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. The revised uniform partnership act is the model statute that covers which of the following partnerships?
2. The RUPA imposes both _________ liability on general partners for debts and liabilities of the partnership
3. A limited partnership is composed of
4. The following methods are used by partnerships to raise capital:
5. Romulus, Remus, and Caesar form RRC L.P., a limited partnership to develop land for a shopping center. Romulus and Remus are GP’s, while Caesar is a limited partner. Romulus borrows money for the partnership from a local bank without Remus’s or Caesar’s knowledge. If the business assets of RRC are not sufficient to pay back the loan, where may the bank turn for the balance of the loan?
6. The following are true about withdrawal under the RULPA:
7. The following are not covered by the Revised Uniform Partnership Act:
8. A general partnership is composed of
9. A partnership can NOT do the following to raise capital:
10. The following are NOT true about withdrawal under the RULPA:
11. A limited partnership
12. The following are important factors in choosing a business entity:
13. Those with ownership interests in a business entity are called
14. The following entities is possible for a business with only one principal
15. The chief drawback to the sole-proprietorship form of entity is
16. Boswell is a sole proprietor and signs a 5 year lease for office space with Roberts. Boswell defaults on the lease. Roberts obtains a judgment against Boswell for $100,000; Boswell’s business is out of assets, thus
17. The following are elements of a general partnership:
18. a business entity has at least one or more ________, who are the owners of the company
19. The following entities are possible for a business with 4 principals:
20. The following are not elements of a general partnership:
21. The following are elements of a general partnership:
22. Lewis wishes to break off from Clarke Company and form his own business with 100 percent ownership for himself. The following form of entity are available to Lewis for his new business
Chapter 15:
LLC: hybrid entity that files articles of organization
LLP: partnership files statements of qualification
Franchises: Business arrangement centering on a contract
Business Trusts: Rarely used nonstatutory business arrangement
1. The principals in an LLC are referred to as
2. The following are true about the LLC form of entity:
3. An LLC is taxed by the pass-through taxation system
4. Julian, Curt, and Drew are all principals in JCD Associates LLC. In the operating agreement they agree that any principal is permitted to bind the LLC JDC Associates are:
5. Members of High Rate Return LLC conspired to commit investment fraud. One investor obtains a $50,000 judgment against High Rate Return, but the company is without assets. Thus
6. Arnold no longer wants to continue being a member of Ace High LLC. His right to withdraw is called
7. In an LLC, the owners are known as
8. Julian, Curt, and Drew are all principals in JCD Associates LLC. In the operating agreement, they appoint Julian to manage all daily business operations. This business is:
9. Insiders at WidgetCo LLC looted the company and shut down operations, leaving creditors in the cold. One creditor obtains a $50,000 judgment against WidgetCo, but the company is without assets. Thus,
10. Julian, Curt, and Drew are all principals in JCD Associates LLC. In the operating agreement, they agree that Julian will be paid a salary to run day-to-day operations, but any principal is permitted to sign a contract or otherwise bind the LLC. This business is:
11. Members of High Flyer LLC made knowingly false statements on an application with local bank in order to obtain a loan. After high flyer defaults on the loan, local bank obtains a $50,000 judgment against High Flyer, but the company is without assets. Thus
Chapter 16
Inadequate Capitalization: Shell Corporation with No Assets
Nature of Claim: Involuntary Creditor
Fraud: Lying on a loan application
Corporate formalities: Failure to file required forms
1. The formation of a corporation is governed by
2. Corporation that do not sell ownership interests through a broker to the general public or financial institutions are categorized
3. Fresh Farm Corporation operates produce stands in Georgia and in its home state of Florida. It is incorporated in Florida. In Florida, which category of corporation is FFC?
4. The following are typically handled at an initial organizational meeting:
5. The following factors are considered by a court when judging whether fairness demands that the corporate veil be pierced:
22. Start-up Corporation is a newly formed entity applying for a bank loan. The bank will likely require that Start-up’s principals sign
23. BigCo planned on a significant expansion of its operations. It intends to capitalize this expansion through $5 million in debt and therefore wants the lowest rate possible and to use specific assets to secure the debt. The following is the best option for capital
24. The following are requirements for qualification as a Subchapter S corporation:
25. The model law used by more than half the states to govern formation and internal governance of a corporation is the
Chapter 17
Investment: may be a cash or noncash instrument
Commonality: may be horizontal or vertical
Profit Expectations: opportunity for return on the investment
Efforts of Others: promotes must be primary source of profits
1. Securities transactions occur in two settings. One is the original and reissuance of securities by a business to raise capital also known as the
2. A company issuing securities to the public market for the first time does so through an
3. The following are considered equity instruments:
6. The instruments provided to the investor with a return based on profitability of the company are:
7. The following are considered debt instruments:
8. For investors wanting to earn a fixed rate of returns rather than a return based on profitability, companies may raise capital by issuing
9. One of the two types of security transactions is purchase and sale of securities between investors. This is known as the
10. The following are NOT considered equity instruments:
13. The following is an example of a debt instrument:
16. The Securities Act of 1934 requires disclosures related to:
18. State securities laws are commonly known as
20. The ’34 act regulates the relationship between existing shareholders and the corporation by requiring disclosures related to
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