Week 2 Quiz - Results

In the business organizations context, LLC stands for:

An XYZ, Inc. employee negligently runs down a client with her car when arriving at a business meeting in Indiana. As a result, the client brings a tort suit against XYZ, Inc. Assuming the same facts as in the previous question, which jurisdiction's tort law applies?

• Ohio

• Kentucky

• Indiana

• Hawaii

• Delaware

Which of the following is a difference between a partnership and a limited partnership (LP):

• An LP is subject to double taxation; a partnership is not.

• An LP provides some of its owners with a liability shield; a partnership does not.

• An LP is easier to form than a partnership.

• It is more difficult for an LP to attract investors than it is for a partnership.

Which of the following is a difference between a corporation and a limited liability company (LLC)?

• A corporation cannot be taxed under Sub-K; an LLC can.

• A corporation provides all its owners with a liability shield; an LLC does not.

• A corporation is subject to double taxation; an LLC is not.

• A corporation is easier to form than an LLC.

A principal difference between a partnership and a limited liability partnership (LLP) is:

• An LLP is governed by a different state statute.

• An LLP is subject to double taxation.

• An LLP provides its owners with a liability shield.

• An LLP is easier to form.

Which of the following is an advantage a general partnership (GP) provides over a limited liability partnership (LLP)?

• A GP is not required to have a written partnership agreement

• A GP is easier to form

• A GP is governed by a more flexible statute

• A GP can have a single owner

A big drawback of operating a business as a sole proprietorship is:

• A sole proprietorship is relatively difficult to form.

• The business's income is subject to double taxation.

• The sole proprietorship statute is overly complicated.

• A sole proprietorship provides no liability protection to its owner. (Bcs: Unlike, for example, an owner of a corporation, an LLC, or LLP, a sole proprietor is personally liable on all obligations of the business.)

XYZ, Inc. is incorporated in Ohio, headquartered in Kentucky, and does 90 percent of its business in Indiana. An XYZ, Inc. shareholder brings a suit against the XYZ, Inc. board of directors for a corporate law breach of fiduciary duty stemming from a decision made by the board at a board meeting held in Hawaii. The corporate breach of fiduciary duty claim will be governed by the law of which jurisdiction?

• Ohio

• Kentucky

• Indiana

• Hawaii

• Delaware