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Chapter 1: Choosing a Legal Form (LLC, Corportion, Partnership)

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Questions in this quiz (10)

  1. 1The term "flow through tax entity" describes...
    1. AA form of taxation necessary for Corporations, where they must apply a tax to their sale of stocks and options
    2. BSole proprietorship, where the owner of the business is responsible for all the business’ debt
    3. CNeither
  2. 2A sole proprietorship is a true business entity.
    1. ATrue
    2. BFalse
  3. 3Corporations pay income tax on their profits; shareholders must then...
    1. Apay tax again on the dividends received from the corporation aka. Double Taxation.
    2. Bpay a fee to the corporation for the ownership of stock aka. Double Taxation.
  4. 4Corporations can have different classes of stock.
    1. ATrue
    2. BFalse
  5. 5Venture capitalists almost always refuse to invest in LLCs preferring corporations instead. Which of the following statements does NOT support this reasoning?
    1. ACorporations are easier to merge, sell or take public
    2. BCorporations can issue stock options
    3. CThe general legal uncertainty involving LLCs (in terms of laws and regulations)
    4. DTax issues for LLCs are complex
    5. EOnce an LLC is established, it does not have as many housekeeping rules as corporations
  6. 6LLC dissolves upon the withdrawal, death or expulsion of a member whereas Corporations have perpetual existence: they can continue without their founders.
    1. ATrue
    2. BFalse
  7. 7Partnerships are a taxable entity.
    1. ATrue
    2. BFalse
  8. 8Managers in a partnership have a fiduciary duty. Which of the following responses does NOT corresponding to an existing fiduciary duty?
    1. APartners are liable to the partnerships for gross negligence or intentional misconduct
    2. BPartners can compete within the partnership
    3. CA partner may not take an opportunity away from the partnership unless the other partners consent
    4. DIf a partner engages in a conflict of interest, he must turn over any profits he earned from that activity to the partnership
  9. 9Oral agreement is enough to form a legally binding Partnership.
    1. ATrue
    2. BFalse
  10. 10Partnership by implication and Partnership by Estoppel are essentially the same concept.
    1. ATrue
    2. BFalse

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Description
Managing Legal Risk in the Hospitality Industry Part II, Chapter 1 Quiz
Language
English
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