Question 1

Qatar Global Investments is a foreign entity-a firm owned and operated by investors in a foreign country.With respect to a limited liability company in the United States,Qatar Global can

Accepted Answer

A) act as a creditor,but cannot otherwise invest or participate. 
B) become a member. 
C) not become a member,but can participate in its operations. 
D) not become a member or otherwise participate in its operations.

Question 2

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture.When a dispute arises,Rafaela files a suit against Sequoia.The court is most likely to apply the same principles to this joint venture as it applies to

Accepted Answer

A) business trusts. 
B) cooperatives. 
C) corporations. 
D) partnerships.

Question 3

Transworld Import Company and USA Export,Inc.,form a business organization to engage in importing and exporting.Its property is held in the names of the members and its shareholders have personal liability.This organization is

Accepted Answer

A) a business trust. 
B) a joint stock company. 
C) a joint venture. 
D) a syndicate.

Question 4

Limited personal liability obviates the need to obtain for insurance for significant business liability risks.

Accepted Answer

A) True 
 B)False

Question 5

Lauren,Marcella,and Norell form a syndicate to buy a professional soccer franchise.This syndicate could be set up as

Accepted Answer

A) a joint venture. 
B) a corporation. 
C) a sole proprietorship. 
D) a limited liability company.

Question 6

Unless a limited liability company indicates otherwise,the Internal Revenue Service automatically taxes it as a partnership.

Accepted Answer

A) True 
 B)False

Question 7

A member of a limited liability company (LLC)has the power and the right to dissociate from the LLC at any time.

Accepted Answer

A) True 
 B)False

Question 8

StartUp Investors,LLC,is a limited liability company without a written operating agreement.Among the members,a dispute arises concerning the division of profits.Under most LLC statutes,the profits will be

Accepted Answer

A) distributed according to the members' proportionate shares of ownership in the firm. 
B) divided equally among the members. 
C) forfeited to the state. 
D) reinvested in the business until the dispute is resolved.

Question 9

Gabriella is a beneficiary of a business trust.As a beneficiary,she is required to

Accepted Answer

A) distribute the trust's profits. 
B) assume responsibility for the trust's debts. 
C) draft a written trust agreement. 
D) none of the choices.

Question 10

A limited liability company can be taxed as a partnership.

Accepted Answer

A) True 
 B)False

Question 11

The law considers all new,single-owner businesses to be sole proprietorships unless the owner affirmatively adopts some other form.

Accepted Answer

A) True 
 B)False

Question 12

Nichelle,Owen,and Porter organize a nonprofit business-Quality Markets,Inc.-to buy groceries from wholesalers and sell them to consumers who buy a membership in Quality Markets.Because the firm is a nonprofit entity,it is able to sell the groceries for less than a commercial grocer could.What form of business organization is Quality Markets Is it significant that Quality Markets is incorporated

Accepted Answer

The answer of Nichelle,Owen,and Porter organize a nonprofit business-Quality Markets,Inc.-to...

Question 13

Location! Realty,LLC,is a limited liability company.Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Accepted Answer

A) all states. 
B) every state in which its members are citizens. 
C) no state. 
D) only the state in which it was formed.

Question 14

Limited liability companies are entities apart from their owners.

Accepted Answer

A) True 
 B)False

Question 15

A limited liability company must be managed by nonmembers.

Accepted Answer

A) True 
 B)False

Question 16

A joint stock company is generally treated as a partnership.

Accepted Answer

A) True 
 B)False

Question 17

Most courts apply the same principles to joint ventures as they apply to partnerships.

Accepted Answer

A) True 
 B)False

Question 18

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture.Oni can participate in the venture's management

Accepted Answer

A) only to the extent that she assumes liability for the venture's debts. 
B) only to the extent of her investment in the venture. 
C) to any extent. 
D) to no extent.

Question 19

As the beneficiary of a business trust,Kevin's liability for trust debts and obligations is

Accepted Answer

A) limited to his capital investment in the trust. 
B) limited to his personal assets. 
C) nothing. 
D) unlimited.

Question 20

As the trustee of a business trust,Bertoldi is required to

Accepted Answer

A) distribute the trust's profits. 
B) assume responsibility for the trust's debts. 
C) draft a written trust agreement. 
D) none of the choices.

Exam 31: Other Organizational Forms for Small Businesses

Qatar Global Investments is a foreign entity-a firm owned and operated by investors in a foreign country.With respect to a limited liability company in the United States,Qatar Global can

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture.When a dispute arises,Rafaela files a suit against Sequoia.The court is most likely to apply the same principles to this joint venture as it applies to

Transworld Import Company and USA Export,Inc.,form a business organization to engage in importing and exporting.Its property is held in the names of the members and its shareholders have personal liability.This organization is

Limited personal liability obviates the need to obtain for insurance for significant business liability risks.

Lauren,Marcella,and Norell form a syndicate to buy a professional soccer franchise.This syndicate could be set up as

Unless a limited liability company indicates otherwise,the Internal Revenue Service automatically taxes it as a partnership.

A member of a limited liability company (LLC)has the power and the right to dissociate from the LLC at any time.

StartUp Investors,LLC,is a limited liability company without a written operating agreement.Among the members,a dispute arises concerning the division of profits.Under most LLC statutes,the profits will be

Gabriella is a beneficiary of a business trust.As a beneficiary,she is required to

A limited liability company can be taxed as a partnership.

The law considers all new,single-owner businesses to be sole proprietorships unless the owner affirmatively adopts some other form.

Location! Realty,LLC,is a limited liability company.Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Limited liability companies are entities apart from their owners.

A limited liability company must be managed by nonmembers.

A joint stock company is generally treated as a partnership.

Most courts apply the same principles to joint ventures as they apply to partnerships.

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture.Oni can participate in the venture's management

As the beneficiary of a business trust,Kevin's liability for trust debts and obligations is

As the trustee of a business trust,Bertoldi is required to