BUL 5810 - UNINCORPORATED BUSINESS ASSOCIATIONS EXAM QUESTIONS WITH CORRECT ANSWERS
GRADED A+
A legal entity separate and distinct from its owners referred to as shareholders, and formed by filing
articles of incorporation is a: - Answers corporation
A partner who has no right to participate in control of the business and who has limited liability is called
a: - Answers limited partner
In choosing the form in which to conduct business, if ease of formation is the primary concern, the
owners would choose a: - Answers general partnership
A __________ is an unincorporated business association consisting of at least one general partner and at
least one limited partner. - Answers 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. -
Answers 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 - Answers 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. - Answers 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. - Answers 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. - Answers 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. - Answers 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: - Answers 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? - Answers 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? - Answers 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? - Answers 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: - Answers The
general partnership
Luke typically spends 50-55 hours per week working in the real estate partnership he co-owns with
Spencer. Spencer only spends about 30 hours a week on partnership business. Under the RUPA: -
Answers unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the
partnership, even if it is disproportionate to his partner's work
Mike and Tom are partners who started a car dealership. Mike, however, secretly started a car
dealership on the other side of town without consulting the partnership. What duty did Mike violate? -
Answers Fiduciary Duty
GRADED A+
A legal entity separate and distinct from its owners referred to as shareholders, and formed by filing
articles of incorporation is a: - Answers corporation
A partner who has no right to participate in control of the business and who has limited liability is called
a: - Answers limited partner
In choosing the form in which to conduct business, if ease of formation is the primary concern, the
owners would choose a: - Answers general partnership
A __________ is an unincorporated business association consisting of at least one general partner and at
least one limited partner. - Answers 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. -
Answers 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 - Answers 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. - Answers 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. - Answers 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. - Answers 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. - Answers 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: - Answers 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? - Answers 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? - Answers 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? - Answers 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: - Answers The
general partnership
Luke typically spends 50-55 hours per week working in the real estate partnership he co-owns with
Spencer. Spencer only spends about 30 hours a week on partnership business. Under the RUPA: -
Answers unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the
partnership, even if it is disproportionate to his partner's work
Mike and Tom are partners who started a car dealership. Mike, however, secretly started a car
dealership on the other side of town without consulting the partnership. What duty did Mike violate? -
Answers Fiduciary Duty
