BUL 5810 -FSU Exam 3 Questions with
Correct/Verified Answers 2026 Edition.
A legal entity separates and distinct from its owners referred to as shareholders, and formed by
filing articles of incorporation is a:
a. corporation.
b. limited liability company.
c. limited partnership.
d. general partnership. - Answer a. corporation.
A partner who has no right to participate in control of the business and who has limited liability
is called a:
a. limited partner.
b. nominal partner.
c. secret partner.
d. general partner. - Answer limited partner.
In choosing the form in which to conduct business, if ease of formation is the primary concern,
the owners would choose a:
a. corporation.
b. limited liability partnership.
c. limited partnership.
d. general partnership. - Answer general partnership.A __________ is an unincorporated
business association consisting of at least one general partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership
A __________ is an unincorporated business association consisting of at least one general
partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership - Answer d. limited partnership
,Which of the following is the most convincing evidence of a partnership arrangement?
a. Two or more persons are co-owners of property used in a business.
b. Two or more persons have a written agreement regarding a fundraiser for charity.
c. Two or more persons carry on a business for profit, but they have no formal agreement.
d. Two persons share a joint savings account in which they deposit money and share the
interest. - Answer c. Two or more persons carry on a business for profit, but they have no
formal agreement.
Which of the following would lack the capacity to become a partner?
a. A trust.
b. An adjudicated incompetent.
c. A corporation.
d. All of these are correct. - Answer b. An adjudicated incompetent.
Which of the following forms of business association may elect that only the partners/members
are taxed?
a. General partnerships.
b. Limited partnership.
c. Limited liability company.
d. All of these are correct. - Answer d. All of these are correct.
A partnership agreement should include all but which one of the following?
a. The duties of the partners.
b. The capital contribution of the partners.
c. The agreement for dividing tax liability of the partnership.
d. The division of profits and losses. - Answer c. The agreement for dividing tax liability of the
partnership.
A partner owes all of the following duties to the partnership except:
a. duty of loyalty.
b. duty of obedience.
c. duty of care.
d. duty of control. - Answer d. duty of control.
A partner's interest is subject to the claims of that partner's creditors who may obtain a judicial
lien known as a(n) __________ against the partner's transferable interest.
, a. assignability
b. distribution
c. changing order.
d. indemnification - Answer c. changing order.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of
the operation of the business. Jess, a business owner, is not personally liable if:
a. he is a sole proprietor of the business.
b. the business is a corporation and he is a shareholder.
c. he committed the tort.
d. he is a general partner of the business. - Answer b. the business is a corporation and he is
a shareholder.
Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment complex.
Instead of selling it, they decide to continue to operate it for the next few years as a sideline to
their other occupations just to see if they can earn some extra money. What are they?
a. A partnership.
b. Co-owners only.
c. A corporation.
d. Creditors of the apartment complex. - Answer a. A partnership.
Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They
each work two days a week. Donations fund the day-to-day operations. Do they have a
partnership?
a. Yes, since each has control of the operation.
b. Yes, because they are all co-equals in ownership of the shelter.
c. No, because they have made no formal agreement.
d. No, because there is no business for profit. - Answer d. No, because there is no business
for profit.
Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from
which they plan to sell the produce and share the profits or losses. Are they partners?
a. Yes, since they are associating to carry on a for-profit business that they co-own.
b. No, because they each control the use of the land.
c. Yes, because if there is a loss in the land's value, they will all share that loss.
d. No, they are merely joint venturers. - Answer a. Yes, since they are associating to carry on a
for-profit business that they co-own.
Correct/Verified Answers 2026 Edition.
A legal entity separates and distinct from its owners referred to as shareholders, and formed by
filing articles of incorporation is a:
a. corporation.
b. limited liability company.
c. limited partnership.
d. general partnership. - Answer a. corporation.
A partner who has no right to participate in control of the business and who has limited liability
is called a:
a. limited partner.
b. nominal partner.
c. secret partner.
d. general partner. - Answer limited partner.
In choosing the form in which to conduct business, if ease of formation is the primary concern,
the owners would choose a:
a. corporation.
b. limited liability partnership.
c. limited partnership.
d. general partnership. - Answer general partnership.A __________ is an unincorporated
business association consisting of at least one general partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership
A __________ is an unincorporated business association consisting of at least one general
partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership - Answer d. limited partnership
,Which of the following is the most convincing evidence of a partnership arrangement?
a. Two or more persons are co-owners of property used in a business.
b. Two or more persons have a written agreement regarding a fundraiser for charity.
c. Two or more persons carry on a business for profit, but they have no formal agreement.
d. Two persons share a joint savings account in which they deposit money and share the
interest. - Answer c. Two or more persons carry on a business for profit, but they have no
formal agreement.
Which of the following would lack the capacity to become a partner?
a. A trust.
b. An adjudicated incompetent.
c. A corporation.
d. All of these are correct. - Answer b. An adjudicated incompetent.
Which of the following forms of business association may elect that only the partners/members
are taxed?
a. General partnerships.
b. Limited partnership.
c. Limited liability company.
d. All of these are correct. - Answer d. All of these are correct.
A partnership agreement should include all but which one of the following?
a. The duties of the partners.
b. The capital contribution of the partners.
c. The agreement for dividing tax liability of the partnership.
d. The division of profits and losses. - Answer c. The agreement for dividing tax liability of the
partnership.
A partner owes all of the following duties to the partnership except:
a. duty of loyalty.
b. duty of obedience.
c. duty of care.
d. duty of control. - Answer d. duty of control.
A partner's interest is subject to the claims of that partner's creditors who may obtain a judicial
lien known as a(n) __________ against the partner's transferable interest.
, a. assignability
b. distribution
c. changing order.
d. indemnification - Answer c. changing order.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of
the operation of the business. Jess, a business owner, is not personally liable if:
a. he is a sole proprietor of the business.
b. the business is a corporation and he is a shareholder.
c. he committed the tort.
d. he is a general partner of the business. - Answer b. the business is a corporation and he is
a shareholder.
Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment complex.
Instead of selling it, they decide to continue to operate it for the next few years as a sideline to
their other occupations just to see if they can earn some extra money. What are they?
a. A partnership.
b. Co-owners only.
c. A corporation.
d. Creditors of the apartment complex. - Answer a. A partnership.
Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They
each work two days a week. Donations fund the day-to-day operations. Do they have a
partnership?
a. Yes, since each has control of the operation.
b. Yes, because they are all co-equals in ownership of the shelter.
c. No, because they have made no formal agreement.
d. No, because there is no business for profit. - Answer d. No, because there is no business
for profit.
Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from
which they plan to sell the produce and share the profits or losses. Are they partners?
a. Yes, since they are associating to carry on a for-profit business that they co-own.
b. No, because they each control the use of the land.
c. Yes, because if there is a loss in the land's value, they will all share that loss.
d. No, they are merely joint venturers. - Answer a. Yes, since they are associating to carry on a
for-profit business that they co-own.
