LSB 3213 exam #3 questions and answers graded
A+ updated
1. Which of the following statements is incorrect?
B A corporation can be sued without the principals
being sued.
B. A corporation may not incur obligations
separate from those of its principals.
C. A corporation may form a contract in its own
name without the principals guaranteeing the
contract.
D. A corporation may file suit in its own name
without the principals filing suit
2. Raul wants a simple method to start-up a small
mar-
D keting company. The marketing firm hasrelatively
low revenue and expenses. Which type of business
entity would you suggest?
A. Corporation
B. Franchise
C. Partnership
D. Sole proprietorship
3. Which statement below is correct about a sole propri- C
etorship?
A. It is created by filing bylaws.
B. It can have multiple owners.
C. It has low start-up costs and minimal filing.
D. It faces double taxation
4. Which of the following is true regarding the taxation of C
a limited liability partnership (LLP)?
A. An LLP is not subject to taxation.
B. A limited liability partnership (LLP) is not
treated as a pass-through entity.
C. All income or losses of the LLP are reported on the
,LSB 3213 exam #3 questions and answers graded
A+ updated
partners' individual tax returns.
D. An LLP is not required to file an information
return with federal and state tax authorities
5. A limited partnership requires A
A. at least one general and one limited partner.
B. at least two limited partners.
C. at least two general partners.
D. a written limited partnership agreement
6. When a partner no longer wishes to be a principal
D in the partnership, she may choose to leavethe
part- nership. What term does the Revised Uniform
Limited Partnership Act (RULPA) use to describe
this act of separation?
A. Dissociation
B. Rescission
C. Revocation
D. Withdrawal
7. How are limited liability partnerships (LLPs) capital- C
ized?
A. Through private lenders, but not through
commer- cial lenders
B. Through commercial lenders, but not through
pri- vate lenders
C. Through private lenders, through commercial
lenders, or by a sale of partnership equityf or
owner- ship in the limited liability partnership
(LLP) itself
D. Only by a sale of partnership equity for
ownership in the limited liability partnership(LLP)
itself
8. D
, LSB 3213 exam #3 questions and answers graded
A+ updated
An LLC offers principals the same liability coverage
as that of
A. principals in corporations with taxation at the
busi- ness entity level.
B. general partners in a partnership with
taxation at the business entity level.
C. limited partners in a partnership with pass-
through taxation.
D. principals in corporations with pass-through
taxa- tion
9. Several people have decided to go into business as
an B LLC. To cover all contingencies, they want to
specify what constitutes an act of dissociation and
outline the procedures upon dissolution. This
information would be included in
A. common law—the members may not
negotiate these rights.
B. the operating agreement.
C. the Uniform Limited Liability Company Act.
D. the certificate of organization.
10. After the ULLCA was created, some states have started C
to adopt an act that modifies it called
A. Reform Limited Company Act
B. Reformed Limited Liability Corporation Act
C. Revised Uniform Limited Liability Company Act
D. Revised Limited Company Formation Act
11. Which of the following is not a characteristic of an LLC? D
A. Usually capitalized via debt.
B. May elect to be taxed as a corporation.
A+ updated
1. Which of the following statements is incorrect?
B A corporation can be sued without the principals
being sued.
B. A corporation may not incur obligations
separate from those of its principals.
C. A corporation may form a contract in its own
name without the principals guaranteeing the
contract.
D. A corporation may file suit in its own name
without the principals filing suit
2. Raul wants a simple method to start-up a small
mar-
D keting company. The marketing firm hasrelatively
low revenue and expenses. Which type of business
entity would you suggest?
A. Corporation
B. Franchise
C. Partnership
D. Sole proprietorship
3. Which statement below is correct about a sole propri- C
etorship?
A. It is created by filing bylaws.
B. It can have multiple owners.
C. It has low start-up costs and minimal filing.
D. It faces double taxation
4. Which of the following is true regarding the taxation of C
a limited liability partnership (LLP)?
A. An LLP is not subject to taxation.
B. A limited liability partnership (LLP) is not
treated as a pass-through entity.
C. All income or losses of the LLP are reported on the
,LSB 3213 exam #3 questions and answers graded
A+ updated
partners' individual tax returns.
D. An LLP is not required to file an information
return with federal and state tax authorities
5. A limited partnership requires A
A. at least one general and one limited partner.
B. at least two limited partners.
C. at least two general partners.
D. a written limited partnership agreement
6. When a partner no longer wishes to be a principal
D in the partnership, she may choose to leavethe
part- nership. What term does the Revised Uniform
Limited Partnership Act (RULPA) use to describe
this act of separation?
A. Dissociation
B. Rescission
C. Revocation
D. Withdrawal
7. How are limited liability partnerships (LLPs) capital- C
ized?
A. Through private lenders, but not through
commer- cial lenders
B. Through commercial lenders, but not through
pri- vate lenders
C. Through private lenders, through commercial
lenders, or by a sale of partnership equityf or
owner- ship in the limited liability partnership
(LLP) itself
D. Only by a sale of partnership equity for
ownership in the limited liability partnership(LLP)
itself
8. D
, LSB 3213 exam #3 questions and answers graded
A+ updated
An LLC offers principals the same liability coverage
as that of
A. principals in corporations with taxation at the
busi- ness entity level.
B. general partners in a partnership with
taxation at the business entity level.
C. limited partners in a partnership with pass-
through taxation.
D. principals in corporations with pass-through
taxa- tion
9. Several people have decided to go into business as
an B LLC. To cover all contingencies, they want to
specify what constitutes an act of dissociation and
outline the procedures upon dissolution. This
information would be included in
A. common law—the members may not
negotiate these rights.
B. the operating agreement.
C. the Uniform Limited Liability Company Act.
D. the certificate of organization.
10. After the ULLCA was created, some states have started C
to adopt an act that modifies it called
A. Reform Limited Company Act
B. Reformed Limited Liability Corporation Act
C. Revised Uniform Limited Liability Company Act
D. Revised Limited Company Formation Act
11. Which of the following is not a characteristic of an LLC? D
A. Usually capitalized via debt.
B. May elect to be taxed as a corporation.
