Which of the following is not suitable to general partners? They are not subject to same liabilities Share equally managing the business They share equally the liability Share equally financing the business
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- To Partner or Not to Partner John Willis, who is 27 and single, had just completed his fifth year of employment as a carpenter for a very small homebuilder. His boss, the sole owner of the company, is Tyrone Young. A few days ago, Tyrone asked John if he would like to become a partner, which he could do by contributing $70,000. In turn, John would receive 40 percent of all prof- its earned by the business. John had saved $30,000 and could borrow the balance from his grandmother at a low-interest rate, but he would have to pay her back within 15 years. John was undecided about becoming a partner. He liked the idea but he also knew there were risks and concerns. He decided to talk to Tyrone at lunch. Here is how the conversation went. John: I've been giving your offer a lot of thought, Tyrone. It's a tough decision and I don't want to make the wrong one. So I'd like to chat with you about some of the problems involved in running a business. Tyrone: Sure. I struggled with these issues…Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business? A. None of the above B. Avoidance of personal liability C. Possession of a partner D. Little capitalSuppose you have to start business dealings with a company named “XYZ” how will you document the conditions both parties agreed or disagreed on and what are the considerations for such agreement?
- Mr. Ahmed, the general partner of a big furniture store in Muscat is going to contribute a bigger share of money to settle the partnership's liabilities to its creditors. Why Ahmed is going to do so? A. General partners have a distinct legal personality B. None of the choices are correct C. General partners will contribute more because they have more money D. General partners have unlimited liabilityWhich of the following must occur for a new partner to enter the partnership by acquiring an ownership interest directly from an existing partner? A. The new partner must acquire all of the current partner's ownership interest B. Existing partners must know the amount the new partners is paying for the ownership interest C. The new partner must live in the same state as the other partners D. Existing partners must approve the admission of the new partner into partnership1. Rightof Stoppageintransit canbeexercisedby theUnpaid Seller,whereheâ (a) haslosthisrightoflien (b) stillenjoyshisrightoflien (c) either (a)or(b) (d) neither(a)nor (b) 2. RightofStoppageintransit canbeexercisedby theUnpaid Seller,wheretheBuyerâ (a) issolvent (b) becomesinsolvent (c) actsfraudulently (d) actssmartly 3. If,afterthearrivalofgoodsattheirdestination,CarrierorotherBaileeacknowledgestoBuyerorhisagentthatheholds goods on hisbehalf,and continues possession of thegoods, thetransitâ (a) isatanend (b) isdeemedtocontinue (c) isnotatanend (d) isnotaffectedatall 4. Ifgoodsarerejected by thebuyer and theCarrier or otherBaileecontinues inpossessionofthem,and thesellerhasrefused toreceive them back, thentransitâ (a) isatanend (b) isdeemedtobeatanend (c) isnotdeemedtobeatanend (d) isdependentontheCourt’s decision 5. If,afterthearrival…
- In the audit of the James Mobley Company, you are concernedabout the possibility of contingent liabilities resulting from a patent dispute. Discuss theprocedures you could use for an extensive investigation in this area.When a general partnership is sued, the lawsuits often go after the more wealthy partners, ( a) True 0 b) FalseTodd and Mary own a local store. They would like to establish a business plan to ensure it will continue to operate in the event an owner becomes disabled or dies. They do not want to change the structure of their business nor do they want to relinquish any control of the company. Which one of the following statements satisfies Todd and Mary's goals? A)A buy-sell agreement would allow them to continue operating the company without additional participants, while a recapitalization could decrease their ownership interests. B)A buy-sell agreement should be used because it assures the owners of a market for their business, while a recapitalization does not. C)A buy-sell agreement should be used because it allows the owners to set a desired purchase price in a private agreement that cannot be scrutinized by the IRS. D)A buy-sell agreement would enable the owner to create a market for the business; however, gift tax may be incurred when interests are gifted.
- Mini Case Debt vs Equity Holders Companies obtain their funds from two sources: debt and equity. The providers of these funds are protected in different ways. Debt holders have specific contracts with the company, and if the company defaults, they have recourse ahead of shareholders. Shareholders are the bearers of residual risk and in return for the uncertainty this creates, equity finance is more expensive than debt finance – reflecting the risk premium and risk appetite of the shareholders. But, because the shareholders come last and it is not clear what they are entitled to, they operate in conditions of an incomplete contract. Question: If the shareholder’s position is not protected by a contract – unlike the provider of debt- how is it in fact made viable? DiscussGoldie and Hattie want to develop real estate and want to organize it under their states Revised Uniform Limited Partnership Act. Please advise Goldie and Hattie about what they will need to create and capitalize their partnership. What advantages does the limited partnership business form offer to them over the general partnership? What should Goldie and Hattie expect about their personality liability and tax situation?a. What business was LaVista Lottery in? b. What is keno? c. Was this a profitable business? d. So what was the problem? e. Did Bellino discuss his concerns with Anderson? f. What did he do? g. Is there anything wrong with that? h. What is the point of this doctrine? i. But both Bellino and Anderson had a chance to bid on the keno contract. Didn’t they both have the same opportunity? Richard Bellino and Robert Anderson formed LaVista Lottery, Inc. (Lottery) to operate a restaurant, lounge, and keno game in LaVista, Nevada. They each owned 50 percent of the stock of Lottery, and both were officers and directors. Over the next nine years, the Lottery company grossed more than $100 million. Bellino and Anderson each received over $4 million in salary and dividends. Bellino spent more time than Anderson working for the company, in part, because of his personal relationship with Lottery’s lounge manager. Frustrated by Anderson’s unequal contribution, Bellino encouraged the…