Bus Law Quiz - Ch19

CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed otherwise, participants in the firm's management will be considered to include

All members

In a limited liability company, members cannot participate in its management.

False

A partner may use partnership property for any purpose without accounting to the partnership.

False - must consult other partners

A limited partner has a right to participate in the management or operation of the partnership.

False, has NO right to participate

A limited liability company is operated in compliance with state law.

True

A sole proprietor may own and manage any type of business.

True

An operating agreement for a limited liability company need not be in writing.

True

In most states, a general partner is jointly and severally liable for all partnership obligations.

True

In some states, business trusts pay corporate taxes.

True

Most franchise agreements provide that termination must be "for cause."

True

One of the disadvantages of a sole proprietorship is that the owner is liable for the losses of the business.

True

Cal sells "DownSize," a weight-reduction program, from a Web site, in competition with Eat-Less Inc.'s product "Fit 'n Trim." Eat-Less files a suit against Cal, alleging in part that he is a sole proprietor, but his enterprise should be deemed a different form of business. Cal's enterprise should most likely be considered

a sole proprietorship because Cal is a sole proprietor.

Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed by the Uniform Partnership Act

in the absence of an express agreement.

Leigh wants to go into the business of construction contracting. Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be

its greater organizational flexibility.

Tundi is a partner in WooHoo! Amusement, a new partnership. A WooHoo! debt comes due. Tundi is

personally liable to the full extent of the debt.