After renting his space on the Commons, Levi started looking for financial backing so he could order furniture and supplies to start his business. Rather than simply going to a bank for a loan, Levi sought out two people had met since his return to Ithaca. First he contacted Ursula Brew, the bar manager at a popular local college bar. Ursula had impressed Levi with her management skills, and Levi knew Ursula was looking for other business opportunities. Levi asked Ursula if she was interested in investing some money in his new tattoo and piercing parlor. Ursula was very interested, and immediately agreed to kick in $30,000. Levi had $20,000 to add. According to Levi's calculation, however, they needed an additional $20,000 to get the parlor open and running. Levi approached Adam Klausner, a local attorney who was known to invest in local businesses. Klausner agreed to put in $20,000 to the new tattoo and piercing parlor on the condition that both Levi and Ursula would manage the parlor on a day-to-day basis, and that all management decisions would be made by majority vote among Levi, Ursula, and Klausner. Both Levi and Ursula agreed. With $70,000 in his pocket, Levi began preparations for his new parlor. Levi first deposited the $70,000 in his own bank account. He then purchased equipment for the new parlor, including six tattoo chairs, state-of-the-art tattoo and piercing equipment, and lots of art for the walls. Levi purchased all these items from the $70,000 and put them in his own name. Levi and Ursula then interviewed various candidates for the positions of tattoo artists and piercers. After hiring four tattoo artists and three piercers, they were ready to open for business.The parlor opened on September 1, just after the students had returned to Ithaca, and was a big hit. Business was so good, in fact, that Ursula quit her other job to devote full-time to the parlor. For the first three months that the parlor was open, Levi and Klausner received no money. Only Ursula, the artists, and the piercers were paid. Ursula was paid $500 per week and given the title of General Manager. After three months, however, Levi started writing weekly checks of $1,000 each to himself and Klausner. On the check to Klausner, Levi wrote "Klausner share of profits." Levi also increased Ursula's weekly checks from $500 to $1,500 but continued to write on the check "Ursula's weekly salary". Also, during this time, Levi and Ursula became romantically involved and moved in together. The weekly checks continued to be paid in the same manner for the next five months. Levi then decided that he wanted to add three tattoo chairs and one tattoo artist. To do so, he would need additional money. He didn't want to stop writing the weekly checks to himself, Ursula, and Klausner, so he asked if either of them would be willing to invest additional funds. Klausner declined. Ursula said she didn't have any cash on hand but would get a cash advance from her credit card of $20,000, as long as Levi agreed to pay her back for the $20,000 plus any interest she accrued on her card. Levi agreed. Ursula got the advance and gave it to Levi. He deposited the money in his account andpurchased the new equipment in his own name. Levi also obtained a $10,000 loan from GreenBank to nance the new equipment and labor costs. The parlor continued to be successful, and the weekly checks continued in the same manner as before. It was so successful that Levi was able to save an additional $320,000 in prots that he put into a bank account in his name. Even though the parlor continued to prosper, Levi and Ursula's relationship did not. Levi was drinking a lot, and so he was either drunk, asleep, or W all the time. Ursula got sick of his irresponsible behavior and decided to break up with him. She also announced that, unless Levi could \"get his act together and be a responsible partner," she intended to withdraw from the partnership. Levi was very upset by Ursula's decision and subsequent demands, and he became very emotional. He told her that she was never a partner, but only an employee who had loaned money to the business. He said that only he and Klausner were the partners, and therefore the only ones entitled to any prots. He then "red" Ursula as General Manager of the parlor and stopped paying her weekly $1,500 checks. Levi did agree, however, to pay Ursula back for her "loans" of $30,000 and $20,000. Ursula hired an attorney and sued both Levi and Klausner. She claimed she was a partner, and she further demanded her share of the prots from the time Levi cut her off from prot distributions. She also asked the Court to dissolve the partnership so that she could get her share of the business. She also claimed that she should receive a greater percentage of the prots because she had put in a majority of the capital. Levi responded to the lawsuit arguing that Ursula was never a partner, that even if she was, she voluntarily withdrew, and therefore could not ask the Court for back prots. During discovery in Ursula's case against Levi and Klausner, Ursula's attorney found out that Levi had opened a small tattoo shop in Cortland with a woman that Levi was having an affair with. He never told Ursula or Klausner about this. Ursula also found out that he used the prots from the Ithaca parlor to fund the Cortland shop. Ursula amended her complaint to add another claim against Levi for this conduct. Klausner brought his own lawsuit against Levi for the same conduct. Levi defended his actions by claiming that it was standard practice in the tattoo industry for tattoo artists and owners to moonlight at other parlors, and therefore he had not done anything wrong according to industry custom. Question 15 4.5 pts What is the most accurate statement of partnership law? 0 a. The existence of a partnership is a question of the pares' intent and is based on all the facts and circumstances surrounding the formation of the relationship at issue. 0 b. A written partnership is a prerequisite to partnership status under law. 0 c. The most important factor to determine partnership status is the amount of money contributed by each partner. 0 d. Partners do not owe a duciary duty to each other. Question 16 4.5 pts Which statement about limited liability companies is incorrect? O c. Members of LLCs are held personally liable for any debts or liabilities arising from the operation of the LLC. Q d. Restrictions on transferability of an LLC member's units will be enforced unless they represent an effective prohibition against transferability. O b. The position of manager in an LLC is like the combination of a director and ofcer in a corporation. 0 a. LLCs are owned by a member or members and operated by a manager or managers