Question 1

Limited liability is not a feature of general partnership law.

Accepted Answer

A) True 
 B)False  True

Question 2

The names of limited partners and investors must be included on the certificate of limited partnership.

Accepted Answer

A) True 
 B)False  False

Question 3

An LLC is essentially identical to a subchapter S corporation.

Accepted Answer

A) True 
 B)False  False

Question 4

All of the following statements regarding LP's are not true, except: _______.

Accepted Answer

A)  The words limited partnership or simply LP must appear in the firm's name. 
B)  General partners cannot avoid personal liability by incorporating. 
C)  Limited partners can lose their liability limitation if they participate in the control of the business. 
D)  If sued, limited partners can lose more than their capital investment. 
A)  The words limited partnership or simply LP must appear in the firm's name. 
B)  General partners cannot avoid personal liability by incorporating. 
C)  Limited partners can lose their liability limitation if they participate in the control of the business. 
D)  If sued, limited partners can lose more than their capital investment.

Question 5

Which form of business entity was created primarily to professionals from malpractice liability generated by other owners in the firm?

Accepted Answer

A)  the limited partnership 
B)  the limited liability partnership 
C)  the limited liability company 
D)  the general partnership 
A)  the limited partnership 
B)  the limited liability partnership 
C)  the limited liability company 
D)  the general partnership

Question 6

While most states have adopted limited liability company statutes, few states have created statutes allowing the formation of limited liability partnerships.

Accepted Answer

A) True 
 B)False

Question 7

Every limited partnership must have at least one general partner.

Accepted Answer

A) True 
 B)False

Question 8

Both general partnerships and limited partnerships are created only through the process of executing a certificate.

Accepted Answer

A) True 
 B)False

Question 9

An LLC may be managed directly by its owners.

Accepted Answer

A) True 
 B)False

Question 10

Under the RULPA, a limited partner probably will not lose his limited liability in any of the following circumstances unless: ______.

Accepted Answer

A)  the limited partner becomes a contractor for, or an agent or employee of, the limited partnership or of a general partner. 
B)  the limited partner consults with and advises a general partner regarding the partnership business. 
C)  the limited partner votes on partnership matters, such as dissolving and winding up the limited partnership or removing a general partner. 
D)  the partners fail to file a limited partnership certificate. 
A)  the limited partner becomes a contractor for, or an agent or employee of, the limited partnership or of a general partner. 
B)  the limited partner consults with and advises a general partner regarding the partnership business. 
C)  the limited partner votes on partnership matters, such as dissolving and winding up the limited partnership or removing a general partner. 
D)  the partners fail to file a limited partnership certificate.

Question 11

A limited liability company: ______.

Accepted Answer

A)  is the same type of business entity as a "Subchapter S" corporation. 
B)  has no restriction on the number of owners. 
C)  is taxed in a manner similar to that of a corporation. 
D)  has unlimited life regardless of what happens with any individual member. 
A)  is the same type of business entity as a "Subchapter S" corporation. 
B)  has no restriction on the number of owners. 
C)  is taxed in a manner similar to that of a corporation. 
D)  has unlimited life regardless of what happens with any individual member.

Question 12

In every state, LLP partners remain ______ liable for their own negligence with ______ liability for the wrongful acts of those whom they directly supervise and control.

Accepted Answer

A)  personally, partial 
B)  fully, partial 
C)  fully, unlimited 
D)  contributorily, unlimited 
A)  personally, partial 
B)  fully, partial 
C)  fully, unlimited 
D)  contributorily, unlimited

Question 13

A limited partnership can be formed by one (1) or more __________ partners and one (1) or more __________ partners.

Accepted Answer

A)  unreserved; reserved 
B)  active; silent 
C)  licensed; unlicensed 
D)  general; limited 
A)  unreserved; reserved 
B)  active; silent 
C)  licensed; unlicensed 
D)  general; limited

Question 14

All of the following statements concerning LLC's are incorrect except: ______.

Accepted Answer

A)  Federal income tax is due on its income as an entity. 
B)  Income flows through to the members based on their proportionate interests in the company. 
C)  No filing is necessary to form a limited liability company. 
D)  All members enjoy unlimited liability. 
A)  Federal income tax is due on its income as an entity. 
B)  Income flows through to the members based on their proportionate interests in the company. 
C)  No filing is necessary to form a limited liability company. 
D)  All members enjoy unlimited liability.

Question 15

An LLC is a legal entity with the authority to conduct business in its own name.

Accepted Answer

A) True 
 B)False

Question 16

LLP statutes are designed to permit the conversion of existing general partnerships into limited liability partnerships.

Accepted Answer

A) True 
 B)False

Question 17

A court can disregard the LLC entity to hold one or more members personally liable in any of the following situations, except: _______.

Accepted Answer

A)  when members fail to follow formalities. 
B)  when members commingle company and personal funds. 
C)  when members ignore the articles of organization. 
D)  when members vote to make substantive changes to the operating agreement. 
A)  when members fail to follow formalities. 
B)  when members commingle company and personal funds. 
C)  when members ignore the articles of organization. 
D)  when members vote to make substantive changes to the operating agreement.

Question 18

Limited partners may contribute only cash as their capital contributions.

Accepted Answer

A) True 
 B)False

Question 19

Under the RULPA, a limited partner may contribute: ______.

Accepted Answer

A)  cash only. 
B)  property only. 
C)  services only. 
D)  cash, property, and services. 
A)  cash only. 
B)  property only. 
C)  services only. 
D)  cash, property, and services.

Question 20

Owners of an LLC are known as shareholders.

Accepted Answer

A) True 
 B)False

Exam 42: LPs, LLCs, and LLPs

Limited liability is not a feature of general partnership law.

The names of limited partners and investors must be included on the certificate of limited partnership.

An LLC is essentially identical to a subchapter S corporation.

All of the following statements regarding LP's are not true, except: _______.

Which form of business entity was created primarily to professionals from malpractice liability generated by other owners in the firm?

While most states have adopted limited liability company statutes, few states have created statutes allowing the formation of limited liability partnerships.

Every limited partnership must have at least one general partner.

Both general partnerships and limited partnerships are created only through the process of executing a certificate.

An LLC may be managed directly by its owners.

Under the RULPA, a limited partner probably will not lose his limited liability in any of the following circumstances unless: ______.

A limited liability company: ______.

In every state, LLP partners remain ______ liable for their own negligence with ______ liability for the wrongful acts of those whom they directly supervise and control.

A limited partnership can be formed by one (1) or more __________ partners and one (1) or more __________ partners.

All of the following statements concerning LLC's are incorrect except: ______.

An LLC is a legal entity with the authority to conduct business in its own name.

LLP statutes are designed to permit the conversion of existing general partnerships into limited liability partnerships.

A court can disregard the LLC entity to hold one or more members personally liable in any of the following situations, except: _______.

Limited partners may contribute only cash as their capital contributions.

Under the RULPA, a limited partner may contribute: ______.

Owners of an LLC are known as shareholders.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters

In every state, LLP partners remain liable for their own negligence with liability for the wrongful acts of those whom they directly supervise and control.

A limited partnership can be formed by one (1) or more partners and one (1) or more partners.