Multiple choice

1. Chocolate Sundry LLC’s members and managers are Devlin, Effie, and Flavia. After Devlin’s relationship to the firm ends, Effie and Flavia agree to discontinue the business. This is

a. illegal.

b. optional.

c. wrongful.

d. required.

2. Venture Capital, LP, is a limited partnership. Its limited partners include more than 150 sophisticated investors investors and investment professionals. A Venture limited partner loses his or her limited liability if he or she

a. does not participate in the firm’s management. 

b. fails to vote on the firm’s sale or dissolution. 

c. acts as the firm’s manager. 

d. invests in Unified Fund, one of Venture’s competitors. 

3. Raul is chairman of the board of Swif-Vac Corporation. Pinky, a consumer, is injured while using a Swif-Vac product. Pinky sues Swif-Vac, and Raul individually. Swif-Vac may pay Raul’s legal fees under

a. the director’s right to compensation.

b. no circumstances.

c. the director’s right to indemnification.

d. the director’s right to certification.

4. Gizelle, Haya, and Ivy do business as Janitorial Services, Limited Partnership. After Gizelle’s relationship to the firm ends, Haya and Ivy agree not to continue the business. This is

a. simple misconduct.

b. gross negligence

c. dissolution.

d. dissociation.