Business Law Entities – Flashcards
Unlock all answers in this set
Unlock answersquestion
Jill was a limited partner in a retail business that was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability?
answer
Jill can only be liable to the amount of her investment.
question
Jill and Jane plan to start a business in which each will be an equal owner, but only Jill will be active in the business. They do not want to form a corporation. Their best choice for business organization is probably:
answer
a limited partnership.
question
All of the following are characteristics of a closely held corporation EXCEPT:
answer
the shares are publicly traded.
question
The business form that is taxed as a partnership and gives all owners limited liability, is:
answer
a limited liability company.
question
The importance of a Subchapter S corporation is:
answer
its treatment of shareholders for income taxation purposes.
question
Rachel and Cyndi started a retail business called Zebra Toy Company. The business is operated as a partnership. Under partnership law:
answer
Rachel is personally liable for any business contracts entered into by Cyndi. Rachel is personally liable for any business debts, regardless of whether she or Cyndi created the obligation. Rachel is personally liable for any negligent act committed by Cyndi in the scope of the business activity. All the above is the answer
question
All the business forms listed below have limited liability except the:
answer
general partnership.
question
No filings are required by a limited partnership.
answer
false
question
Limited liability is a major advantage of a partnership as compared to a corporation.
answer
false
question
A partnership is a separate, taxable entity.
answer
false
