©THEBRIGHTSTARS 2024
BUL 5810 - UNINCORPORATED
BUSINESS ASSOCIATIONS Exam
Questions With Correct Answers
A legal entity separate and distinct from its owners referred to as shareholders, and formed by
filing articles of incorporation is a: - answer✔✔corporation
A partner who has no right to participate in control of the business and who has limited liability
is called a: - 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: - answer✔✔general partnership
A __________ is an unincorporated business association consisting of at least one general
partner and at least one limited partner. - answer✔✔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✔✔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 - answer✔✔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.
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c. Limited liability company. - answer✔✔All of these!!!
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✔✔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✔✔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. - answer✔✔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: - answer✔✔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? -
answer✔✔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? -
answer✔✔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? -
answer✔✔Yes, since they are associating to carry on a for-profit business that they co-own
Andre invested $100,000 in a partnership with Erik and Louis for the purchase of an apartment
complex, with each owner sharing equally in the profits and losses. The property is owned by: -
answer✔✔The general partnership
BUL 5810 - UNINCORPORATED
BUSINESS ASSOCIATIONS Exam
Questions With Correct Answers
A legal entity separate and distinct from its owners referred to as shareholders, and formed by
filing articles of incorporation is a: - answer✔✔corporation
A partner who has no right to participate in control of the business and who has limited liability
is called a: - 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: - answer✔✔general partnership
A __________ is an unincorporated business association consisting of at least one general
partner and at least one limited partner. - answer✔✔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✔✔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 - answer✔✔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.
, ©THEBRIGHTSTARS 2024
c. Limited liability company. - answer✔✔All of these!!!
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✔✔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✔✔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. - answer✔✔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: - answer✔✔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? -
answer✔✔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? -
answer✔✔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? -
answer✔✔Yes, since they are associating to carry on a for-profit business that they co-own
Andre invested $100,000 in a partnership with Erik and Louis for the purchase of an apartment
complex, with each owner sharing equally in the profits and losses. The property is owned by: -
answer✔✔The general partnership
