The creation of general partnership and sole proprietorship

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Reference no: EM132267802

1. Which of the following is NOT true of the winding up process?

a. The partnership has to be wound up before it is dissolved.

b. Assets are liquidated during this process.

c. Creditors are the first paid during this process.

d. Proceeds are distributed during this process.

2. Orlando opened a hot dog stand in Brooklyn which unfortunately did not earn him a profit. He had borrowed $5,000 from the bank to set it up, which had to be repaid to the bank in two days. However, Orlando's friend Bob agreed to partner with him starting the subsequent month. From which of the following sources can the bank recover its $5,000 with interest?

a. Orlando's savings account

b. Orlando's family

c. Orlando's secondary financer

d. Bob, Orlando's prospective business partner

3. Which of the following is true of a sole proprietorship?

a. A business operated under sole proprietorship cannot be transferred.

b. Creditors can recover claims against the business from the sole proprietor's personal assets.

c. A business operated under sole proprietorship should be owned by one or more people of the same family.

d. Large businesses cannot be operated under sole proprietorship.

4. Regarding a limited partnership, which of the following is NOT true?

a. Limited partners may be an agent, employee, or contractor of the limited partnership.

b. Limited partners may be a consultant or an advisor to a general partner regarding the limited partnership.

c. Limited partners may approve or disapprove an amendment to the limited partnership agreement.

d. Limited partners may not act as a surety for the partnership.

5. Which of the following governs a limited partnership, its internal affairs, and the liability of its limited partners?

a. all states in which the business operates

b. the federal government

c. the articles of limited partnership

d. the law of the state in which it is organized

6. Which of the following is true in the creation of a general partnership?

a. The business cannot operate under a trade name.

b. The business name cannot be a fictitious name.

c. The business name has to have the names of all the partners.

d. The name selected by the partnership cannot indicate that it is a corporation.

Reference no: EM132267802

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