Exam 14: Business Forms and Arrangements

List at least six of the ten optional rules prescribed by the Partnership Act in each province with respect to the relations between partners.

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

Glen,Dale,and Al are partners who own Fizz.Glen made capital contribution of $5000,Dale's was $15 000 and Al's was $10 000.Glen is a general partner and he oversees management of the Fizz business.The partnership borrowed $30 000 from the bank.The partners have no agreement relating to the sharing of profits and losses.Fizz became insolvent and unable to repay the loan.The bank sued Dale personally and recovered the full $30 000 from him.Dale then sued Glen.When Dale's lawyer provided him with advice,what amount did she likely indicate he would be able to legally recover from Glen?

Briefly discuss the requirements for the creation of a limited liability business entity,including an explanation of the important effects meeting the requirements will have.

An unincorporated business organization with a sole owner is legally known as a sole proprietorship.

What is a strategic alliance between commercial parties?

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

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.

Raven is the proprietor of Read4Life,a reading tutor service.Raven has had to comply with such matters as zoning bylaws,tax laws,and fire regulations.In law,how are these various types of regulations classified?

Briefly discuss the significance of "going it alone" with respect to raising capital for a business.

The vehicle most commonly used as an investment device is a limited liability partnership,in which at least one partner has unlimited liability and the rest have limited liability.

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

The freedom from the restrictions of personal legal responsibility for the obligations of the business is a tremendous advantage to the sole proprietor.

With respect to personal liability,which of the following strongly supports the need for each one of the partners to be aware of each and every obligation incurred by the partnership?

The duration of existence of a proprietorship is limited by life of the owner,whereas a partnership is terminated by agreement and a corporation is perpetual unless dissolved.

Which of the following is a common characteristic of provincial Partnership Acts?

All of Canada's common law provinces have a Partnership Act modelled on the British act of the same name.

Voyageur Enterprises Inc.will continue in existence perpetually unless it is dissolved through voluntary surrender of its legal status or by court order for failing to comply with statutory regulations.

The law restricts a partner from making a personal profit from partnership property because that would be putting that partner's interests ahead of the other partners.