Question

1. Jack and Jill open a candy shop. Jack runs the retail front, while Jill orders all the stock and manages all the finances. Which type of partnership are they most likely to enter into?
2. Ahamed is a successful lawyer. He joins a new law firm bringing his clients will him. The new firm is going to make him a partner. Which type of partnership is he going to enter into?
3. Rong and her wife run a florist. Their mothers decide to invest $5,000.00 each in the flower shop. Six months after investing, Rong’s mother starts coming to the flower shop to assist in its management.
   1. What kind of partnership did the mothers enter into when they first invested?
   2. What kind of partnership did Rong’s mother move into when she started assisting in the management of the flower shop?
4. Identify two advantages of a corporation
5. Identify two advantages of a sole proprietorship
6. Give an example of a company that has a licensing agreement (you may not use the examples from the textbook)
7. Give an example of the type of industry where we typically see an agency as a business relationship (you may not use the examples from the textbook)

Answer 1

1)General Partnership, arise of default being equivalent participation by partners ie.doing their perfection job.

2)Limited Liability Partnership, LLC for professional practitioners ie. lawyer.

3)

a) Limited Partnership, being limited liability of mother to invested amount.

b) Limited Liability Limited Partnership, the mother is limited with invested amount and assistant in business.

4)Advantages of Corporation:

1) Corporation allows the public to participate in

capital and control of company, thus public interest

are taken care.

2) Corporation separates the ownership and management

which makes it easy to make decision for the owner and

managing team.

5)Advantages of Sole proprietorship:

i) Complete control on the business helps in quick decision making.

ii) Control of the operations as per the capital available, so not wastage

of capital or over-investing.