Exam 24: Sole Proprietorships and Partnerships

Partners are generally liable for the torts committed by another partner in the ordinary course of the business.Furthermore,each partner is jointly liable for the debts and obligations of the firm.A Limited Liability Partnership (LLP)limits a partner's liability as a result of the negligent acts or omissions of another partner.

Which of the following is NOT true about partnerships?

You are interested in creating a business and have a friend who is also interested in the same type of business,but you are not a professional and you feel that even the best of friends can have a falling out when they go into business together.Is there really any practical difference between considering a sole proprietorship and a partnership for your business?

Use the fact situation in Q6 to answer the related question that follows. The liability that arises in this case is based on the principle that

The court may upon an application by one or more partners order the partnership dissolved under which circumstance?

A partnership is a business relationship between two or more persons,but not all business relationships between two or more persons are partnerships.

What are the advantages of carrying on a business venture as a partnership rather than as a sole proprietorship?

Is a well-drafted,carefully thought-out partnership agreement a guarantee of a successful partnership? If not,what is?

What are two important factors in determining the type of partnership that parties may wish to enter into?

Lou,Pete,and Carl are all partners in a feed store business.Carl would like to retire but wants his son,Carl Jr. ,to take his place as partner.Is there any way Carl can have his son become a partner?

John and George have been talking about going into business together.John wants the business as an investment and has the money necessary to set it up,but wants no responsibility and little liability.On the other hand,George wants to run the business and is prepared to accept the liability that goes with it.In this case,the agreement that John and George will enter into to do business together is

Use the fact situation in Q8 to answer the related question that follows. Assume that the partnership is governed by a partnership agreement,which provides that on the retirement or bankruptcy of a partner,the partnership and firm continues.In such a case,on Albert's death,

Compared to a sole proprietorship,what are some disadvantages in carrying on business as a partnership?

Two years ago the Citizens Bank lent the Carlin & Hickel Partnership $2 million.Now the firm is defaulting on their monthly payments.Which of the following partners will be liable on this loan?

In Ontario,in the absence of a partnership agreement,the provisions of the Partnership Act apply to a general partnership.

Use this fact situation to answer the related questions that follow. Albert,John,George and Alice are partners in the accounting firm AGJM,but have no partnership agreement. In the event that Albert dies,

Mike,James,and Mary,advertising consultants,enter into a partnership and name it Sensational Adverts.About a year a year after the partnership is established,Mike and Mary have an argument and Mike tells the other partners that he will soon be leaving the partnership.A week later,Sensational Adverts is invited to submit a bid to produce an advert for a local beer company.Mike,who is the member of the partnership in charge of beer adverts,sees this as an opportunity to start his own business.Mike resigns from Sensational Adverts,starts his own company,and then submits a bid.Mike's bid is accepted.There is nothing legally wrong with Mike's conduct.

Which of the following is true about sole proprietorships?

For three years,John,Michael,and Mary have carried on a business that is charitable in nature.Each of them contributed capital to the business and has his or her duties set out in an agreement.The form of business that they have created is

A partnership agreement falls under the Statute of Frauds