BUL 3130 Final Exam || Already Graded A+.
Mylie has a clothing store as a sole proprietorship. Her shop has a net income at the end of the
year of $200,000. She took a salary from this of $60,000. The remaining money is left in her
bank account. correct answers At tax time, Mylie pays taxes on $200,000.
Jason and Alexandra enter into a partnership to sell food products Jason has developed. The
products sell rapidly however, some persons have a severe allergic to the products which can
result in hospitalization. One of the customers who purchased the product was hospitalized for 4
days and sues the partnership for medical expenses of $100,000. Which of the following is true
correct answers Both Jason and Alexandra are jointly and severally liable for any contractual or
tort damages that result from the sale of their products under partnership law.
Edna wants to go into business as a bookkeeper. She has almost no money, but her great
accounting education at FGCU made her a valuable asset to the community. The lowest cost
method of going into business for Edna will correct answers A sole proprietorship
Daniella, Annabella, Cory, Roger and Cletus have decided to go into the real estate business to
acquire land, build an apartment building rent it out and then sell it. Daniella and Cletus are the
general partners who each own 10% of the limited partnership interests. Annabella a limited
partner own 30% of the limited partnership, Cory owns 35% of the limited partnership and Roger
owns 15% of the limited partnership.
The dissolution provisions of the limited partnership agreement require that dissolution requires
the Unanimous vote of the general partners and a majority in interest (51%) of the Limited
Partners. Who must vote for dissolution in order for the limited partnership to dissolve? correct
answers Daniella, Cletus, Cory, and Annabella
Grady formed a sole proprietorship, Grady's Auto Paint Specialties (GAPS). Grady takes
Professor Carmichael's advice and forms a Single Member LLC for liability protection purposes.
He names the Company GAPS, LLC and files for a fictitious name, Grady's Auto Paint
Specialties. GAPS LLC enters into a contract with Redding to touch up the original paint on his
rare collectible Ferrari. Grady negligently ruined the original paint job, reducing the value of the
car by $100,000. Redding is suing Grady for the full amount. GAPS has only $60,000 in total
assets. Assuming he wins his case and gets a judgment for the full $100,000, what amount can
Redding collect? correct answers $60,000 because Grady was operating within the scope of the
business purposes of his LLC.
Fiduciary duties are the duties that correct answers general partners owe to ensure they are acting
in the best interest of the partnership.
Constantine and William are in business selling cell phones. Both have contributed $10,000 to
the business. Constantine runs the day-to-day operations of the business partnership and makes
the decisions on its direction. Constantine and William signed a partnership agreement stating
that William would be liable for debts of the partnership only up to his $10,000 contribution.
Which is true of this arrangement? correct answers Constantine is a general partner, and William
is a limited partner.
, Tamara, Alexander and Fatima start an LLC and desire to obtain partnership tax treatment for
their venture. Which of the following is true correct answers Partnerships do not pay taxes,
Partners do. So each member will pay tax on their ratable share of tax attributes.
Porter and Dolly are in a business to sell Porter's locally famous chili. Dolly agrees to handle the
sales and marketing and Porter agrees to oversee making the chili. They do not enter into a
formal agreement, written or otherwise. Which of the following business types is this? correct
answers General partnership type known as an implied partnership.
Capitalization refers to how the business will fund its operations. correct answers True
Geoff and Matilda formed an LLC. Their LLC will be most likely be treated as a __________ for
tax purposes. correct answers pass-through entity
Asianna, Barry, Corrina and Dontelle are members of ABCD, LLC. After three years ABCD
closed. The bank that extended them a loan sued for repayment of $100,000. No Member signed
a personal guaranty. The bank may correct answers sue neither the LLC nor Asianna, Barry,
Corrina or Dontelle because an LLC and its members are sheltered from lawsuits due to limited
liability rules.
Sean, Gertie and Manfred formed a limited liability corporation (LLC) and each became a 1/3rd
Member. The Members appointed Manfred as Manager. The Manager has the sole authority to
operate the business. This type of LLC is known as correct answers Manager-managed LLC
Paul, John, George and Richard decided to form a limited liability corporation (LLC) for their
music business. They want to clearly define the way members share in profits and losses, receive
distributions, leave the company and dissolve he company. This information would be included
in correct answers the operating agreement
Kameron, Candice and Leo were members of an LLC, Printing Unlimited, LLC (PU). They
leased a digital printing press for their company. Press Sales, Incorporated (PSI), the company
that manufactured and leased the printing press to them, required personal guarantees from each
of them as a requisite leasing the press. What will be required of Kameron, Candice and Leo?
correct answers They must guarantee to make good faith efforts to repay the debt when due.
In Florida, a Limited Liability Partnership is formed by correct answers filing a Statement of
Partnership Authority and a Partnership Registration Statement
Partners seek the protection of the Limited liability partnership (LLP) form of business to deal
with the correct answers To compartmentalize partnership liabilities generated by acts of other
general partners and/or the debts of the partnership itself and protect each partner's individual
assets.
The partners of a limited liability partnership owe __________ duties to the other members of an
LLP. correct answers absolute
