a) Lucius Malfoy (a very rich man) is a shareholder of Voldemort Corp (the "Corporation"). So far, Lucius has invested $1 million in the Corporation. The Corporation gets hit with a successful lawsuit for employment discrimination under which plaintiff recovers punitive damages of over $20 million. Since the Corporation only has $10 million in assets, it declares bankruptcy. The unpaid creditors would like to recover the difference from the shareholders. At the end of the day, what will most likely will be the extent of Lucius's losses?

A. $10 million the whole difference because he is jointly and severally liable with the other shareholders

B. $0, because as a shareholder he is insulated from personal liability

C. Whatever his pro rata share is (so if there are 10 shareholders, each would owe $1 million)

D. $1 million his investment in the Corporation

b) Schmidt and Nick decide to go into business together to manufacture, market and distribute a product called "Real Apps," which is a phone case with features you might find useful in everyday life (such as a Swiss Army knife, lighter, etc.) Nick's function is the build the product, while Schmidt handles the marketing side of things. They don't want to be controlled by outside investors, but they do want to limit their tax exposure and personal liability. Which would be the best type of company for them to form?

A. Limited Partnership

B. General Partnership

C. Limited Liability Company

D. Corporation (with no special designation, such as a Close Corporation or S-Corporation)

b) Which of the following is currently not recognized as a separate legal entity apart from its owner(s)?

A. General partnership

B. Sole proprietorship

C. Limited liability company

D. Limited partnership