LEB Ch. 13
in the absence of an agreement, which of the following are used as default provisions for a limited partnership?
RULPA (revised uniform limited partnership act)
the RUPA provides that partners have the power to bind the partnership to ______ obligations regardless of the knowledge of the other partners.
contractual
which of the following does not require any formal documents to be filed with the government in order to legally exist?
corporation general partnership * limited liability company limited partnership
principal funding and commercial lenders are viable funding options for general partnerships
partnership
which of the following is the simplest multiple-person business entity?
partnership
a(n) _____ ______ ______ is where the partners have not agreed on a definite duration of the partnership.
partnership at will
which of the following is the term used to describe an entity that, for tax purposes, means that the partnership entity pays no level of corporate tax?
pass through
The _____________ _________ is triggered when the principals wish to dissolve the partnership after dissociation.
winding up
discharging partnership liabilities and settling a partnership's business are examples of activities that occur during
windup
when a principal desires to leave a limited partnership the RULPA defines this as
withdrawal
when a principal desires to leave a limited partnership, the RULPA defines this act of separation as which of the following:
withdrawal
a partner withdrawing that violates the partnership agreement or if a partner withdraws before the agreed-upon expiration are examples of
wronfful dissociation
which of the following oversees the regulation of franchisors?
FTC
FTC
Federal Trade Commission
________ is the factor that addresses how easy it is to form and maintain a business entity.
Formation
a joint venture is typically governed by the same legal principles as a
general partnership
which of the following is a correct statement regarding general partner liability under general partnership law?
a partner's personal assets are exempt from partnership debt not all partners will be liable for partnership debts a partner's personal assets are subject to partnership debt *
Under the RULPA, a general partner may withdraw from a limited partnership so long as all partners agree in writing to continue the partnership and
at least one partner remains
which of the following may a limited partner perform for a limited partnership?
bind partnership contribute expertise * supervise employees make day to day management decisions
when forming a limited partnership, name, address, and partner capital contribution are typically items found in the
certificate of limited partnership
Which of the following is typically filed with the secretary of state's office when forming a limited partnership?
certificate of limited partnership
two or more people operating as co-owners of a business for profit is called a:
general partnership
if a wrongful dissociation occurs, the wrongfully dissociated partner is liable for _____ caused by the dissociation.
damages
when a principal wishes to leave a partnership, the RUPA defines this act of separation as which of the following:
dissociation
generally speaking, a general partner may withdraw from a limited partnership at any time without causing _____ of the partnership.
dissolution
when a principal desires to leave a limited partnership, the RULPA defines this act of separation as which of the following?
dissolution dissociation termination withdrawal *
when a principal wishes to leave a partnership, the RUPA defines this act of separation as which of the following:
dissolution termination dissociation * manipulation
Unless the parties otherwise agree, the RUPA states that partners providing labor to the partnership are:
entitled to a greater than the fair market value of services provided entitled to a fair wage for the services provided entitled to a wage, but less than fair market share not entitled to any compensation other than a share of profits *
unless the parties otherwise agree, the RUPA states that partners providing labor to the partnership are:
entitled to a wage, but less than the fair market value of such services not entitled to any compensation other than a share of profits * entitled to greater than the fair market value of the services provided entitled to a fair wage for the services provided
Which of the following is a partnership where the principals agree to an ongoing business relationship?
express
which of the following is a partnership where the principals agree to an ongoing business relationship?
express
the good _____ standard require partners to exercise appropriate care when conducting partnership business.
faith
true or false: a written partnership agreement is required for an entity to be able to exist as a partnership?
false
true or false: to form a general partnership, a formal document must be field with the government.
false
The _____ _______ ______ (FTC) tries to promote the full disclosure of all information relating to a franchise company prior to the franchisee's investment.
federal trade commission
duties requiring partners to act in the best interest of the partnership are known as _______ duties.
fiduciary
An arrangement of a continuing commercial relationship for the right to operate a business pursuant to the franchisor's trade name or to sell the seller's branded goods is a(n)
franchise
The franchisor and the franchisee are typically governed by the _______ agreement.
franchise
Time limit, franchise fees, and royalties are common items governed by a(n)
franchise agreement
The ______ is given the right to operate the business and use the business's trade secrets and products.
