GreenTech Innovations is a publicly traded company that designs renewable energy solutions. The company’s board of directors includes the following members:  Alice, the company’s CFO, who has been with GreenTech for 10 years. Brian, a former CEO of another renewable energy firm, who has no other role at GreenTech. Carla, a senior engineer at GreenTech for 15 years. David, an independent venture capitalist who invests in clean energy startups. All of the members receive compensation for their board service and all board members own shares. During the board meeting, the directors discuss executive compensation, strategic partnerships, and long-term R&D initiatives. Which of the following correctly distinguishes inside directors from outside directors in this scenario?

TechPro Innovations is a software firm solely owned by Dana. Dana occasionally collaborates with Jordan, a freelance programmer, on specific client projects. During client meetings, Dana introduces Jordan as “my partner” to impress clients and secure larger contracts. Jordan has no ownership interest in TechPro, does not share in profits beyond agreed-upon freelance fees, and never formally agreed to be Dana’s partner. One client, relying on Dana’s statement, signs a $100,000 contract with TechPro. When TechPro fails to deliver, the client sues, claiming that Dana and Jordan operate as partners in the business.  Based on the facts above, what type of partnership, if any, may exist between Dana and Jordan?

Ethics Question: Assume a business is organized as an LLC with Casey and Quinn as managing members and Sam as a passive, non-managing member. Casey secretly takes a profitable construction job opportunity for his own separate business without informing Quinn or Sam. Which of the following is MOST likely true?

Vantage Robotics, Inc. has a nine-member board of directors. Vantage’s bylaws require a majority of the board to constitute a quorum at any board meeting. At a duly called meeting, five directors are initially present, satisfying the quorum requirement. Partway through the meeting, one director leaves early, leaving only four directors present. The remaining four directors vote unanimously to approve a resolution authorizing a major equipment lease. Is the resolution validly adopted?

Fred is a limited partner in Bolton & Jost, a limited partnership organized to develop apartment buildings. After general partner Jost became ill, Fred assumed Jost’s day-to-day management responsibilities and has continued to manage the business’s daily operations ever since. Fred has also had preliminary discussions with two individuals about forming a separate partnership to develop apartment buildings in direct competition with Bolton & Jost. Under the Revised Uniform Limited Partnership Act (RULPA), which of the following statements is correct?

Andrews and Baker form a limited liability company (LLC) for the purpose of running an organic foods grocery store. Each invested $100,000 in the restaurant to get it started. One year later, Donna is shopping at the grocery store, trips over a banana peel on the floor left by an unknown person, and breaks her arm in the resulting fall. If Donna sues the LLC,

Norwest Bank (Bank) has extended an open line of credit to the Able, Baker, and Campbell Partnership (Partnership) at an interest rate of 5.5%. Throughout the years, Partnership has used the credit line many times. In August of 2025, Partnership agreed to dissolve and published notice of dissolution in the newspaper, which no one at Bank saw. After the notice was published, Able decided he needed $150,000 to start his new business and used Partnership’s line of credit with Bank. Who is responsible to repay the loan?

Which of the following is an assumption that guides Groupthink?

Marley is a partner in the general partnership firm of West, Marley, and Smith. Marley owes his creditor, Ebenezer Jones, $219,000 under a court ordered judgment. In order to satisfy the judgment, Marley transfers his interest in the partnership to Ebenezer Jones. When Marley transferred his partnership interest to Ebenezer Jones, what did Marley transfer?

Ridgeline Manufacturing, Inc.’s board reviewed year-end financials showing total assets of $2.5 million and total liabilities of $2.3 million. Despite the controller’s warning that Ridgeline would likely be unable to make a $400,000 loan payment due in 60 days, the board declared and paid a $300,000 cash dividend to shareholders. Ridgeline defaulted on the loan two months later and was forced into bankruptcy. The bankruptcy trustee seeks to hold the directors personally liable for authorizing the dividend. Which statement best describes the directors’ potential liability?