1. What kind of business organization areCaleb and Anna operating under now?

A sole proprietorship.

A general partnership.

A limited partnership.

A corporation.

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2. Suppose the agreement that was writtendoes not say anything about how the partnership was to be run, howwould the courts determine how the business is controlled?

Each partner would have equal votes as to the operation of thepartnership.

Voting would be apportioned to the amount of capital each hadinvested.

Voting would be apportioned to the amount of time that each hasspent running the partnership.

Control would be solely in the hands of the partner the courtdetermined was the "principal partner."

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3. If Anna originally invested $5,000 andCaleb invested $1,000 in the business, and the business made aprofit of $60,000, how would the profit be split?

If the partnership agreement tells how the profits will besplit, then they will be split using the terms of theagreement.

If the partnership agreement does not tell how the profits willbe split, then they will be split evenly ($30,000 to both).

Regardless of what is in the partnership agreement, Anna willget $50,000 of the profit and Caleb will get $10,000.

Both "If the partnership agreement tells how the profits will besplit, then they will be split using the terms of the agreement"& "If the partnership agreement does not tell how the profitswill be split, then they will be split evenly ($30,000 to both)"are correct.

The correct answer is:

4. Assume that Wizard Internet isoperating as a general partnership, what is Caleb's personal tortliability for Anna's actions within the scope of the business?

Caleb is personally jointly and severally liable along withAnna.

Caleb is personally liable only to the point where Anna couldnot pay damages.

Caleb would only be personally responsible for his own actions,not those of Anna.

Since it is a partnership, neither would have personalliability. Only the business itself would have liability.

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5. Assume that Wizard Internet is allowedby state law to form a Limited Liability Partnership. If Anna andCaleb were to do so which of the followingis incorrect?

The profits from Wizard Internet would pass through to thepartners.

If Anna were to commit an act of malpractice, Caleb would beliable as well.

The operation would be similar to that of a generalpartnership.

The company must be formed through compliance with statestatutes.

The correct answer is:

Answer rating: 100% (QA)

Answer The correct Option is as follows 1 A Limited partnership Because both are fully liable ... View the full answer