26. Which of the following is an example of the implied rules contained in the Partnership Act ?

a. Each partner may sue the other for breach of fiduciary duty.

b. Each partner is a fiduciary to the other partners.

c. Each partner is entitled to have their name in the partnership business.

d. Each partner may take part in the management of the business.

27. Which of the following is a distinguishing feature of a limited partnership?

a. The liability of each partner is limited to their capital contributions.

b. The liability of some partners is limited to their capital contributions.

c. Limited partners may participate in the day-to-day management of the firm.

d. Limited partnerships are only available to professionals.

28. What type of liability would flow to the other partners in circumstances involving a wrongful act

or omission by one partner acting within the course of employment?

a. joint liability

b. unlimited liability

c. joint and several liability

d. several liability

29. The Partnership Act provides for the following rule: "all partners are to share equally in the

capital and profits of the business and must contribute equally to the losses." Which statement

best exemplifies this rule?

a. The losses are restricted to the capital investments made by each partner.

b. This rule is optional and may be varied by written agreement.

c. This rule is mandatory and cannot be modified by agreement.

d. The rule applies only to limited liability partnerships.

31. Nancie is a shareholder in BlueSky Investments Inc. With respect to BlueSky's obligations,

which of the following most likely reflects Nancie's liability?

a. Nancie's liability is dependent on how the obligations were incurred.

b. Nancie is liable for these obligations unless she has given her personal guarantee.

c. Nancie's limited liability shield may be negated by her giving a personal guarantee.

d. As a shareholder, all of Nancie's personal assets will be at risk.

35. Which of the following was one of the issues that was resolved by the decision in Salomon v.

Salomon Ltd., [1897] A.C. 22 (H.L.)?

a. whether incorporation can be undertaken to limit risk of business bankruptcy

b. whether shareholders are prohibited from becoming highly protected creditors of the company

c. whether companies with few shareholders could be recognized as separate legal entities

d. whether shareholders are totally responsible for their own as well as the entity's obligations

37. Jasmine is the sole shareholder of FashionPlusYou Inc., which is planning to borrow $100 000

from the bank to finance a second store location. What is Jasmine's legal position should

FashionPlusYou Inc. default on the loan?

a. She and the corporation are jointly liable for the debt.

b. She has no personal liability with respect to the debt.

c. She and the corporation are jointly and severally liable for the debt.

d. She can be personally sued by the bank but only if FashionPlusYou Inc. defaults on the loan.

38. Which of the following is a distinguishing feature of a widely held or public corporation?

a. They are exempt from most of the obligations of security legislation.

b. Letters patent are filed in each jurisdiction.

c. Shares are normally traded on the stock exchange.

d. Articles of association are filed in each jurisdiction.