determination of who is financially liable for the business.

Briefly discuss the advantages of selecting a corporation as one's form of business over a partnership or proprietorship.

Rose,Lily,and Fawn were shareholders in Style Co.,an incorporated company with limited liability.Each bought one-third of the shares in Style Co.for an aggregate payment of $15 000 each.The corporation borrowed $60 000 from the bank to finance its operations.The bank required personal guarantees from all shareholders for the full amount of the loan.Style Co.became insolvent,and the bank ultimately sued each of the shareholders to recover the $60 000.In receiving advice from their lawyer,what amount would he most likely indicate to be the maximum amount that could be recovered from any one of them?

Which of the following is a characteristic of a franchisor-franchisee relationship?

A partnership is not a distinct legal entity,and therefore any income of the partnership is allocated to the partnership.

Which of the following would most strongly support Martina's agreement to an allotment of a 25 percent interest in her partnership with Lorenzo and Marcella?