Paul and Laurie Both Worked at the Mall

question 102

Multiple Choice

Paul and Laurie both worked at the mall.They often discussed how frequently they made the decision for the customer as to what should be bought as a gift.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.As they gained more and more customers,they wanted to quit their jobs and devote more time to this new business.Laurie's mother would give them $2000,but doesn't want her liability to go beyond that.Given 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 by sending them customers, and can advise them on marketing and other management problems, and not lose a limited partnership status.
• C) If Laurie's mother 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:

Social Responsibility

The obligation of an organization to act in ways that benefit society at large, including ethical practices, environmentally sustainable operations, and community engagement.

Stakeholder Obligations

Responsibilities or duties a company owes to its stakeholders, including customers, employees, investors, and communities.

Pricing Objectives

Goals that a company aims to achieve through its pricing strategies, such as maximizing profit, increasing market share, or discouraging competition.

Survival

The act of continuing to live or exist, often in spite of an accident, ordeal, or challenging circumstances.