Business Law Unit 3

Kristoff and Michaela formed a general partnership and have been in a successful business together for two years. As always, they each must attach a K-1 to their personal income tax forms. What is the purpose of attaching this form?

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  It determines how much money is paid out quarterly to shareholders from corporate profits.

  
  

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  It officially holds the partners liable for financial damages that are caused in the course of business.

  
  

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  It allows the IRS to tell the difference between income earned by salaried and hourly employees and income earned by partners from the profits of the business.

  
  

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  It creates a clause that reduces the amount of total taxes each partner must pay annually.

  
  

Jessa and Tamika hired a lawyer to help them form a partnership for their business idea. When she asks each of them to share their thoughts on capital contribution, what does the lawyer want Jessa and Tamika to discuss?

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  how and why each of them feels they are an important part of the business plan

  
  

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  the purpose of starting their business

  
  

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  a short statement that summarizes their strategic plan

  
  

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  how much money each of them will contribute to the partnership business

  
  

Rose was recently asked to join the strategic planning committee at her company. What will Rose and this committee likely work on?

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  SWOT analysis

  
  

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  capital contributions

  
  

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  limited liability plan

  
  

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  joint venture analysis

  
  

What are some benefits of owning a franchise?

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  creative proprietorship and less paperwork

  
  

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  immediate profits and more decision-making ability

  
  

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  tax exemption and bonus shares

  
  

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  immediate name recognition and strong reputation

  
  

A company’s organizational plan generally includes a vertical diagram that illustrates the owners at the top of the diagram and the _____ at the bottom.

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  competitors

  
  

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  patrons and guests

  
  

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  managers and employees

  
  

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  investors

  
  

Emily was part of a business partnership until she committed fraud in the course of running the business. Who will be held liable for paying the damages?

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  Emily, the person who committed the wrongdoing

  
  

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  Emily and her partner

  
  

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  Emily’s company

  
  

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  the investors in Emily’s company

  
  

Some well-known examples of businesses that began as partnerships are Ben and Jerry’s Ice Cream and Warner Brothers Studio.

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  True

  
  

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  False

  
  

What term best refers to the document partnerships must file with the State Corporation Commission (SCC) that states the purpose, form, and ownership percentage of each partner?

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  General Partnership Promise

  
  

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  Articles of Incorporation

  
  

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  Common Stock Articles

  
  

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  Articles of Organization

  
  

What document must corporations file that details the names and addresses of the officers, the corporation, and the registered agent and also lists the number of shares issued, the stock price, and the purpose of the corporation?

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  Articles of Incorporation

  
  

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  Articles of Intent

  
  

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  Legally Binding Contracts

  
  

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  Articles of Organization

  
  

Limited liability partnerships protect their partners from personal liability. Should an accident or other harm occur in the course of carrying on business, any damages that are incurred are limited to:

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  the personal property of the partner.

  
  

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  the assets of the business.

  
  

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  the personal and business assets of both the partner and their business.

  
  

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  the investors assets only.