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Short Answer - Practical Application GLOBAL FACTS: Sam cannot decide whether to operate her management business as a Sole Proprietorship or a LLC. 16. If

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Short Answer - Practical Application GLOBAL FACTS: Sam cannot decide whether to operate her management business as a Sole Proprietorship or a LLC. 16. If Sam intends to be the only individual involved in ownership/management, discuss fully whether or not both entity formations - i.e., Sole Proprietorship + LLC - are an available option under the global facts presented. 17. Discuss the taxation and liability implications for Sam for each entity form (Sole Proprietorship + LLC), and discuss if one entity is a clear winner over the others. A. Anna Brown is an attorney and partner in a limited liability partnership (LLP). She is located in the Michigan office. Answer the subparts below which include additional facts: 1. Assume Anna is the supervisor of the attorney who committed malpractice. Describe fully Anna's liability, if any, and justify it. 2. Assume a partner in the Michigan office borrowed $100,000 from a bank without notifying other partners. Describe Anna's liability, if any, for this obligation and justify it. 3. Would liability differ if this was a general partnership and Anna was a general partner? Discuss. 4. Assume Jo Brown is a limited partner in a limited partnership (LP) called "Bond, Carter and Brown, L.P." Discuss the ramifications to Jo of the business name if no one else in the LP has the surname "Brown." B.Sam is a limited partner in a limited partnership engaged in real estate construction. Discuss fully the impact on his limited partnership status and potential liability if he does any of the following acts: 1. Asks for a monthly meeting. 2. Bids on behalf of the LP to begin construction of a new shopping mall in town while telling bidders she is a "major partner" in the "partnership"3. Sam and Pat want to co-own a law firm, particularly a PLC (professional limited liability company) in Michigan. Sam is a licensed attorney. Al is a paralegal and, thus, does not have a license to practice law, may Sam and Pat both own shares in the LLC? Why or Why not? and analyze each person separately. 4. Sam is withdrawing from a business; the written agreement is silent on the issue of withdrawal. Discuss the effect of Sam's withdrawal on the continued existence of the business in each of the following circumstances: 5. the business is a general partnership in Michigan and Sam is a general partner 6. the business is a manager-managed LLC and Sam is one of five managers: 7. the business is a corporation and Sam is a shareholder/officer. 8. The operating agreement for a business is silent on the allocation of profits and losses to its three members. Sue contributed 60% of the capital; Mark contributed 20% and Jules contributed the other 20%. Discuss fully how will profits of $100,000 be distributed in each of the following circumstances: 9. The business is a limited liability partnership (LLP) 10. The business is a limited liability company (LLC) 11. The business is a limited liability partnership (LP) 12. Assume that ABC Inc. failed to send notice of its annual shareholders' meeting to Claire, a shareholder with 15 shares. What may Claire do? What can the corporation do, if anything to "save" the meeting? 13. LMN, Inc. has amended its articles several times, making them confusing to read. What should LMN do to "clean up" its articles?14. Jackie Taylor is sued when one of her employees accidentally spills scalding coffee on a patron causing serious burns and requiring plastic surgery. 15. Assume Jackie operates a sole proprietorship. Is she liable for this act? Why or why not? 16. Assume the business has $10,000 in its accounts and the patron obtains a $50,000 judgment against the business: What assets will be available to the patron to ensure compensation for the injuries if the business is a sole proprietorship? 17. How could Jackie protect herself from risk inside a sole proprietorship? 18. Assume the business is a small corporation, what assets of Jackie's, if any, will be available to the patron to ensure compensation for injuries? 19. Assume the business is a limited partnership and Jackie is a limited partner, what assets of Jackie's, if any, will be available to the patron to ensure compensation for injuries? 20. Assume the business is a general partnership; that Jackie has a total of 3 partners (Jackie being one of them); and that the operating agreement is silent on the issue of liability. Discuss fully and identify the name and principle that governs your answer here. 21. Two years ago, Harris & Walter, Inc. purchased a parcel of land in Seldridge, Michigan for $1,000,000. At the time of the purchase, the corporation used a licensed real estate broker and gave serious consideration to the purchase. Due to unexpected decline in the real estate market, the parcel is now worth only $600,000. Define and discuss any defense to liability the directors may assert if sued for the loss in value/decision to purchase in the first instance. 22. The bylaws of A-1 Inc. provide that shareholders must be of record 30 days prior to a meeting in order to receive notice of and to vote at the meeting. The annual meeting will be held on July 1. On June 1, Taylor Evert owns 150 shares of stock of the corporation. On June 5, he sells these to Diana O'Hara. Who, if not both, is entitled to notice of and to vote at the meeting? Why

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