Exam 36: C: Sole Proprietorships and Franchises

Kirby is a manager of Jumpstart Fitness LLC,a limited liability company.Jumpstart is formed in a state that imposes fiduciary duties on LLC managers.Kirby owes these duties to

Metro Credit Corporation lends to borrowers to finance the construction of new houses and the sale and purchase of existing homes.Despite a decline in the housing market and other "red flags," Metro's directors do not change the lending practices of the firm,which suffers significant losses.The directors are most likely liable for a breach of

First Editions,Inc. ,a book dealer based in Texas,does business in all fifty states exclusively online.According to a decision of the United States Supreme Court,for an individual state to compel an out-of-state business to collect and remit state taxes,the business must have in that state

Logan is a director for Metal Masters Company.Ordinarily,Logan owes fiduciary duties only to

Sayer is an employee of Thorny Foliage Eradication,Inc.Sayer tweets messages about Thorny Foliage to employees and outside interested parties,including investors and others.According to the Securities and Exchange Commission,Sayer's messages are subject to

Cool Corporation makes energy-saving air conditioning units.Cool anticipates a change in the demand for its products as a consequence of climate change.One argument in favor of requiring Cool to disclose this information is that it could lead to

Twisted Dipsy Pretzels Inc.offers entrepreneurs the opportunity to operate a franchise under the Twisted Dipsy trade name as a member of a select group of dealers that engage in the retail pretzel-concession business.To potential investors,Twisted Dipsy makes earnings claims.For those claims,the franchisor must have