1. Lisa started a small catering business in her home. She worked on her own. This business is a sole proprietorship.
2. If Lisa wanted to call her business Lisas Lunches, she would have to register under the Business Names Act in Ontario (or similar legislation in other provinces).
3. If Lisas Lunches borrowed $15,000 from the bank to pay someone to develop a website for her, and could not repay the loan out of business revenue, how much would Lisa be personally liable for? _______________________________________________.
4. Lisas sisters, Janice and Elana, decided to join her in the business. They did not have a formal arrangement, but each sister contributed some money so they could rent a commercial kitchen and expand the business. Lisa contributed $15,000, Janice contributed $10,000 and Elana contributed $5,000. What kind of business is this? ______________________________
5. The sisters catered a party where the guests got food poisoning from contaminated meat. The client sued the business for $30,000. How much could Lisa be required to pay? ____________________________________
6. How much could Lisa recover from Elana? _________________________________________
7. Doreen, the sisters mother, wanted to help her daughters succeed so she invested $20,000 in their business. She wanted to participate in the profits but did not want to be involved in running the business. What kind of business structure is this? ____________________________________
8. If a customer sued the business for $30,000, how much would Doreen have to pay? _______________________________
9. Lisa hired a law firm, Kerbel Caplan LLP, to defend the lawsuit referred to in question 8, but Kerbel, her lawyer, missed a deadline and the business lost the lawsuit. If Lisa sued Kerbel Caplan LLP for $ 40,000 for professional negligence, how much would Caplan, the other partner, be responsible for? _________________________________________
10. Lisa decided to incorporate Lisas Lunches Limited. The three shareholders are Lisa, Janice and Elana; each contributed $10,000 in exchange for 1000 shares of the company. If Lisas Lunches Limited could not repay its bank loan of $50,000, how much would Lisa be personally responsible for? ______________________________________________