31.) The Revised Uniform Partnership Act (RUPA) is a federal act that defines the rights and duties of partnerships. True or False

32.) Sandra wants to start a tutoring business where students can come into her office and she'll give workouts and one on one lessons. Sandra wants to choose an entity that will protect her in case one of her clients injures themselves on the property. The business organization that is simplest and best addresses Sandra's concern is a sole proprietorship. True or False

33.) Fred, George, and Herb are general partners in a business. George was traveling to a conference as a representative of the firm and was involved in a traffic accident for which he was at fault. Under RUPA, who is liable for the damages?

A. George alone.

B. George alone, but he is then entitled to indemnification from Fred and Herb.

C. George alone, but he is then entitled to indemnification from the partnership.

D. Fred, George, and Herb, jointly.

E. George and the partnership, then Fred and Herb will be liable if the assets of the partnership are depleted.

F. The partnership alone, since George was engaged in business for the partnership.

34.) Daniel, Elizabeth, and Fred are partners. Daniel has the express authority to purchase inventory for the business. Fred sees an excellent sale on inventory items, and purchases the items for the partnership. Elizabeth and Daniel are mad that Fred made this purchase because he depleted the funds in the partnership's bank account. Under these circumstances

A. the partnership is not liable for the items Fred purchased due to Fred's lack of authority.

B. the partnership is not liable for the items Fred purchased unless Daniel approves of the purchase.

C. the partnership is liable for the items Fred purchased because of the business judgment rule.

D. the partnership is liable for the items Fred purchased.

35.) The business judgment rule essentially provides

A. corporation directors and officers are liable if the corporation goes bankrupt.

B. courts will generally defer to the director's and officer's business judgment unless there is a lack of good faith, fraud, or an abuse of discretion.

C. corporate directors of officers could be liable only if they engage in risky businesses.

D. corporate directors and officers are never liable for corporate losses.

36.) Fred was a partner in a business. The business was sued by one of its suppliers. Fred met with a representative of the supplier to discuss the case. Both Fred and the representative feel that the case should be resolved in arbitration rather than in a court. In order for the partnership to agree to the arbitration

A. all of the partners must agree to the arbitration because it changes the basic risk of the business.

B. a majority of the partners must agree to the arbitration.

C. Fred can unilaterally agree to the arbitration, unless the other partners object.

D. Fred can unilaterally agree to the arbitration.

37.) The Crooked Corporation issued illegal dividends to two shareholders, Joe and Danny. At the time the dividend was paid, Crooked was solvent. Crooked was even solvent after the dividend was paid. Joe knew that the dividend was illegal, but Danny just thought it was a stroke of good luck. Now creditors are suing these two shareholders for the full amount of the dividend. In this situation

A. neither Joe nor Danny has to pay anything to the creditors.

B. Joe must pay the creditors, but Danny may keep the money.

C. both Joe and Danny must pay the creditors.

D. both Joe and Danny must pay the par value of the stock at the time they bought it, but no more than that amount.

38.) Monte plans to be the managing partner of a business entity and knows that he will potentially be personally liable for company debts. Imani will also be a partner but she won't have quite as extensive management authority and she will only be liable for company debts that are incurred based upon her actions. Monte and Imani likely have a

A. Limited partnership

B. Limited liability partnership

C. General partnership

D. Limited liability company

39.) The voting rights exercised by shareholders at meetings allow them _______ control of the corporation and the board of directors.

40.) Which type of taxation does a Limited Liability Company have?