1. Four years ago, Mr. JB purchased 1,000 shares of UPF Inc., for $10,000. These shares represent a 30 percent equity interest in UPF, which is an S corporation. This year, UPF defaulted on a $120,000 debt to a major creditor.

a) To what extent can the creditor demand repayment of the debt from Mr. JB?

b) Would your answer change if UPF is a partnership in which Mr. JB is a 30 percent general partner?

c) Would your answer change if UPF is a partnership in which Mr. JB is a 30 percent limited partner?

d) Would your answer change if UPF is an LLC in which Mr. JB is a 30 percent member?

2. Mrs. G, Mr. Y, and Mrs. N want to become co-owners of a business enterprise. Compare the extent of their personal liability for the debts incurred by the enterprise if they organize as:

a) A general partnership

b) A limited partnership

c) An LLC

d) An S corporation