Exam 14: Business Forms and Arrangements

Identify the basic issues that should be expressly addressed in a partnership agreement, including the description of each respective clause. Lastly, indicate when a partnership agreement would have to be revisited.

Identify the situations in which a court applying the Partnership Act would find a relationship to be something other than a partnership.

What possible advantages of each form of business vehicle should an entrepreneur contrast when attempting to achieve the profit motive?

In the context of a business failure, a bankrupt sole proprietor's diminished credit rating will likely be enduring.

Which of the following is a distinguishing characteristic of a product licensing arrangement?

Gerald and Tanji are general partners in a partnership with Mafasa and Rolf, who are also partners but with narrowly defined rights. What disadvantage do Mafasa and Rolf share?

Briefly discuss the liability of the partners for a breach of contract, including, among other things, the key point from this perspective.

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

What is the most likely reason, from a financial liability perspective, for a corporation to be viewed as the most risk-aversive form of business entity?

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?

What are the most likely sources of regulation a partnership must be aware of as it conducts its business each day?

Which of the following is an advantage of a partnership over a sole proprietorship?

Which of the following would most likely be a requirement of provincial legislation with respect to a limited liability partnership?

In what manner are a sole proprietorship and a partnership similar?

Len, Jill, and Mark own a partnership called Splats. Len's capital contribution to the partnership was $25 000, Jill's was $12 500, and Mark's was $20 000. Jill is duly registered as a limited partner and has acted solely as a financier. There is no agreement on sharing profits or losses among the partners, and none of them has drawn any income from Splats. The partnership borrowed $40 000 from the bank, but Splats eventually became insolvent and was unable to repay the loan. The bank sued Len and recovered the full $30 000 from him. When Len's lawyer gave him advice, what amount would he likely indicate Len is entitled to legally recover from Jill?

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.

List at least 6 of the 10 optional rules prescribed by the Partnership Act in each province with respect to the relations between partners.

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.

Which of the following is most likely to be indicated by a description that includes, among other things, the option to purchase a partner's interest and the valuation of interests?

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?