1. Taylor and Kaleb had been equal partners in TK Industries for 20 years. Taylo
ID: 2441551 • Letter: 1
Question
1. Taylor and Kaleb had been equal partners in TK Industries for 20 years. Taylor died, and Kaleb is now winding up the partnership. Which of the following statements about the winding up process is FALSE?
a Kaleb is entitled to compensation for winding up the business.
b Taylor’s estate is entitled to an accounting
Taylor's estate is entitled to participate in the winding up process.
If there are not enough assets in the partnership to pay off all the debts, Taylor's estate will be liable for one half of the losses.
2. Wilhelmina is part of a group of shareholders trying to get a director on the board to support their views on environmental responsibility. The voting method that will allow them to cast all of their votes for the entire election for one candidate is ______ voting.
Proxy
Cumulative
Non-cumulative
Divisible
3. Which of the following is not an advantage of a general partnership?
a.Partners have limited liability for the debts of the partnership.
b.The costs to form a partnership are minimal.
All partners have equal management rights.
d There are no formal requirements of formation.
4. In a Limited Partnership (LP), limited partners risk personal liability for partnership debts when ______.
a The partners offer to sell their interest in the partnership
b The partners express opposition to a decision made by the general partner
c The limited partner becomes overly involved in partnership affairs
d The limited partner decides to contribute significant personal assets as capital to the partnership
5. ______ stock puts investors on notice that they should investigate the financial stability of the corporation before purchasing the stock.
Watered
b No-par value
Par value
d Restricted
a Kaleb is entitled to compensation for winding up the business.
b Taylor’s estate is entitled to an accounting
cTaylor's estate is entitled to participate in the winding up process.
dIf there are not enough assets in the partnership to pay off all the debts, Taylor's estate will be liable for one half of the losses.
Explanation / Answer
1) c is correct
Taylor's estate is entitled to participate in the winding up process.
2) b is correct
Cumulative voting method allows all individuals to vote for a single candidate.
3) a is correct
Partners have limited liability for the debts of the partnership.
4) c is correct
When limited partner becomes overly involved in partnership affairs.
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