CCIFP Studying – CFMA's Construction Financial
Management: Questions With Logical Answers
Construction Joint Venture Correct Answer - A business entity owned
and operated by a small group of businesses (the joint venturers) as a
separate and specific business or project for the mutual benefit of the
members of the group.
How long do joint venture agreements typically last? Correct Answer -
Normally they are for a specific project and are dissolved when project is
completed.
Partnership Correct Answer - an association of two or more persons to
carry on as co-owners of a business for profit.
Types of partnerships Correct Answer - Limited partnerships, general
partnerships, and limited liability companies.
What is the difference between a general partnership and a limited
partnership? Correct Answer - In a general partnership, all partners are
liable for all obligations of partnership, where limited partners potential
losses are limited to the amount of capital they have invested.
4 main advantages of an LLC Correct Answer - 1) Flexible Profit
Distribution 2) No formal minutes required 3) Flow Through Taxation 4)
Limited Liability
3 main disadvantages of LLC Correct Answer - 1) Difficult to Go Public 2)
Added Complexity 3) State Tax Issues - added income/franchise taxes to assist
with LLC liability protections
What characteristics make a corporation unique? Correct Answer - 1)
corporation has infinite life 2) changes in ownership do not terminate
corporation 3) creation requires state approval 4) state limits on operations
5) shareholder liability is limited
What are the 8 most important items that should be included in a joint
venture agreement? Correct Answer - 1) Understanding/Purpose 2)
Management: Questions With Logical Answers
Construction Joint Venture Correct Answer - A business entity owned
and operated by a small group of businesses (the joint venturers) as a
separate and specific business or project for the mutual benefit of the
members of the group.
How long do joint venture agreements typically last? Correct Answer -
Normally they are for a specific project and are dissolved when project is
completed.
Partnership Correct Answer - an association of two or more persons to
carry on as co-owners of a business for profit.
Types of partnerships Correct Answer - Limited partnerships, general
partnerships, and limited liability companies.
What is the difference between a general partnership and a limited
partnership? Correct Answer - In a general partnership, all partners are
liable for all obligations of partnership, where limited partners potential
losses are limited to the amount of capital they have invested.
4 main advantages of an LLC Correct Answer - 1) Flexible Profit
Distribution 2) No formal minutes required 3) Flow Through Taxation 4)
Limited Liability
3 main disadvantages of LLC Correct Answer - 1) Difficult to Go Public 2)
Added Complexity 3) State Tax Issues - added income/franchise taxes to assist
with LLC liability protections
What characteristics make a corporation unique? Correct Answer - 1)
corporation has infinite life 2) changes in ownership do not terminate
corporation 3) creation requires state approval 4) state limits on operations
5) shareholder liability is limited
What are the 8 most important items that should be included in a joint
venture agreement? Correct Answer - 1) Understanding/Purpose 2)
