Exam 14: Choice of Business Entity, Sole Proprietorships, and Partnerships

Under the Revised Uniform Limited Partnership Act, limited partners may act as consultants and may contribute their expertise to the limited partnership.

Bill is a general partner in a four-member limited partnership with two general and two limited partners. The partnership is silent with regard to the duration of the partnership, and Bill wishes to retire.

In all forms of business entities, the entity itself pays taxes on money earned by or through the entity.

With regard to taxation of partnerships:

In a general partnership:

If someone successfully sues a sole proprietorship, he or she must exhaust the businesses assets before going after the principal's personal assets.

Regarding limited partners:

General partnerships are not created by filing a form with a government agency.

A franchise should be thought of as:

Sole proprietorships may sell equity in the company in order to raise funds.

A limited partnership requires:

Franchises are regulated by a franchise agreement.

How is the Revised Uniform Partnership Act similar to the Uniform Commercial Code in terms of gap filling?

The Revised Uniform Limited Partnership Act requires that there be a written partnership agreement regarding limited partnerships.

Mike lends money as a business loan to Kathy, who is capitalizing her start-up sole proprietorship named Kathy's Things. If Mike must sue for repayment, he would sue:

Principals generally have no personal liability for the business entity's debts regarding:

Tabletop, LP, is registered in Nebraska but operates the business in the state of Iowa. Nebraska will require that an in-state address and a ________ be identified to receive mail and accept legal documents.

Name the three specific events that are deemed events of dissociation by the Revised Uniform Partnership Act and are considered to be the most common.

In the absence of an agreement to the contrary, the Revised Uniform Partnership Act mandates that general partnership profits be split equally among the partners.

Sam and Dave are going to open a sporting goods store. They sign a written limited partnership agreement naming Dave as a limited partner and Sam as the general partner. Sam files a certificate of limited partnership with the state. Sam contributes $100,000 toward the start-up, while Dave contributes $200,000. They agree to split profits evenly because Sam will be working in the store and operating the day-to-day business. About a month after they open, the business is not doing well, so Dave starts becoming more involved. Soon he is requiring that Sam approve all purchases with him, and Dave is actively directing Jack, the sole other employee. One day, Geoff, a customer, is injured when a bowling ball falls off a shelf and shatters his foot. Geoff sues and is awarded a judgment of $1 million.