27. In a business formation, profits and losses are "passed through" the business to each member: A. Public corporation B. Private corporation C. Sole proprietorship D. General partnership E. Limited liability corporation 28. A is a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur for a prescribed period of time:

Loren has invented a product that detects water leakages caused by broken pipes and sends out an alarm similar to a smoke alarm. However, Loren does not have sufficient finances to invest in this new product. Therefore, he borrows money from his friends to enter the market and begins to experience some success. The product is not patentable because it is too similar to other existing technologies. Major corporations have seen his success and have now entered the market with competing products. Define, in detail, what will be the probable destiny of Loren's company?

SECTION D Read the following extract and then answer the question belowA client is interested in setting up a business and does not know which form of business to use. He has been told that he can form a sole proprietorship, or partnership, or a limited liability company. He comes seeking for business advises on the advantages and disadvantages of a registered company. Make a comparison between a sole proprietorship, partnership, and a limited liability company.

homas Persson and Jon Nokes founded Smart Inventions, Inc., to market household consumer products. The success of their first product, the Smart Mop, continued with later products, which were sold through infomercials and other means. Persson and Nokes were the firm’s officers and equal shareholders. Persson was responsible for product development, and Nokes was in charge of day-to-day operations. In time, they became dissatisfied with each other’s efforts. Nokes represented the firm as financially “dying,” “in a grim state, . . . worse than ever,” and offered to buy all of Persson’s shares for $1.6 million. Persson accepted.On the day that they signed the agreement to transfer the shares, Smart Inventions began marketing a new product—the Tap Light. It was an instant success, generating millions of dollars in revenues. In negotiating with Persson, Nokes had intentionally kept the Tap Light a secret. Persson sued Smart Inventions, asserting fraud and other claims. Under what principle…