chapter 26 business law and ethics
dissolution
Change in partnership due to the actions of one or more partners, by law or by court decree
false
Corporations are the most numerous legal form of business organization.
true
Corporations usually have greater financial strength than do other forms of business organizations.
yes
Is a unanimous agreement among all partners necessary to make any change in the written partnership agreement?
corporations can be shareholders
LLC
formed by filing articles of organization
LLC
the owners are called members
LLC
no limitations on the number of owners
LLC, and Corporation
true
The privately held real and personal property as well as the business property of a sole proprietor may be used to satisfy the debts of her or his business.
true
The sole proprietor owns all the assets and has full personal liability for all the debts of his or her sole proprietorship.
each partner has the ______ to carry on the business
authority
partners in trading partnerships have the power to _________ money
borrow
termination
business stops and is no more
a partner cannot usually conduct a business that would __________ with the partnership
compete
excellent ability to attract professional managers
corporation
most difficult business to form
corporation
directors set policy and appoint officers
corporation, s- corp
must have a charter
corporation, s-corp
party the partnership owes money to
creditor
A step in the termination of a partnership that precedes the winding-up process
dissolution
partners usually have ___________ shares in the profits
equal
A minor entering into a partnership agreement does not retain all the rights and privileges of a minor. a. True b. False
false
A partner with a large amount of outside income may assume all of the losses of a partnership for tax purposes
false
A person who invests in a corporation runs the risk of losing all of his or her personal worth due to liability issues.
false
Partnership is the form of business organization that is used most often.
false
the ULPA and RULPA statutes govern the formation of general partnerships.
false
No filing but should have Partnership Agreement to avoid problems
general partnership
moderately hard to form
general partnership, llc, llp, limited partnership
In tenancy in partnership, each partner is a co-owner of the entire partnership property yet
is not the sole owner of any specific piece.
Partners who are liable only to the extent of their involvement
limited partners
owners share profits and losses in whatever proportions they agree upon
limited partnership, general partnership, LLP
partners usually share profits and ______ equally
losses
partner that is liable for both existing and new debts
new
Terms and conditions that partners agree on to guide them in managing the partnership
partnership agreement
non-resident aliens cannot be shareholders
s-corp
the limit on stockholders is 100
s-corp
business form that does NOT have to end with the death of its owners
s-corp, corp
business is a separate entity from the owners
s-corp, corporation
shareholders have limited liability
s-corp, corporation
most common form of business
sole
The ___________________ owns all the assets and has full personal responsibility for all the debts of his or her company.
sole proprietor
easiest business to form
sole proprietorship
owner has full managerial control
sole proprietorship
owned by one person
sole proprietorship and llc
The three principal forms of business organization are the
sole proprietorship, the partnership, and the corporation
no legal requirements for organizing
sole, general partnership
owner or owners have full personal liability
sole, general partnership
terminates upon owners death
sole, llc, llp, limited partnership, general partnership
A general partner is personally liable for the loss caused by another partner's errors in judgment.
true
The privately held real and personal property as well as the business property of a sole proprietor may be used to satisfy the debts of her or his business.
true
_____________ agreement of the partners is required before a written partnership agreement can be changed
unanimous
a partner who ___________ is still liable for the firm;s debts
withdraws
true
A corporation can have a perpetual existence.
false
A corporation is an association of two or more persons to carry on a business for profit.
nominal partner
A partner who holds him or herself out as a partner but is not actually a partner
dormant partner
A partner who is neither known to the public as a partner nor active in management
secret partner
A partner who is not known to the public as a partner yet participates in management
silent partner
A partner who may be known to the public as a partner but takes no active part in management
true
A partnership ends if one partner withdraws or dies.
partnership at will
A partnership in which a partner may normally withdraw at any time without liability to associates
general partnership
A partnership in which all partners assume unlimited personal liability for debts of the firm
joint venture
A partnership in which two or more persons or firms combine their resources to complete one complex project
trading partnership
A partnership that buys and sells goods and services commercially
limited partnership
A partnership that has at least one general partner with unlimited liability and at least one partner with limited liability
special partnership
A partnership that is formed for a single transaction
non-trading partnership
A partnership that provides professional and noncommercial assistance
false
A person who invests in a corporation runs the risk of losing all of his or her personal worth. a. True b. False
yes
Can a partner who withdraws from a partnership immediately begin to compete with the firm unless restricted by the partnership agreement?
winding-up period
A time during which all partnership business in process at the time of dissolution is concluded
yes
Can a partner with a large amount of outside income ever take all the losses of a partnership for tax purposes?
no
Can a partner retain any profit or benefit without informing the other partners?
yes
Do all partners have the right to inspect the partnership books at any reasonable time unless otherwise agreed?
no
Do partners in a non-trading partnership usually have the power to borrow money for partnership purposes?
yes
Does a partner have a fiduciary duty to the other partners?
Being moderately hard to form is a business characteristic of a
General partnership
yes
Is a general partner personally liable for the loss caused by another partner's errors in judgement?
incorporation outside the US is prohibited (forbidden)
S-corp
false
The owner of a sole proprietorship must obtain a charter from the state.
no
Under the UPA, do partners that contribute more capital to the business have a right to cast more than one vote?
true
Under the provisions of the UPA, if utilized, general partners will share all profits and losses equally.
winding-up period
after dissolution All business in progress is completed Creditors paid, if possible Each partner's share of debts accounted for OR Each partner's share of remaining money
each partner acts as a(n) ________ for the firm
agent
