Business Law Exam 3 comprehensive
Questions and Answers with Verified
Solutions
Question 1:
- separate accounting entity but not separate legal entity - income on
personal tax forms - total liability on one person for unpaid debts
Answer:
Sole proprietorship
Question 2:
Legal requirements of most businesses....
Answer:
- business name registration - occupational licenses - state tax
registration - zoning
Question 3:
Applicable law to partnerships:
Answer:
- Uniform Partnership Act (subservient to partnership agreement) -
contracts - agency
Question 4:
What are some characteristics of a partnership?
Answer:
- easy in & out - little govt interference; no income tax! - like dating
,Question 5:
Formation of partnership
Answer:
- formal agreement not required - Articles of Partnership recommended
(writing) - contract trumps UPA - partnership for a term/at will -
partnership by estoppel
Question 6:
when a 3rd person has reasonably and detrimentally relied on the
representation that a non partner was
Answer:
partnership by estoppel
Question 7:
Tax obligation of a partnership?
Answer:
Partnerships don't pay income tax, but must file an information return
(mandatory tax document that businesses must use to notify the IRS
about such transactions)
Question 8:
Partners pay tax on their share of the profit whether
Answer:
distributed or not
, Question 9:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There was no written contract. How are the profits
divided?
Answer:
Evenly, regardless to contribution and work done
Question 10:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. How are the losses
divided? What if there is an agreement to "share profits" 50/30/20?
Answer:
even, even
Question 11:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. What if there are losses
at the end? Are all the partners responsible?
Answer:
YES; if one partner was wealthy and the other two were broke, wealthy
person would have to pay it all, bc they have to come up with the money
anyways
Question 12:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. Without permission,
Allen contracts to have the building painted. Is the partnership liable?
Answer:
Yes
Questions and Answers with Verified
Solutions
Question 1:
- separate accounting entity but not separate legal entity - income on
personal tax forms - total liability on one person for unpaid debts
Answer:
Sole proprietorship
Question 2:
Legal requirements of most businesses....
Answer:
- business name registration - occupational licenses - state tax
registration - zoning
Question 3:
Applicable law to partnerships:
Answer:
- Uniform Partnership Act (subservient to partnership agreement) -
contracts - agency
Question 4:
What are some characteristics of a partnership?
Answer:
- easy in & out - little govt interference; no income tax! - like dating
,Question 5:
Formation of partnership
Answer:
- formal agreement not required - Articles of Partnership recommended
(writing) - contract trumps UPA - partnership for a term/at will -
partnership by estoppel
Question 6:
when a 3rd person has reasonably and detrimentally relied on the
representation that a non partner was
Answer:
partnership by estoppel
Question 7:
Tax obligation of a partnership?
Answer:
Partnerships don't pay income tax, but must file an information return
(mandatory tax document that businesses must use to notify the IRS
about such transactions)
Question 8:
Partners pay tax on their share of the profit whether
Answer:
distributed or not
, Question 9:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There was no written contract. How are the profits
divided?
Answer:
Evenly, regardless to contribution and work done
Question 10:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. How are the losses
divided? What if there is an agreement to "share profits" 50/30/20?
Answer:
even, even
Question 11:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. What if there are losses
at the end? Are all the partners responsible?
Answer:
YES; if one partner was wealthy and the other two were broke, wealthy
person would have to pay it all, bc they have to come up with the money
anyways
Question 12:
Allen, Baker, and Carter formed a partnership. Allen and Baker each
contributed $10,000. There is no written contract. Without permission,
Allen contracts to have the building painted. Is the partnership liable?
Answer:
Yes
