Charles and Lee are partners in Mountain Sports, which sells outdoor sporting equipment. Charles manages the business. Unless the partnership agreement states otherwise, Charles is ____________.

entitled to reasonable market wages as compensation for his work on behalf of the business

not entitled to compensation for his work on behalf of the business

entitled for the value of his work on behalf of the business to be attributed as additional capital contributions

entitled to compensation in proportion to his original captial contribution

Mason and Dylan have pooled their money together to buy a piece of property that they plan to operate as an Airbnb. Mason, a lawyer, handles all of the legal aspects of the purchase, but has filed no formal business registration papers with the state. Dylan, a general contractor, handles all of the property maintenance and repairs. Mason and Dylan are engaged in a __________.

general partnership

limited partnership

limited liability partnership

limited liability limited partnership

At what stage are the partnership debts paid and the proceeds distributed to the partners?

During dissociation.

Before distribution.

During winding up.

During buy-out.

Ralph, Roscoe, and Fred are partners in a limited partnership. Fred is the general partner, while Ralph and Roscoe are both limited partners. Their partnership agreement did not address dissolution or how long the partnership would last. Fred decided to leave the partnership to pursue other business opportunities.

What happens when Fred notifies Ralph and Roscoe that he intends to withdraw?

Ralph and Roscoe will have a limited period of time to identify a new general partner.

Ralp and Roscoe may elect to continue the partnership and all they need to do is buy out Fred's interest.

The partnership will be subject to an automatic penalty for failing to satisfy the statutory requirements for limited partnerships.

Ralph or Roscoe must notify their registered agent of Fred's departure.

Emily and Gwen operate a photography studio, "Picture This," as partners. For federal income tax purposes, Picture This will be treated as ____________.

if it were a flesh-and-blood person

a pass-through tax entity

a tax-paying entity

a shell business entity

Louis was a partner in a large firm. He died unexpectedly. His son, Neil, wanted to take over for his father in the partnership and was well-qualified to do the work his father had done.

Which statement best describes Neil's rights in the partnership if he inherits his father's interest?

Neil can step into his father's shoes as partner in the firm.

Neil may inherit the value of his father's partnership interest, but he may not become a full partner in the firm.

Neil has no rights to his father's partnership interest.

Neil cannot become a full partner, but he can vote on firm matters.

Carolyn and David became co-owners in a general partnership. Carolyn managed the business aspects of the business, such as bookkeeping, while David provided the bulk of customer service activities.

This year, after expenses, the partnership had a profit of $100,000. How will this income be taxed?

Since Carolyn managed the business aspects of the partnership, she will pay the taxes.

The partnership will pay half of the tax bill while Carolyn and David will each pay one-fourth of the tax bill.

The partnership will pay the tax bill.

Carolyn and David will be responsible for paying the tax bill.

Alex and Sarah formed a general partnership. Their partnership agreement states that profits will be allocated 60% to Alex and 40% to Sarah. The partnership agreement is silent about how losses will be allocated. Under the North Carolina laws governing partnerships, how will losses be allocated to Alex and Sarah?

Losses will be allocated evenly; 50% to Alex and 50% to Sarah

Since he receives a greater share of profits, Alex will be allocated 100% of the losses.

Losses will be written off on the partnership's tax return so that neither partner will be allocated losses.

Losses will be allocated the same way profits are: 60% to Alex and 40% to Sarah.

Under what type of securities offering must the issuer determine if the investor is an accredited or sophisticated investor?

Regulation A, Tier 1 offering

Intrastate (Rule 147) offering

Regulation D offering

Public offering