FREE WA Bar Business Associations Questions and Answers

Question 1

Which of the following is a characteristic of a general partnership under Washington law?

Accepted Answer

Equal management rights among partners unless otherwise agreed

Answer

Limited liability for all partners

Answer

The requirement to file a formal document with the state to form the partnership

Answer

Taxation at the entity level

Question 2

Under Washington law, which of the following is true regarding the liability of a partner in a limited partnership?

Accepted Answer

Limited partners are liable only to the extent of their capital contributions

Answer

General partners have limited liability

Answer

Limited partners manage the business and have full liability

Answer

All partners share equal liability

Question 3

What is required for the formation of a limited liability company (LLC) in Washington?

Accepted Answer

Filing Articles of Organization with the Secretary of State

Answer

The issuance of shares to members

Answer

A formal partnership agreement

Answer

A minimum of two members

Question 4

Under Washington law, which of the following is NOT a duty owed by a corporate director to the corporation?

Accepted Answer

Duty of obedience

Answer

Duty of care

Answer

Duty of loyalty

Answer

Duty to avoid conflicts of interest

Question 5

Which of the following best describes the concept of "piercing the corporate veil" under Washington law?

Accepted Answer

Disregarding the corporate entity to hold shareholders personally liable for corporate debts in cases of fraud or injustice

Answer

Holding shareholders personally liable for corporate debts when the corporation is adequately capitalized

Answer

Allowing shareholders to sue the corporation directly for corporate mismanagement

Answer

Applying corporate law principles to partnerships