Question

business law

8. Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from which they plan to sell the produce and share the profits or losses. Are they partners?

a. Yes. They are an association to carry on a for profit business which they own.

b. No. Because they each control the use of the land.

c. Yes. Because if there is a loss in the land's value, they will all share that loss.

d. No. They are merely joint venturers.

9. Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of the operation of the business. Jess, a business owner, is personally liable if:

a. He is a sole proprietor of the business.

b. The business is a corporation and he is a shareholder.

c. He committed the tort.

d. He is a general partner of the business.

e. Two of the above (a through d)

f. Three of the above (a through d)

10. Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They each work two days a week. Donations fund the day-to-day operations. Do they have a partnership?

a. Yes, since each has control of the operation.

b. Yes, because they are all co-equals in ownership of the shelter.

c. No, because they have made no formal agreement.

d. No, because there is no business for profit.

Answer 1

8. Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from which they plan to sell the produce and share the profits or losses. Are they partners?

While they have pooled in money to do the business of operating a vegetable farm, there is no information regarding the legal structure of the business. We can only assume that it is a proprietary business in which all 3 have a business interest, but not legal partners.

Since there is very little legal structure implied, and since unincorporated Association of persons can be formed without their members realising it, the correct option is D.

9. Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of the operation of the business. Jess, a business owner, is personally liable if:

Out of the options mentioned, the only case where unlimited liability is not applicable is when it is a shareholder of a company.

Correct option is "f. Three of the above (a through d)"

10. Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They each work two days a week. Donations fund the day-to-day operations. Do they have a partnership?

For it to be a partnership firm , there needs to be a agreement. c. No, because they have made no formal agreement.