Which of the following statements is correct concerning the similarities between a limited partnership and a corporation?

• Each is created under a statute and must file a copy of its documentation with the proper state authorities.

• All corporate stockholders and all partners in a limited partnership have limited liability.

• Both are recognized for federal income tax purposes as taxable entities.

• Both are allowed statutorily to have perpetual existence.

The apparent authority of a partner to bind the partnership in dealing with third parties

• Will be effectively limited by a formal resolution of the partners of which third parties are aware.

• Will be effectively limited by a formal resolution of the partners of which third parties are unaware.

• Would permit a partner to submit a claim against the partnership to arbitration.

• Must be derived from the express powers and purposes contained in the partnership agreement.

Which of the following rights is a holder of a public corporation's cumulative preferred stock always entitled to?

• Conversion of the preferred stock into common stock

• Voting rights.

• Dividend carryovers from years in which dividends were not paid to future years.

• Guaranteed dividends.

Which of the following is an advantage of forming a limited liability company (LLC) as opposed to a partnership?

• The entity may avoid taxation

• The entity may have multiple owners.

• The owners may participate in management while limiting personal liability.

• The owners may receive allocations and distributions disproportionately.

Which of the following forms of business generally provides all owners with limited liability while avoiding federal taxation of income at the entity level?

• C corporation.

• S corporation

• Partnership

• Limited partnership

The limited liability of a stockholder in a closely-held corporation may be challenged successfully if the stockholder

• Undercapitalized the corporation when it was formed

• Formed the corporation solely to have limited personal liability.

• Sold property to the corporation

• Was a corporate officer, director, or employee.

A general partnership must

• Pay federal income tax

• Have two or more partners.

• Have written articles of partnership.

• Provide for apportionment of liability for partnership debts

Baker sold an automobile to Old Autos Depot, Inc., where Fuller is a manager. Fuller took $100 from Baker for encouraging the sale. What duty to Old Autos Depot, Inc., did Fuller violate?

• Reasonable care.

• Reimbursement

• Obedience

• Loyalty

In a general partnership, which of the following acts must be approved by all the partners?

• Dissolution of the partnership.

• Admission of a partner

• Authorization of a partnership capital expenditure.

• Conveyance of real property owned by the partnership

Which of the following entities must pay taxes for federal income tax purposes?

• General partnership

• Limited partnership

• Joint venture

• C corporation.