MGMT 254 FINAL EXAM QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
types of business organizations - Answers - sole proprietorship
partnerships, LLPs, and LLCs
corporations
joint ventures
unincorporated associations
cooperatives
franchises
sole propreitorships - Answers - most common business form
advantages of sole proprietorship - Answers - no organizational costs
owner has complete control
income taxed ONLY at personal level
Disadvantages of Sole Proprietorship - Answers - unlimited personal liability for owner
business ends upon death of owner
partnerships - Answers - voluntary combination of two or more "general partners"
operating a business as co-owners for a profit
advantages of partnerships - Answers - No or low organizational costs
Combines talents and resources of multiple persons
Income taxed at partner's personal level only
disadvantages of partnerships - Answers - Unlimited personal liability of partners
(partners are jointly liable for contracts of the partnership and jointly and severally liable
for torts of the partnership)
Dissolution upon death or withdrawal of a partner
Partner must give notice or withdrawal to other partners and third parties to avoid
continuing liability for partnership debts
fact determination - Answers - Existence of partnership is a ______
_________________ and not dependent on the intent of the parties
written partnership agreement - Answers - not required, but a good idea
look first to this when determining rights and obligations of the partners
if this doesn't cover an issue, you look to the UPA or RUPA
, tenancy in partnership - Answers - partnership property is owned in ______ ____
_____________
rights of a partnership - Answers - participate in management
inspect books
share in profits
repayment of loans with interest
contribution and indemnity
distribution of capital upon dissolution
duties of partnership - Answers - loyalty, good faith, obedience
assignment of partner's interest - Answers - only results in assignee having right to
share in profits and capital upon dissolution, unless partners unanimously consent to
assignee as a new full partner
limited partnerships (LPs) - Answers - requires at least one general partner and at least
one limited partner, a certificate of limited partnership filed with appropriate authority
and must use LP or limited partnership in name
general partners - Answers - have the right to manage/control LP and are personally
liable for debts of LP
limited partners - Answers - only have the right to share in profits of LP and capital upon
dissolution; liability is limited to amount they have invested in the LP
unlimited personal liability - Answers - failure to form LP and file required certificate can
result in ___________ ___________ ___________ for limited partners along with
general partners
joint ventures - Answers - two or more persons or entities combine for a single
undertaking
treated as a partnership
liable for torts and contracts of fellow ventures
unincorporated associations - Answers - No existence apart form its members, cannot
sue or be sued, no liability of members for the torts or contracts made by other
members; but, member making the contract or committing the tort is personally liable.`
cooperatives - Answers - All revenue over expenses returned to the owners. Exempt for
antitrust laws under certain conditions.
franchises - Answers - Franchisor enters into a "franchise agreement" with franchisee to
allow franchisee to use franchisor's trademarks, trade names and trade secrets.
ACCURATE ANSWERS
types of business organizations - Answers - sole proprietorship
partnerships, LLPs, and LLCs
corporations
joint ventures
unincorporated associations
cooperatives
franchises
sole propreitorships - Answers - most common business form
advantages of sole proprietorship - Answers - no organizational costs
owner has complete control
income taxed ONLY at personal level
Disadvantages of Sole Proprietorship - Answers - unlimited personal liability for owner
business ends upon death of owner
partnerships - Answers - voluntary combination of two or more "general partners"
operating a business as co-owners for a profit
advantages of partnerships - Answers - No or low organizational costs
Combines talents and resources of multiple persons
Income taxed at partner's personal level only
disadvantages of partnerships - Answers - Unlimited personal liability of partners
(partners are jointly liable for contracts of the partnership and jointly and severally liable
for torts of the partnership)
Dissolution upon death or withdrawal of a partner
Partner must give notice or withdrawal to other partners and third parties to avoid
continuing liability for partnership debts
fact determination - Answers - Existence of partnership is a ______
_________________ and not dependent on the intent of the parties
written partnership agreement - Answers - not required, but a good idea
look first to this when determining rights and obligations of the partners
if this doesn't cover an issue, you look to the UPA or RUPA
, tenancy in partnership - Answers - partnership property is owned in ______ ____
_____________
rights of a partnership - Answers - participate in management
inspect books
share in profits
repayment of loans with interest
contribution and indemnity
distribution of capital upon dissolution
duties of partnership - Answers - loyalty, good faith, obedience
assignment of partner's interest - Answers - only results in assignee having right to
share in profits and capital upon dissolution, unless partners unanimously consent to
assignee as a new full partner
limited partnerships (LPs) - Answers - requires at least one general partner and at least
one limited partner, a certificate of limited partnership filed with appropriate authority
and must use LP or limited partnership in name
general partners - Answers - have the right to manage/control LP and are personally
liable for debts of LP
limited partners - Answers - only have the right to share in profits of LP and capital upon
dissolution; liability is limited to amount they have invested in the LP
unlimited personal liability - Answers - failure to form LP and file required certificate can
result in ___________ ___________ ___________ for limited partners along with
general partners
joint ventures - Answers - two or more persons or entities combine for a single
undertaking
treated as a partnership
liable for torts and contracts of fellow ventures
unincorporated associations - Answers - No existence apart form its members, cannot
sue or be sued, no liability of members for the torts or contracts made by other
members; but, member making the contract or committing the tort is personally liable.`
cooperatives - Answers - All revenue over expenses returned to the owners. Exempt for
antitrust laws under certain conditions.
franchises - Answers - Franchisor enters into a "franchise agreement" with franchisee to
allow franchisee to use franchisor's trademarks, trade names and trade secrets.
