1) Assume the football team is set up as a general partnership and that Lenny, Sarah, and Sam are all general partners in the team. The team is sued for negligence because an individual who turned to see the quarterback running naked crashed her car. Which of the following is true?
a) The individual partners may be sued, but not the partnership itself.
b) The partnership may be sued as well as the partners, but the partners' liability is limited to their investment in the firm.
c) The partnership may be sued, but not the individual partners.
d) The partnership may be sued as well as the partners, and the partners' liability unlimited.
2) Assume that the football team is set up as limited partnership. Lenny is the only general partner and Sarah and Sam are the only limited partners. Who would make the decision about whether or not to fire the quarterback?
a) Lenny, Sarah and Sam would vote on it.
b) The board of directors of the team.
c) Only Lenny.
d) Only Sarah and Sam.
3) Assume the football team is set up as a limited partnership Lenny is the only general partner and Sarah and Sam are the only limited partners. The team is sued for negligence because an individual who turned to see the quarterback running naked crashed her car. Which of the following is true?
a) Lenny has unlimited liability and Sarah and Sam have liability limited to their investment in the firm.
b) The only one with liability is the company itself.
c) Lenny, Sarah and Sam all have unlimited liability.
d) Lenny has liability limited to his investment in the firm and Sarah and Sam have unlimited liability.
4) Assume the football team is set up as a limited partnership Lenny is the only general partner and Sarah and Sam are the only limited partners. Which of the following is incorrect?
a) The profits from the team would pass through to the partners.
b) The company must be formed through compliance with state statutes.
c) Distribution of the profit among the partners is set by statute even if set forth in an agreement among the parties.
d) If Sarah and Sam were to act in the management of the team, they would lose their limited liability.