CHAPTER 14

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1. A sole proprietorship is

a grouping of two or more businesses to undertake a particular project
an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name
a partnership in which the liability of some partners is limited to their capital contribution
a business organization that has only one real owner
a partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners' malpractice

2. A limited partnership is

a grouping of two or more businesses to undertake a particular project
an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name
a partnership in which the liability of some partners is limited to their capital contribution
a business organization that has only one real owner
a partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners' malpractice

3. A limited liability partnership is

a grouping of two or more businesses to undertake a particular project
an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name
a partnership in which the liability of some partners is limited to their capital contribution
a business organization that has only one real owner
a partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners' malpractice

4. A franchise is

a grouping of two or more businesses to undertake a particular project
an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name
a partnership in which the liability of some partners is limited to their capital contribution
a business organization that has only one real owner
a partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners' malpractice

5. A joint venture is

a grouping of two or more businesses to undertake a particular project
an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name
a partnership in which the liability of some partners is limited to their capital contribution
a business organization that has only one real owner
a partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners' malpractice

6. Jane operates a software development business out of her home. She calls it "Amazing Computing Services." Her gross annual income is $60,000. Even though Jane's business is not incorporated as a company and she has only one employee, she is required to

register the name "Amazing Computing Services"
comply with local zoning bylaws regarding non-residential use of her premises
secure a G.S.T./H.S.T. number and charge her clients G.S.T./H.S.T.
remit Employment Insurance and Worker's Compensation premiums
all of the above

7. Jim and Joan were business partners. Their business was not incorporated as a company. When they established their business, Jim contributed $10,000 and Joan contributed $40,000. Jim worked full time in the business and Joan worked half time. The business lost $20,000, which Joan paid out of her personal savings. Their relationship has soured and Jim and Joan have decided to end the partnership. They do not have a Partnership Agreement. Joan wants Jim to settle accounts with her. She says she has invested a total of $60,000 and he has invested only $10,000, and that it would only be fair if each invested $35,000 so he should give her $25,000. How much is Jim legally obligated to pay to Joan?

nothing
$35,000
$30,000
$20,000
$10,000

8. Jack and Jill are business partners. Under their agreement, Jill has authority to purchase assets for the partnership for up to a maximum of $30,000. Larger contracts require Jack's approval. Jill made a contract for the partnership to buy a car for $40,000. The partnership did not have enough money in its account, and Jack eventually wrote a personal cheque for the full amount to the auto dealer. They have since learned that the actual fair market value of the car was $30,000. Jack says Jill owes him $25,000. She says she owes him nothing. What would a court say?

Jill owes Jack $25,000
Jill owes Jack $20,000
Jill owes Jack $10,000
Jill owes Jack $5,000
Jill owes Jack nothing

9. Kim, Gwen, and Viola are partners in a law firm. Gwen has told Kim and Viola many times over the years that the firm is not in the business of investing money for clients and that they are never to invest for clients. Unbeknownst to Gwen and Viola, last year Kim made several investments on behalf of an elderly client. The investments were, in fact, ill-advised and would not have been made by a competent professional who took reasonable care. The elderly client has lost a considerable amount of money as a result and is sueing to recover her loss. Who is liable?

Kim
Viola
Gwen
a & b
all of the above

10. Generally, corporate shareholders are entitled to receive dividends only if

the company has earned a profit
the directors have declared a dividend
a new share issue has been approved
a & b
all of the above