ELP Partnership is in the process of winding up. ELP consists of three partners, Emerson, Lake, and Palmer. The partnership has assets of $120,000...

ELP Partnership is in the process of winding up. ELP consists of three partners, Emerson, Lake, and Palmer. The partnership has assets of $120,000 but debts of $60,000. Included in the partnership's debts is $30,000 owed to Emerson. As a result of the dissolution and winding up of the partnership, what do the partners receive?

1. Each partner receives $20,000.
2. Each partner receives $40,000.
3. Emerson receives $30,000 and the other two partners receive $45,000.
4. Emerson receives $60,000 and the other two partners receive $30,000.
5. None of the foregoing distributions is correct. 

The five owners of Kombustible and Ballistic and Otherwise Objectionable Materials ("KABOOM") desire to organize a business entity and properly qualify the company to do business. KABOOM maintains a manufacturing facility in Pennsylvania and sales offices in Pennsylvania, Maryland, and Virginia. KABOOM sells products online and has regularly sold and delivered products to customers in Pennsylvania, Maryland, and Virginia. Over the past year, KABOOM made two sales to customers in Delaware. Answer the following.

Which of the following types of entities are available for use by the owners?

1. Corporation
2. General Partnership
3. Limited Liability Company
4. All of the above

If the owners desire to establish liability protection for themselves, which type of entity may the organizers form?

1. Corporation
2. General Partnership
3. Limited Liability Company
4. Any of the above
5. AorC

Assume that the organizers elect to form a limited liability company. Where may the organizers file articles of organization?

1. Only in Maryland
2. Only in Pennsylvania
3. Only in Virginia
4. In any jurisdiction

Assume that the organizers elect to form a Pennsylvania limited liability company. Apart from Pennsylvania and based on the facts above, where else would you recommend to the organizers that they must qualify KABOOM to do business?

1. Maryland
2. Virginia
3. Delaware
4. All of the above
5. OnlyAandB 

True or False:

1. One of the advantages of a sole proprietorship is that a sole proprietorship enjoys perpetual existence, that is, a sole proprietorship survives the death of the owner.
2. Close corporations are never taxed at the entity level.
3. Articles of incorporation may include, as optional provisions, any provision not inconsistent with law that defines, limits or regulates the powers of any of (a) the corporation, (b) the directors, (c) the stockholders, or (d) any of them.
4. Corporations are the most common form of business organization for companies with large capital needs.
5. Generally, a partner may freely transfer the partner's share of the partnership.
6. One reason to engage in business as a franchisee is to facilitate creativity, improvisation, and innovation within one's own location.
7. The state of Delaware is a preferred corporate haven.
8. Absent an election to the contrary, corporations pay taxes at the entity level.
9. Generally, limited liability companies survive the death of their owners.
10. A promoter is personally liable on any contract signed before the corporation is formed and can never be relieved of personal liability.
11. A joint venture is a partnership for a limited purpose.
12. In order to constitute a partnership, the enterprise must have a profit motive.
13. Within a corporation, shareholders manage the day-to-day business and affairs of the corporation.
14. The liability of a joint venture passes through and is shared among the joint venture participants.
15. Interests in corporations are more readily transferable than partnership interests.
16. Although on its face, the investment transaction that was the subject of the Supreme Court's opinion in Howey involved a sale of real estate, the Court found that the substance of the transaction was the sale of a security as that term is defined in the Securities Act of 1933.
17. The passage of the Securities Exchange Act of 1934 was a precipitating cause of the Great Depression.
18. Liability among partners is joint and several.
19. One role of the Securities and Exchange Commission is to pass upon the advisability of purchasing individual stocks.
20. In Unocal Corp. v Mesa Petroleum Co., the Delaware Supreme Court explicitly prohibited the Unocal board from considering interests of other stakeholders over those of some Unocal shareholders.