Paul and Laurie Both Worked at the Mall

question 47

Multiple Choice

Paul and Laurie both worked at the mall. They often discussed how frequently they made decisions for customers when helping them pick out gifts. They concluded that knowing the merchandise in all the stores as well as they did, they could make a lot of money by doing Christmas shopping for customers. They discussed the idea at length. Laurie's mom, a buyer for a department store in the mall, referred some customers to them. With more and more customers, they wanted to quit their jobs and devote more time to this new business. Laurie's mom agreed to give them $2000, but doesn't want her liability to go beyond that. On these facts, which of the following is true?

• A) Laurie's mother cannot be a limited partner because it takes four or more general partners before a firm can have a limited partner.
• B) As long as Laurie's mother does not buy on behalf of the customers hiring Paul and Laurie, she can continue to provide services to them, such as sending them customers, and can advise them on marketing and other management problems without losing her limited-partner status.
• C) If Laurie's mom does not follow the statutory provisions governing limited partnerships, she could be deemed a general partner and liable for claims beyond her $2000 investment.
• D) The only way to limit one's liability is to incorporate.
• E) To protect themselves, all of them should be limited partners.

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Definitions:

Laughter Therapy

A therapeutic approach that uses humor and the physical act of laughter to help relieve stress and improve emotional well-being.

Drug Therapy

The treatment of disease or disorder through the administration of pharmaceutical drugs.

Style of Life

A concept in psychology, especially within Adlerian theory, referring to an individual's unique way of achieving personal goals and dealing with life's challenges.

Inferiority Feelings

Emotions of inadequacy or insignificance stemming from a real or imagined comparison to others.