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BLAW Exam 7 Review Questions and Answers
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BLAW Exam 7 Review Questions and Answers
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BLAW Exam 7 Review QuestionsWhat are the characteristics of a sole proprietorship (2)? - Answer -1) The owner is the business
2) The simplest and most flexible business structure
What is the best opportunity for a sole proprietorship to obtain additional business capital? - Answer -
Bank loans or loan from the US Small Business Administration (SBA)
When a sole proprietor does, will the business automatically dissolve? - Answer -Yes, "when the owner
dies, so does the business- it is automatically dissolved"
In most states, is a partnership treated as an independent entity for the purposes of collecting
judgements and having accounting performed? - Answer -Yes, usually can be sued or sue, collect
judgments, and have all accounting performed in the name fo the partnership entity
When A sells a sole proprietorship to B, is this a transfer of the ownership of the business? - Answer
-"The sole proprietor can sell or transfer all or part of the business to another party at any time without
seeking approval".
Is intent to act in good faith an essential element of a partnership? - Answer -The intent to associate is a
key element of a partnership, and one can't join unless all partners consent.
, Is an employee of a partnership considered a partner? - Answer -They must receive a partnership
interest.
Must an agreement to form a partnership to sell real property be in writing? - Answer -Yes to be legally
enforceable
With respect to management decisions, must a majority of the partners agree? - Answer -A majority
vote controls decisions on ordinary maters connected with partnership business
Is a single partner in a partnership entitle to information on a complete basis? - Answer -Rights of
partners: management, interest in the partnership, compensation, inspection of books, accounting, and
property
If A dissociates from a partnership, does this end her right to participate in the partnership's business? -
Answer -It terminates the partner's actual authority to act for the partnership and participate in running
its business
What is entailed in a partner's duty of loyalty to the partnership? - Answer -Requires a partner to
account to the partnership for "any property, profit, or benefit" derived by the partner in the conduct of
the partner's business or from use of its property
What is the result of a partner's assignment of his interest in the partnership to another business
without the consent of the other partners? - Answer -They break the duty of loyalty by not telling the
partners.
Is a partnership terminated when the partners decide to dissolve it and one of the partners collects and
distributes the assets? - Answer -Yes and it's called winding up (actual process of collecting, liquidating,
and distributing assets.
What constitutes a dissociation of a partnership? - Answer -Dissociation- occurs when a partner ceases
to be associated in the partnership business
Dissolution- Termination of a partnership brought by partners, operation of flow, or by judicial decree
Does a partner's death dissolve that partner from the business? - Answer -Yes
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