Question 1

Which of the following is NOT an advantage of a partnership?

Accepted Answer

A)  Partners' income taxes may be less than the income taxes would be on a corporation. 
B)  Each partner has limited liability. 
C)  It is possible to bring together more managerial skills than in a sole proprietorship. 
D)  It is possible to bring together more capital than in a sole proprietorship. 
A)  Partners' income taxes may be less than the income taxes would be on a corporation. 
B)  Each partner has limited liability. 
C)  It is possible to bring together more managerial skills than in a sole proprietorship. 
D)  It is possible to bring together more capital than in a sole proprietorship. B

Question 2

What is an assumed name statute? Why have many states adopted such statutes?

Accepted Answer

An assumed or fictitious name statute applies to businesses that operate under a fictitious or assumed name.Such a statute provides that a certificate must be filed with the state showing the names and addresses of the partners that make up a partnership and what name the partnership assumes.Many states have this statute so that interested parties,customers,creditors,etc.can find out the names of the partners.

Question 3

Under the RUPA,a loan from a partner to the partnership is treated the same as loans of a person not a partner,subject to:

Accepted Answer

A)  fraudulent transfer law. 
B)  the law of avoidable preferences under the Bankruptcy Act. 
C)  general debtor-creditor law. 
D)  All of these. 
A)  fraudulent transfer law. 
B)  the law of avoidable preferences under the Bankruptcy Act. 
C)  general debtor-creditor law. 
D)  All of these. D

Question 4

The Oak Grove Partnership decided it would buy personal computers for use by each partner.Unknown to the other partners,Cromwell,a partner,had an ownership interest in a computer store and thought he could get the computers for the partnership at the best price because of his inside position.He did,in fact,obtain eight computers at only $150 above the manufacturer's price,which was $250 less than the next lowest bid for each computer.What consequence?

Accepted Answer

A)  Because Cromwell did not tell his partners of his inside position with the computer store,there will be no sale. 
B)  Since Cromwell obtained the lowest price available,the deal will go through. 
C)  Cromwell will have to give his part of the sales profits to the partnership. 
D)  Cromwell will have to rescind the contract and go with the next highest bidder. 
A)  Because Cromwell did not tell his partners of his inside position with the computer store,there will be no sale. 
B)  Since Cromwell obtained the lowest price available,the deal will go through. 
C)  Cromwell will have to give his part of the sales profits to the partnership. 
D)  Cromwell will have to rescind the contract and go with the next highest bidder.

Question 5

The proportion in which partners bear losses depends upon their relative capital contributions.

Accepted Answer

A) True 
 B)False

Question 6

The principal legal duties imposed upon partners in their relations with one another include:

Accepted Answer

A)  the fiduciary duty or the duty of loyalty. 
B)  the duty to compensate other partners for their time and efforts spent on partnership business. 
C)  a duty to devote full time and expertise to the partnership. 
D)  a duty to vote for candidates that will help the business. 
A)  the fiduciary duty or the duty of loyalty. 
B)  the duty to compensate other partners for their time and efforts spent on partnership business. 
C)  a duty to devote full time and expertise to the partnership. 
D)  a duty to vote for candidates that will help the business.

Question 7

Partners may elect to have the partnership not be a separate taxable entity,so that only the partners are taxed.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not true regarding a partnership name?

Accepted Answer

A)  The name selected may not be the same as or deceptively similar to the name of any other existing business. 
B)  It may be a fictitious name. 
C)  It may not be likely to indicate to the public that it is a corporation. 
D)  It may not be the name of any one of the partners. 
A)  The name selected may not be the same as or deceptively similar to the name of any other existing business. 
B)  It may be a fictitious name. 
C)  It may not be likely to indicate to the public that it is a corporation. 
D)  It may not be the name of any one of the partners.

Question 9

Discuss the concept of "partnership property." What is the controlling factor in whether property belongs to the partnership or to one or more of the partners individually?

Accepted Answer

"Partnership property" is that which is

Question 10

The form of business association known as a partnership can be traced to ancient Babylonia and classical Greece and was used in England during the Middle Ages.

Accepted Answer

A) True 
 B)False

Question 11

In which of the following situations will the inference of the existence of a partnership be drawn from the receipt of profits of a business?

Accepted Answer

A)  Where payments of a debt are made to a creditor in installments from the profits of the partnership 
B)  Where wages are paid to an employee who is not also an owner 
C)  Where an annuity is paid to the widow of a deceased partner from partnership profits 
D)  Neither the creditor,the employee,nor the widow in these situations will be considered a partner under the guidelines in the RUPA. 
A)  Where payments of a debt are made to a creditor in installments from the profits of the partnership 
B)  Where wages are paid to an employee who is not also an owner 
C)  Where an annuity is paid to the widow of a deceased partner from partnership profits 
D)  Neither the creditor,the employee,nor the widow in these situations will be considered a partner under the guidelines in the RUPA.

