6) Cindy is one of 50 limited partners in a real estate investment LIMITED PARTNERSHIP. The general partner is Evergreen Corporation. Evergreen...

6)        Cindy is one of 50 limited partners in a real estate investment LIMITED PARTNERSHIP. The general partner is Evergreen Corporation. Evergreen Corporation invested $500,000.00 in the partnership and each of the limited partners invested $10,000.00, all of whom are natural persons like Cindy. Evergreen has four shareholders. If the real estate limited partnership is dissolved at a time when it has debts (basic past due electric bills, water bills and rent) exceeding assets, which of the following is true?

a.    Because having a corporation means that no partner in the limited partnership has unlimited liability, the partners would have unlimited liability.

b.    Because having a corporation means that no partner in the limited partnership has unlimited liability, the shareholders of the corporation would have unlimited liability

c.    Neither the corporation nor the limited partners would be required to contribute any assets toward the satisfaction of the unpaid obligations of the limited partnership

d.    The limited partners would not need to contribute any amounts to the satisfaction of the debts (but their initial investment of $10,000.00 is subject to loss towards this debt). The corporation would be responsible for the debt of the limited partnership as it is a general partner but the corporation's individual shareholders would not have personal liability towards the limited partnership debt.

e.    None of the above.

7)        Patty owned a sole proprietorship. She had four salespersons selling the company's products. One of her salespersons made false statements about a competitor's products while trying to sell Patty's products. The competitor sues Patty's business and wins the lawsuit. Under what circumstances could Patty be personally responsible to pay the judgment?

a       None, because this was a debt of the business

b       If Patty was separately named in the lawsuit

c.      If Patty knew about the salesperson's activities

d.      Patty is personally liable here due to the nature of the way she conducted business.

         e.      None of the above

8)        Assume that cloning becomes widespread and human clones become common among our society. However, the clones are treated as slaves without the right to vote or other basic human rights (even though they are just as human as you and I) and Congress is deadlocked in passing any laws granting civil rights of "clones". If a judicial court rules for the first time that clones are human beings with all rights as normal humans, this court has used its:     

a.              Impeachment powers

b.              Its judicial activism powers

c.              Administrative Agency Powers

d.              Eminent Domain powers

e.              All of the above

f.               A & C

g.              None of the above

9)        Rover corporation is a regular corporation that has not elected "S" corporation status. In 1992, Rover earns $100,000.00 after all expenses are paid. In 1993, Rover distributes $50,000.00 to its shareholders. Which of the following best describes the tax consequences to Rover and its shareholders? :

a.              The shareholders are taxed on $100,000.00 in 1992; Rover is not subject to tax for any year

b.              Rover is taxed on $100,000.00 in 1992; the shareholders are not subject to tax for any year.

c.              Rover is taxed on $100,000.00 in 1992; the shareholders are taxed on $50,000.00 in 1992.

d.              Rover is taxed on $100,000.00 in 1992; the shareholders are taxed on $50,000.00 in 1993.

e.              Neither Rover nor its shareholders are subject to tax

FILL IN THE BLANKS

Provide the most accurate legal term

(.50 points each)

10)      In a civil action the plaintiff must prove their/its case by a degree of proof described as ____________________________ to win their case. (Hint---a phrase)