Chapter 27

Question 1

What are 3 basic legal forms of business

Answer 1

a. Proprietorship.
b. Partnership.
c. Corporation

Question 2

What is new form of business

Answer 2

limited liability company

Question 3

Can creditors may seize personal assets of the owners in proprietorships or regular partnerships, to satisfy any outstanding debts of the business

Answer 3

Yes

Question 4

Does in a partnership the general partners share the amount of personal liability equally, regardless of their capital contribution

Answer 4

Yes

Question 5

Does in a limited partnership, the limited partners are liable only for their capital contributions.

Answer 5

Yes

Question 6

Is it true, the more complex the organization, the more expensive it is to start

Answer 6

Yes

Question 7

Does the least expensive is the proprietorship, where the only costs may be for filing for a business name

Answer 7

Yes

Question 8

Does a limited partnership may be more complex to form because it must comply strictly with statu­tory requirements

Answer 8

Yes

Question 9

Does the corporation can be created only by statute

Answer 9

Yes

Question 10

Does in a sole proprietorship, the death of the owner results in the termination of the busi­ness.

Answer 10

Yes

Question 11

Does in a limited partnership, the death of a limited partner has no effect on the existence of the partnership.

Answer 11

Yes. Usually a partner buy shares of withdrawn partner or a member of withdrawn partner take over a partner

Question 12

Which only type of corporation stop functioning on the owner’s death or withdrawal

Answer 12

closely held corporation