Question 12

A distribution in a partnership may be:

Accepted Answer

A)  a payment made to compensate a partner for services rendered to the partnership. 
B)  a division of profits. 
C)  repayment of a loan to a partner. 
D)  All of these are types of distributions in partnerships. 
A)  a payment made to compensate a partner for services rendered to the partnership. 
B)  a division of profits. 
C)  repayment of a loan to a partner. 
D)  All of these are types of distributions in partnerships.

Question 13

A corporation may not be a partner in a partnership.

Accepted Answer

A) True 
 B)False

Question 14

Assume that you and your best friend have decided to form a partnership after graduation.You have both studied business law,so you both know the importance of having a written partnership agreement.Summarize the clauses that you would include in your partnership agreement.

Accepted Answer

The form should be pursuant to the laws

Question 15

Which of the following expresses the right one has to choose her partners?

Accepted Answer

A)  Partnership by estoppel 
B)  Delectus personae 
C)  Entity theory 
D)  Fiduciary relationship 
A)  Partnership by estoppel 
B)  Delectus personae 
C)  Entity theory 
D)  Fiduciary relationship

Question 16

A distinguishing characteristic of a business trust is that:

Accepted Answer

A)  the trust estate is devoted to the conduct of a business. 
B)  each beneficiary must have the consent of all the other beneficiaries in order to sell or transfer his interest in the trust. 
C)  the trustees and beneficiaries share the functions of management and control. 
D)  the trust can be established with no formality. 
A)  the trust estate is devoted to the conduct of a business. 
B)  each beneficiary must have the consent of all the other beneficiaries in order to sell or transfer his interest in the trust. 
C)  the trustees and beneficiaries share the functions of management and control. 
D)  the trust can be established with no formality.

Question 17

A partner who has no right to participate in control of the business and who has limited liability is a:

Accepted Answer

A)  general partner. 
B)  nominal partner. 
C)  secret partner. 
D)  limited partner. 
A)  general partner. 
B)  nominal partner. 
C)  secret partner. 
D)  limited partner.

Question 18

The RUPA treats a partnership as a legal entity in all but which of the following respects?

Accepted Answer

A)  Title to partnership property 
B)  Continuity of existence 
C)  Legal actions by and against the partnership 
D)  Unlimited liability for partnership obligations 
A)  Title to partnership property 
B)  Continuity of existence 
C)  Legal actions by and against the partnership 
D)  Unlimited liability for partnership obligations

Question 19

A judicial lien against a partner's transferable interest in a partnership is known as a(n):

Accepted Answer

A)  legal aggregate. 
B)  delegation of assets. 
C)  charging order. 
D)  assignment. 
A)  legal aggregate. 
B)  delegation of assets. 
C)  charging order. 
D)  assignment.

Question 20

Under the RUPA,no person may become a member of a partnership without the consent of all the partners.

Accepted Answer

A) True 
 B)False

Exam 30: Formation and Internal Relations of General Partnerships

Which of the following is NOT an advantage of a partnership?

What is an assumed name statute? Why have many states adopted such statutes?

Under the RUPA,a loan from a partner to the partnership is treated the same as loans of a person not a partner,subject to:

The proportion in which partners bear losses depends upon their relative capital contributions.

The principal legal duties imposed upon partners in their relations with one another include:

Partners may elect to have the partnership not be a separate taxable entity,so that only the partners are taxed.

Which of the following is not true regarding a partnership name?

Discuss the concept of "partnership property." What is the controlling factor in whether property belongs to the partnership or to one or more of the partners individually?

The form of business association known as a partnership can be traced to ancient Babylonia and classical Greece and was used in England during the Middle Ages.

In which of the following situations will the inference of the existence of a partnership be drawn from the receipt of profits of a business?

A distribution in a partnership may be:

A corporation may not be a partner in a partnership.

Assume that you and your best friend have decided to form a partnership after graduation.You have both studied business law,so you both know the importance of having a written partnership agreement.Summarize the clauses that you would include in your partnership agreement.

Which of the following expresses the right one has to choose her partners?

A distinguishing characteristic of a business trust is that:

A partner who has no right to participate in control of the business and who has limited liability is a:

The RUPA treats a partnership as a legal entity in all but which of the following respects?

A judicial lien against a partner's transferable interest in a partnership is known as a(n):

Under the RUPA,no person may become a member of a partnership without the consent of all the partners.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms

Legal Topics in Property Ownership and Management