12. Which of the following is true of general and limited partners in a limited
ID: 449123 • Letter: 1
Question
12. Which of the following is true of general and limited partners in a limited partnership?
A. Limited partners are exempt from annual capital investment and need only participate in management functions.
B. General partners are not personally liable for partnership debts.
C. General partners are required to invest capital and refrain from managerial activities.
D. Limited partners are not personally liable for partnership debts beyond their capital contributions
Which of the following is true of a franchise?
A. The franchisor and franchisee are established as separate legal entities.
B. A franchisee does not need a license to use the franchisor’s trademark.
C. The franchisee does not have access to the franchisor’s knowledge.
D. A franchise is considered as a joint venture.
Limonelle Corporation owns the secret formula for a popular beverage brand Limonelle. The corporation operates through franchises in over 50 countries. It uses a secret formula to prepare the drink concentrate which is dispatched to the franchises world over. These franchises then prepare and bottle the beverage for distribution. Which of these types of franchises has Limonelle adopted?
A. chain-style franchise
B. processing plant franchise
c. distributorship franchise
D. area franchise
Which of the following is an instance of an area franchise?
A. McDonald’s franchises an independently owned restaurant to make and sell its products in Pennsylvania.
B. Pepsi Co. ships Pepsi in the form of a drink concentrate which is prepared and bottled locally in Canada.
C. Nokia licenses a retail dealer to retail its products in Jacksonville.
D. Burger King wants to start operating in Mexico and hires a Mexican subfranchisor to sell the franchise on behalf of Burger King.
4. Which of the following entities elects members of the board of directors for a corporation?
A. the CEO
B. corporate officers
C. shareholders
D. employees
Which of the following is true of an LLC?
A. An LLC is a creature of federal law.
B. An LLC is regarded a separate legal entity.
C. An LLC cannot hold title to property.
D. The owners of LLC are called general partners or specific partners.
Explanation / Answer
12. The correct answer is option D - Limited partners are not personally liable for partnership debts beyond their capital contributions Limited Partners do not participate in the management decisions General Partners participate in management decisions A general partner has full responsibility for the partnership and for all its debts. 13. The correct answer is Option A - The franchisor and franchisee are established as separate legal entities. A franchisee needs a license to use the franchisor’s trademark. Eg - McDonald's The franchisee does have access to the franchisor’s knowledge. That is basically the rationale behind having franchise, else one can start business with his or her own brand name A franchise is not a joint venture. Franchisor's just receive royalty on the technical know how provided and they both work as a separate legal entity. 14. The correct answer is Option B - Processing plant franchise Processing Plant Franchise refers to situation wherein franchisor provides a secret formula to the franchisee. The franchisee then manufactures the product at its own location and distributes it. Eg - Pepsi Area Franchise is typically involves a greater number of units in a larger territorial area. Franchisor may appoint the master franchisee to negotiate and sell franchises on behalf of the franchisor. Area franchises are generally used when a franchisor wants to enter a market in another country in large scale. Eg- Domino's Chain Style franchise refers to situation wherein franchisee operates under the franchisor's brand name and operates as a unit of the franchisor's business. Eg - Pizza Hut In Distributor Franchise, franchisee basically retails the product manufactured by franchisor 15. The correct answer is Option D. Burger King wants to start operating in Mexico and hires a Mexican subfranchisor to sell the franchise on behalf of Burger King. Area Franchise is typically involves a greater number of units in a larger territorial area. Franchisor may appoint the master franchisee to negotiate and sell franchises on behalf of the franchisor. Area franchises are generally used when a franchisor wants to enter a market in another country in large scale. 16. The correct answer is Option C. shareholders Shareholders are the owners of the companies who have the sole authority to appoint board of directors. 17. The correct answer is Option B -An LLC is regarded a separate legal entity. An LLC can hold title to property, can buy and sell them. The owners of LLC are the partners and one of whom is the managing partner to manage day to day operations. Finally, LLCs are creature of state law and not federal law.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.