1. In the absence of a provision in the partnership agreement on the sharing of profits, partners share profits: (Points : 2)
according to their status in the firm.
in proportion to their contribution of services.
in proportion to their capital contribution.
on an equal basis without regard to capital or service contributed.


2. Who serves as the agents of a corporation and runs the day-to-day operations of the corporation? (Points : 2)
officers
directors
shareholders
employees


3. A limited liability company is a legal entity apart from its owners. (Points : 2)
True
False


4. Franchise disclosures are not required under federal law. (Points : 2)
True
False


5. The dissolution of a partnership occurs when any partner ceases to be associated with the carrying on of partnership business. (Points : 2)
True
False


6. The simplest form of business is the partnership. (Points : 2)
True
False


7. A corporate charter can state generally that the corporation is organized to conduct "any legal business." (Points : 2)
True
False


8. In a corporation, a large number of investors may pooi their assets to finance a large business enterprise. (Points : 2)
True
False


9. A limited liability company offers the limited liability of a corporation. (Points : 2)
True
False


10. A limited partner may receive a share of the profits. (Points : 2)
True
False


11. Aliota and Blake are partners. Aliota contributed 75 percent of the firm's capital and Blake contributed 25 percent. Aliota has a controlling interest in the management of the firm. (Points : 2)
True
False


12. It is possible for a limited partner to be subject to the debts of the firm if the limited partner participates in the control of the business. (Points : 2)
True
False


13. When a limited partnership is dissolved, creditors are entitled to distributions of partnership assets before others are paid. (Points : 2)
True
False


14. S corporations avoid federal income taxes at the corporate level. (Points : 2)
True
False


15. An individual can become an owner of a corporation by purchasing one share of the corporation's stock. (Points : 2)
True
False


16. A shareholder has (Points : 2)
an absolute right to dividends.
a right to dividends when declared.
a right to insist that dividends be declared.
to share equally all dividends with fellow shareholders.


17. Alvin and Cleo form a partnership to operate the Four Seasons Hotel. When Alvin suspects Cleo of failing to account for all of the receipts, Alvin sues Cleo for an accounting and a dissolution. The court will likely order (Points : 2)
an accounting only.
a dissolution only.
an accounting and a dissolution.
none of the above.


18. Partnership agreements must always be in written form. (Points : 2)
True
False


19. An individual who has been authorized to vote the share of another stockholder is said to be voting by (Points : 2)
trust.
proxy.
estoppel.
agency.


20. Even limited partners are completely liable for debts of the business. (Points : 2)
True
False


21. A corporation is liable for the torts of its agents or officers committed within the course and scope of their employment. (Points : 2)
True
False


22. A sole proprietor is subject to unlimited personal liability for the debts of the business. (Points : 2)
True
False


23. The death of a limited partner will normally result in the dissolution of the limited partnership. (Points : 2)
True
False


24. A limited partnership is a special type of: (Points : 2)
corporation.
taxentityonly.
partnership.
Subchapter S entity.


25. A sole proprietorship is automatically dissolved on the death of the owner. (Points : 2)
True
False


26. A limited partnership is not a legal entity apart from its owners. (Points : 2)
True
False


27. A shareholder in a business corporation ordinarily is not personally liable for (Points : 2)
unpaid rent for the property leased to the corporation.
unpaid wages of employees of the corporation.
any part of the subscription price of the shareholder's stock that has not been paid.
dividends received by the shareholder that were improperly paid out of capital.


28. As in the case of agency, the burden of proving the existence of a partnership is on the person who claims that one exists. (Points : 2)
True
False


29. The liability of a partner for partnership debts is limited to the amount of capital he or she invests in the partnership. (Points : 2)
True
False


30. A partnership is organized for the profit of its members. (Points : 2)
True
False