The Law of Corporations and Other Business Organizations 6th Edition by Angela Schneeman – Test Bank

Complete Test Bank With Answers

Sample Questions Posted Below

CHAPTER 5

Limited Liability Partnerships and Limited Liability Limited Partnerships

D. partnership debts and obligations incurred

due to the wrongdoing of other partners.

MULTIPLE CHOICE

1. Unlike the general partnership, in which all

partners have personal liability for the debts

and obligations of the partnership,

A. the limited partnership offers limited personal liability for all partners.

B. the limited liability partnership offers

limited personal liability for all partners.

C. the limited liability limited partnership

offers limited personal liability for all partners.

D. both the limited liability partnership and the

limited liability limited partnership offer

some degree of limited personal liability for

all partners.

ANS:

5. In states that have adopted partial shield statutes, partners may not be held

personally liable

for

A. any debts and obligations of the partnership.

B. partnership obligations incurred due to their

own wrongdoing.

C. partnership debts and obligations incurred

due to the wrongdoing of other partners.

D. both B and C.

ANS:

2. The number of limited liability partnerships in

the United States has

A. decreased since 1998.

B. grown at an impressive rate.

C. surpassed the number of corporations.

D. remained about the same since 1998.

B

ANS:

3. In most states, limited liability partnerships are

governed by

A. special provisions within the state’s uniform partnership act.

B. the state’s limited liability partnership act.

C. special provisions within the state’s business corporation act.

D. special rules put forth by the secretary of

state.

ANS:

C

6. State partnership laws generally have provisions

A. requiring a vote of all partners to elect

limited liability partnership status.

B. requiring the filing of a statement of qualification to elect limited liability

partnershipstatus.

C. establishing annual reporting requirements

for limited liability partnerships.

D. providing for all of the above.

ANS: D

ANS:

B

D

7. The statement of qualification to elect limited

liability partnership status generally does not

include

A. the name of the limited liability partnership.

B. the street address of the partnership within

the state where the statement is filed.

C. a statement that the partnership elects to be

a limited liability partnership.

D. a statement indicating which partners are

general partners and which partners are

limited partners.

A

4. In states that have adopted full shield statutes,

partners may be held personally liable for

A. any debts and obligations of the partnership.

B. partnership obligations incurred due to their

own wrongdoing.

C. no debts and obligations incurred by the

partnership.

ANS:

D

8. As of late 2011,

A. several states had adopted statutes approving the formation of limited liability

limited

partnerships.

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PART II Test Bank

B. most states had adopted the Uniform Limited Liability Limited Partnership Act.

C. there was little uniformity among the states

with regard to limited liability limited partnership law.

D. both A and C are true.

ANS:

D

9. The Limited Partnership Act of 2001

A. assumes that all limited partnerships are

limited liability limited partnerships.

B. does not permit limited liability limited

partnerships.

C. provides for an easy election to form either

a limited partnership or a limited liability

limited partnership.

D. does not provide for the limited liability of

general partners.

ANS:

C

10. A disadvantage of doing a business as a limited

liability limited partnership formed under the

Limited Partnership Act of 2001 is that

A. general partners do not have limited liability for the debts and obligations of

the

partnership.

B. the limited liability limited partnership is

not formed until the proper documentation

is filed with the secretary of state.

C. limited partners may not participate in the

management of the partnership business.

D. the limited liability limited partnership is

subject to double taxation.

ANS:

B

TRUE/FALSE

11. No partner of a limited liability partnership ever

has any personal liability for the debts and

obligations of the partnership.

ANS:

F

13. Partners of a limited liability partnership may

be held personally responsible for partnership

obligations incurred due to their own wrong

doing.

ANS:

T14. Some states require limited liability partnerships to carry liability insurance

to protect the

partners from bad investments.

ANS:

F

15. Limited liability partnerships are formed when

the partners sign a limited liability agreement.

ANS:

F

16. In most states, the same number of partners

required to approve an amendment to the

partnership agreement must vote to approve the

limited liability partnership election.

ANS:

T

17. A carefully drafted partnership agreement can

be important to the success of the limited

liability partnership.

ANS:

T

18. Foreign limited liability partnerships generally

do not need to qualify to do business in states

where they do business unless they plan to

incorporate.

ANS:

F

19. Several states have adopted limited liability

limited partnership legislation to offer limited

liability status to both general and limited

partners.

ANS:

T

20. The proper documentation must be filed with

the secretary of state to elect limited liability

limited partnership status.

ANS:

T

12. Partners of a general partnership typically have

joint and several liability for the debts and

obligations of the partnership.

ANS:

T

©2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, orduplicated, in whole or in part, except for use as permitted in a license

distributed with a certain product or

service or otherwise on a password-protected website for classroom use.