Question

15.In a limited liability partnership (LLP)

a.a partner may avoid liability for the malpractice of other partners.

b.a partner who commits malpractice is automatically expelled from the partnership under the UPA.

c.the maximum number of partners is limited by the law of most states.

d.it is deemed unethical to employ non-professionals.

17.A limited liability company

a.is presumed to be member managed.

b.is presumed to be manager managed.

c.may not have members who are foreign nationals under federal law.

d.can have a duration of no more than 25 years under the law of most states.

19.A syndicate

a.cannot be incorporated under the law of most states.

b.is a type of criminal(organized crime) organization.

c.is an investment group formed to finance a particular project.

d.is an income tax avoidance device.

Answer 1

15. Option a is correct. In LLP (Limited Liability Partnership) each partner is safeguarded against any malpractice done by other partner(s). Therefore, a partner can avoid liability for the malpractice of other partners.

Option b is incorrect as expulsion or removal of partner is ruled by the partnership agreement and not the UPA.

Option c is incorrect as there is no limit on number of partners in an LLP. But there are restriction on what kind of professionals can form a LLP in some states.

Option d is incorrect as non-professionals can be employed by LLP or any other type of organisations for services like HR, back office operations, etc.

17. Option a is correct since in case of LLP the partners manage the business by themselves and no external management is hired. Therefore, Option b is incorrect too.

Option c is incorrect as LLP can have foreign national as members.

Option d is incorrect as their no fixed duration for LLP under any state law.

19. In finance terminology a syndicate is a group of bankers or investors who come together to give loan to a company or a project. It is one of the popular sources of project finance. Therefore Option c is correct.

Option a is wrong since it is legal to form syndicate for giving out loans.

Option b is incorrect as criminal organisation are also called syndicate but usually have crime work suffixed to the term syndicate.

Option d is incorrect since no tax avoidance takes place in formation of syndicate.