Question
7.Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment complex. Instead of selling it, they decide to continue to operate it
7.Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment complex. Instead of selling it, they decide to continue to operate it for the next few years as a sideline to their other occupations just to see if they can earn some extra money. What are they
a. Partnership.
b. Co-ownership.
c. Corporation.
d. Creditor of the complex.
8.Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from which they plan to sell the produce and share the profits or losses. Are they partners?
a. Yes.They are an association to carry on a for profit business which they own.
b. No.Because they each control the use of the land.
c. Yes.Because if there is a loss in the land's value, they will all share that loss.
d. No.They are merely joint venturers.
9.Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of the operation of the business. Jess, a business owner, is personally liable if:
a. He is a sole proprietor of the business.
b. The business is a corporation and he is a shareholder.
c. He committed the tort.
d. He is a general partner of the business.
e. Two of the above (a through d)
f. Three of the above (a through d)
10.Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They each work two days a week. Donations fund the day-to-day operations. Do they have a partnership?
a. Yes, since each has control of the operation.
b. Yes, because they are all co-equals in ownership of the shelter.
c. No, because they have made no formal agreement.
d. No, because there is no business for profit.
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