NC DENTAL JURISPRUDENCE EXAM 2025 QUESTIONS
WITH ANSWERS RATED A+
✔✔T/F: a partner is liable only for their debt of the partnership - ✔✔false. a partner is
liable for the entire debt
✔✔What happens when the partner's personal debt is higher than the assets available?
- ✔✔court will force payment from personal assets, then the shares from the partnership
is included but the partner's share is protected
✔✔T/F: the more partners you have the more credit the partnership can command -
✔✔true
✔✔T/F: if a partner becomes disabled, dies or retires, the remaining partners can
continue business without loss of goodwill and without sale and transfer headaches -
✔✔true
✔✔Filing for taxes in a partnership - ✔✔personal tax returns are required, but the
partnership will also require its own tax return
✔✔Partnership by Estoppel - ✔✔shared space between two businesses, but can be
liable for debt if the public understands that it maybe a partnership
✔✔continuing existence - ✔✔since a corporation is a separate being, the death or
resignation of owner/shareholder does not bother the corporate structure
✔✔limited liability - ✔✔if debt is owed, each owner/shareholder is only liable to the
value of the stock but does not protect the dentist from professional liability
✔✔corporation flexibility - ✔✔can have one shareholder or several
✔✔transferability in corporations - ✔✔stock can be sold to another dentist. corporations
remains in existence despite a new majority share holder
✔✔T/F: a close corporation will be similar to a partnership in regards to transfers -
✔✔true
remaining shareholders will have to approve of the sale to someone outside of the corp
and has the right of first refusal
✔✔access to capital in corporations - ✔✔obtain loans to expand the business, purchase
equipment
-require dentist to sign promissory note, if the corporation fails to pay, the bank can give
the debt to the dentist
, ✔✔amount of loan in corporation vs partnership - ✔✔they are the same, it is related to
the borrowing power of the shareholders `
✔✔Corporation management - ✔✔is left by the shareholders or board of directors
✔✔Corporation double taxation - ✔✔corporation pays tax on profits becuase it is
normally lower than individual rates (money is used to purchase equipment)
-corporation will get a deduction against the income and no tax is owed
-if profits are distributed to shareholders, taxpayer will also pay tax on income
-can be avoided if the dentist has a salary, and is a deductible to the employer
✔✔fringe benefits - ✔✔deductible expenses such as health and accident insurance
premiums, group life insurance, death benefits and disability insurfance
✔✔S-corporation - ✔✔Election made by a corporation to be taxed as a partnership
all profits and losses flow through to the shareholder
-advantage when large dividends or large losses are expected
✔✔C-corporation - ✔✔standard american corporation
-taxpayer and dividends of profit are paid to the stockholders
-results in double taxation (once at the corp level and then individual level)
-avoid double tax by distributing all profits as salary to the dentist
-salary paid to the dentist is a deduction for the employer and tax is paid only on the
dentist's personal return
✔✔S-corporation - ✔✔chooses to be taxed liked a partnership
-all income and losses flow through to the shareholders and are taxed or deducted on
the shareholder's personal return
-advantage: S corporation is the entire loss can be divided among the stockholders and
used by them to offset other personal incomes
-losses in C-corp requires the business to make money
-employee benefit deductions are not available to S corps
✔✔Limited liability company - ✔✔hybrid type of associations that has the best attributes
of a corporation and partnership and avoids disadvantages of S corp
✔✔T/F: in a LLC, only one person is needed to be taxed as a partnership - ✔✔true
✔✔T/F: Life of LLC is limited - ✔✔true (30-50 years)
✔✔contract - ✔✔total legal obligation created when you make a bargain
✔✔Why are oral contracts discouraged and in some cases unenforceable? - ✔✔it is
difficult to prove
WITH ANSWERS RATED A+
✔✔T/F: a partner is liable only for their debt of the partnership - ✔✔false. a partner is
liable for the entire debt
✔✔What happens when the partner's personal debt is higher than the assets available?
- ✔✔court will force payment from personal assets, then the shares from the partnership
is included but the partner's share is protected
✔✔T/F: the more partners you have the more credit the partnership can command -
✔✔true
✔✔T/F: if a partner becomes disabled, dies or retires, the remaining partners can
continue business without loss of goodwill and without sale and transfer headaches -
✔✔true
✔✔Filing for taxes in a partnership - ✔✔personal tax returns are required, but the
partnership will also require its own tax return
✔✔Partnership by Estoppel - ✔✔shared space between two businesses, but can be
liable for debt if the public understands that it maybe a partnership
✔✔continuing existence - ✔✔since a corporation is a separate being, the death or
resignation of owner/shareholder does not bother the corporate structure
✔✔limited liability - ✔✔if debt is owed, each owner/shareholder is only liable to the
value of the stock but does not protect the dentist from professional liability
✔✔corporation flexibility - ✔✔can have one shareholder or several
✔✔transferability in corporations - ✔✔stock can be sold to another dentist. corporations
remains in existence despite a new majority share holder
✔✔T/F: a close corporation will be similar to a partnership in regards to transfers -
✔✔true
remaining shareholders will have to approve of the sale to someone outside of the corp
and has the right of first refusal
✔✔access to capital in corporations - ✔✔obtain loans to expand the business, purchase
equipment
-require dentist to sign promissory note, if the corporation fails to pay, the bank can give
the debt to the dentist
, ✔✔amount of loan in corporation vs partnership - ✔✔they are the same, it is related to
the borrowing power of the shareholders `
✔✔Corporation management - ✔✔is left by the shareholders or board of directors
✔✔Corporation double taxation - ✔✔corporation pays tax on profits becuase it is
normally lower than individual rates (money is used to purchase equipment)
-corporation will get a deduction against the income and no tax is owed
-if profits are distributed to shareholders, taxpayer will also pay tax on income
-can be avoided if the dentist has a salary, and is a deductible to the employer
✔✔fringe benefits - ✔✔deductible expenses such as health and accident insurance
premiums, group life insurance, death benefits and disability insurfance
✔✔S-corporation - ✔✔Election made by a corporation to be taxed as a partnership
all profits and losses flow through to the shareholder
-advantage when large dividends or large losses are expected
✔✔C-corporation - ✔✔standard american corporation
-taxpayer and dividends of profit are paid to the stockholders
-results in double taxation (once at the corp level and then individual level)
-avoid double tax by distributing all profits as salary to the dentist
-salary paid to the dentist is a deduction for the employer and tax is paid only on the
dentist's personal return
✔✔S-corporation - ✔✔chooses to be taxed liked a partnership
-all income and losses flow through to the shareholders and are taxed or deducted on
the shareholder's personal return
-advantage: S corporation is the entire loss can be divided among the stockholders and
used by them to offset other personal incomes
-losses in C-corp requires the business to make money
-employee benefit deductions are not available to S corps
✔✔Limited liability company - ✔✔hybrid type of associations that has the best attributes
of a corporation and partnership and avoids disadvantages of S corp
✔✔T/F: in a LLC, only one person is needed to be taxed as a partnership - ✔✔true
✔✔T/F: Life of LLC is limited - ✔✔true (30-50 years)
✔✔contract - ✔✔total legal obligation created when you make a bargain
✔✔Why are oral contracts discouraged and in some cases unenforceable? - ✔✔it is
difficult to prove
