LES 305 Exam 3 Study Questions well
answered to pass
Gwendolyn Melvin wishes to start a children's sports store called, "Just Let 'Em Play!" as a sole
proprietor. What form must she file so that she can use another name than her own?
- DBA certificate
- Disclosure statement
- UCC-1 statement
- Name certificate - correct answer ✔✔DBA certificate
Which of the following does not require a duty of care or good faith to other principals?
- A general partnership
- A family limited partnership
- A sole proprietorship
- A limited partnership - correct answer ✔✔A sole proprietorship
The doctrine that allows a creditor to seek recovery from the purchaser of assets even when the
purchaser did not expressly assume such liabilities as part of the purchase is called:
- Joint and several liability
- Unlimited liability
- Successor liability
- Contributory liability - correct answer ✔✔Successor liability
A sole proprietorship is liable:
,- Not liable for the debt of the business
- For all the debts of the business
- For what the courts determine as fair and just repayment of the debts of the business
- Only up to half the debts of the business - correct answer ✔✔For all the debts of the business
Jed wants to pass his sole proprietorship on to his son Luke in his will. Can he do this?
- No
- Yes
- No, unless the court can prove that Luke is in the best position to run the business
- Yes if the court finds no other heirs exist - correct answer ✔✔No
Which of the following requires a formal filing to be recognized as a valid business entity?
- A sole proprietorship
- All business entities
- A limited partnership
- A general partnership - correct answer ✔✔A limited partnership
Currently, LLPs are often used to protect family businesses as they provide a way to resolve:
- Issues regarding transition from one generation to another
- Management disputes
- Capitalization disputes
- Issues of family fiduciary duties and rights to represent and bind the business - correct answer
✔✔Issues regarding transition from one generation to another
In a general partnership:
, - An unequal split of profits may be agreed to based on the partnership agreement, but losses must be
split equally
- Profits and losses must be split equally among the partners
- Profits must be split equally, but losses may be split unequally based on the partnership agreement
- Profits and losses may be unequally split based on the partnership agreement - correct answer
✔✔Profits and losses may be unequally split based on the partnership agreement
A responsibility to act in the best interests of a partnership by the partners is called a
- Legal duty
- Fiduciary duty
- Ethical duty
- Moral duty - correct answer ✔✔Fiduciary duty
The origins of LLP's were rooted in protection of:
- Professional service firm partnerships
- Professional service firm sole proprietorships
- Private service firm partnerships
- Private service firm sole proprietorships - correct answer ✔✔Professional service firm partnerships
LLCs were originally created by the:
- California legislature
- New York legislature
- Deleware legislature
- Wyoming legislature - correct answer ✔✔Wyoming legislature
After the ULLCA was created, some states have started to adopt an act that modifies it called:
answered to pass
Gwendolyn Melvin wishes to start a children's sports store called, "Just Let 'Em Play!" as a sole
proprietor. What form must she file so that she can use another name than her own?
- DBA certificate
- Disclosure statement
- UCC-1 statement
- Name certificate - correct answer ✔✔DBA certificate
Which of the following does not require a duty of care or good faith to other principals?
- A general partnership
- A family limited partnership
- A sole proprietorship
- A limited partnership - correct answer ✔✔A sole proprietorship
The doctrine that allows a creditor to seek recovery from the purchaser of assets even when the
purchaser did not expressly assume such liabilities as part of the purchase is called:
- Joint and several liability
- Unlimited liability
- Successor liability
- Contributory liability - correct answer ✔✔Successor liability
A sole proprietorship is liable:
,- Not liable for the debt of the business
- For all the debts of the business
- For what the courts determine as fair and just repayment of the debts of the business
- Only up to half the debts of the business - correct answer ✔✔For all the debts of the business
Jed wants to pass his sole proprietorship on to his son Luke in his will. Can he do this?
- No
- Yes
- No, unless the court can prove that Luke is in the best position to run the business
- Yes if the court finds no other heirs exist - correct answer ✔✔No
Which of the following requires a formal filing to be recognized as a valid business entity?
- A sole proprietorship
- All business entities
- A limited partnership
- A general partnership - correct answer ✔✔A limited partnership
Currently, LLPs are often used to protect family businesses as they provide a way to resolve:
- Issues regarding transition from one generation to another
- Management disputes
- Capitalization disputes
- Issues of family fiduciary duties and rights to represent and bind the business - correct answer
✔✔Issues regarding transition from one generation to another
In a general partnership:
, - An unequal split of profits may be agreed to based on the partnership agreement, but losses must be
split equally
- Profits and losses must be split equally among the partners
- Profits must be split equally, but losses may be split unequally based on the partnership agreement
- Profits and losses may be unequally split based on the partnership agreement - correct answer
✔✔Profits and losses may be unequally split based on the partnership agreement
A responsibility to act in the best interests of a partnership by the partners is called a
- Legal duty
- Fiduciary duty
- Ethical duty
- Moral duty - correct answer ✔✔Fiduciary duty
The origins of LLP's were rooted in protection of:
- Professional service firm partnerships
- Professional service firm sole proprietorships
- Private service firm partnerships
- Private service firm sole proprietorships - correct answer ✔✔Professional service firm partnerships
LLCs were originally created by the:
- California legislature
- New York legislature
- Deleware legislature
- Wyoming legislature - correct answer ✔✔Wyoming legislature
After the ULLCA was created, some states have started to adopt an act that modifies it called:
