If Two Sisters, Simone and Claire, Were Setting Up a Partnership

question 71

Multiple Choice

If two sisters, Simone and Claire, were setting up a partnership to provide French lessons, which of the following arrangements would require a change to the default rules under partnership law?

• A)Simone and Claire each want to receive 50 percent of the profits from the business.
• B)If one of the sisters had to pay out 100 percent of a business obligation, the other would reimburse her for 50 percent of the cost.
• C)Simone and Claire would each contribute the same amount to the partnership initially.
• D)Either sister can make management decisions for the partnership business without the other's participation.
• E)The sisters plan to buy a car, which will be used only in the partnership business.

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Definitions:

Insider Trading

Trading by officers, directors, major stockholders, or others who hold private inside information allowing them to benefit from buying or selling stock.

Tax Evasion

The illegal practice of not paying taxes by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed.

FDA Violations

FDA violations refer to breaches of the regulations set by the U.S. Food and Drug Administration, concerning the safety, manufacturing, and marketing of food, drugs, and medical devices.

Actively-managed Mutual Funds

Mutual funds where managers actively make investment decisions in an attempt to outperform a specific benchmark.