CT Bar - Connecticut Bar Business Associations: Formation/Liability Questions and Answers

Question 1

Two entrepreneurs in Hartford begin operating a food truck business as a general partnership but never file any formation documents with the state.
They agree to split profits and losses equally.
One partner, while negligently operating the food truck, causes an accident resulting in significant damages to another vehicle.
Who is liable for the damages?

Accepted Answer

Both partners are jointly and severally liable for the full amount of the damages.

Answer

The negligent partner is solely liable.

Answer

The partnership entity is solely liable, and the partners' personal assets are shielded.

Answer

Only the non-negligent partner is liable, as the negligent partner was acting outside the scope of partnership business.

Question 2

A promoter signs a 5-year lease for office space in New Haven on behalf of 'Future Tech, Inc.,' a corporation that has not yet been formed. The lease is signed by the promoter as 'Jane Doe, President of Future Tech, Inc.' After the corporation is properly formed, the board of directors formally adopts the lease at its first meeting. If the corporation later defaults on the lease, who is the landlord's primary party to sue for breach of contract?

Accepted Answer

The corporation, Future Tech, Inc., because it adopted the contract.

Answer

The promoter, Jane Doe, because she signed the contract before the corporation existed.

Answer

Both Jane Doe and Future Tech, Inc. are liable, as the adoption creates co-liability.

Answer

Neither party is liable, as the contract is void from the beginning.

Question 3

Under Connecticut law, which of the following is NOT required to pierce the corporate veil and hold a shareholder personally liable for a corporation's debt?

Accepted Answer

The shareholder's failure to observe corporate formalities, such as holding annual meetings.

Answer

The shareholder exerted complete domination and control over the corporation.

Answer

The shareholder's control was used to commit fraud or an intentional wrong.

Answer

The shareholder's control and wrongful act proximately caused the plaintiff's injury.

Question 4

An individual attempted to form a limited liability company (LLC) in Connecticut by sending the certificate of organization to the Secretary of State. Due to a clerical error at the post office, the document was never delivered or filed. Believing the LLC was formed, the individual entered into a contract with a supplier on behalf of the purported LLC. If a dispute arises, which legal doctrine might protect the individual from personal liability against the supplier who believed they were dealing with an LLC?

Accepted Answer

Corporation by estoppel

Answer

De jure corporation

Answer

Respondeat superior

Answer

Apparent authority

Question 5

Three friends decide to form a Connecticut Limited Liability Company (LLC) for their new consulting business. To properly form the LLC, what is the essential document they must file with the Connecticut Secretary of the State?

Accepted Answer

The Certificate of Organization

Answer

The Operating Agreement

Answer

A Statement of Partnership Authority

Answer

The Articles of Incorporation

Question 6

Which of the following business structures provides limited liability to ALL of its owners by default, protecting their personal assets from the business's debts and obligations?

Accepted Answer

Limited Liability Partnership (LLP)

Answer

Sole Proprietorship

Answer

General Partnership

Answer

Limited Partnership