franchisee
A business entity with a proven track record of success is known as the
franchisor
A(n) ______ partnership is typically defined as an association of two or more people or entities who are co-owners and co-managers of a business and share in the profits of an ongoing business operation
general
in a limited partnership, what type of partner is typically responsible for filing the information return with taxing authorities?
general
what type of partner is also referred to as a managing principal?
general
a limited partner will lose his or her limited liability protection for engaging in negligent or _______ act while acting within the scope of partnership duties
illegal
a limited partner will lose his or her limited liability protection for engaging in a negligent or ___________ act while acting within the scope of partnership duties.
illegal/unlawful/criminal
in a limited partnership, tax is paid based on the
individual partner's tax rate.
for tax purposes, a partnership will file a(n)
information return * entity tax return for every partner corporate tax return entity tax return
which of the following is a limited partner entitled to perform?
inspect financial records of the business
if a limited partner commits an illegal or negligent act on behalf of the limited partnership, the limited partner
is personally liable to pay damages to the injured party
A(n) ______ venture is a limited in time business relationship typically governed by the same legal principles as a general partnership
joint
when it comes to partnership debt and liability, all partners in a general partnership are
jointly and severally liable for the debt
A(n) _________ partner is also referred to as an investing principal.
limited
principal funding and commercial lenders are viable funding options for general
partnership
In a limited partnership, the limited partner's liability is
limited to the extent of the limited partner's contribution in the business * that the limited partner is personally liable for debts of the partnership limited to 25% of the partnership debt shared equally among all limited and general partners
the extent to which principals are personally responsible for the debts of the business is which of the following factors?
management taxes formation liability *
when a principal wishes to leave a partnership, the RUPA defines this act of separation as which of the following:
manipulation dissociation * dissolution termination
when it comes to partnership debt and liability, all partners in a general partnership are
not responsible for paying the partnership debts are jointly liable, but not severally liable for the debt jointly and severally liable for the debt * are severally liable, but not jointly liable for the debt
If a limited partner commits an illegal or negligent act on behalf of the limited partnership, the limited partner
only liable to the third party to the extent of the limited partner's contribution is personally liable to pay damages to the injured party * is personally liable to pay damages to the injured party, but only up to $10k will equally share personal liability with the other general and limited partners
which of the following is considered the main disadvantage of the sole proprietorship business formation?
owner liability
limited and general are the two traditional subcategories of which of the following business entities?
parnterships
a general _______ is where two or more principals have demonstrated an intent to carry on as co-owners of a business for profit.
partnership
approximately 40 states have adopted all or substantial portions of the revised uniform _____ act.
partnership
in a limited partnership, the general partner is
personally liable for the debts of the partnership
the _______ is responsible for the unpaid debts of the sole proprietorship.
principal (owner)
a partnership is taxed like a sole ______, which means the partnership itself does not pay taxes, but rather taxes are accounted for on individual partner tax returns.
proprietorship
Which of the following is true of limited partners in a partnership?
remain primarily investors * engage in the supervision of employees are permitted to bind the partnership manage day to day operations of the business
which of the following have most states adopted to provide default provisions for partnerships where the principals have not expressly agreed otherwise?
revised uniform partnership act * uniform partnership reform act partnership agreement act uniform commercial code
when a limited partnership is interest is sold to the public, the transaction is subject to federal and state _____ laws.
security
when a limited partnership interest is sold to the public, the transaction is subject to federal and state _______ laws.
security/securities
which of the following is not a way in which a limited partnership can be funded?
selling ownership rights through the public markets
voluntary _____ occurs when a partner gives notice of intent to withdraw from the partnership
separation/dissociation
limited partners are sometimes referred to as ______ partners.
silent
limited partners are sometimes referred to as
silent partners
A(n) _______ proprietorship accounts for income taxes through the individual owner's personal return.
sole
when it comes to liability, general partners are personally exposed to liability similar to
sole proprietors
which choice of business entity is the top choice for a startup business with low annual revenues and expenses?
sole proprietorship
which of the following requires no annual filing?
sole proprietorship
a partnership where there is not predetermined time or event that dissolves the partnership is known as a partnership at:
will
which of the following is true of sole proprietorships?
they do not file an entity tax return * they are subject to double taxation they can have more than one owner they may not have more than one employee
true or false: a partnership may not sell ownership rights through the public markets
true
The RUPA provides for expulsion of a partner from a partnership by the what kind of vote of the other partners
unanimous
