Question 1

A person cannot be forced to be a partner; however,a partner can be forced by the partnership to accept another person as a partner.

Accepted Answer

A) True 
 B)False

Question 2

A sole proprietor bears the risk of loss of the business.

Accepted Answer

A) True 
 B)False

Question 3

A limited partner who permits his or her name to be used as part of the partnership name automatically becomes liable as a general partner.

Accepted Answer

A) True 
 B)False

Question 4

If the sole general partner has withdrawn from the partnership and dissolution has occurred,the courts must handle the "winding up" of the partnership affairs.

Accepted Answer

A) True 
 B)False

Question 5

In the absence of an agreement to the contrary,partners have equal rights to manage a partnership,regardless of the size of their capital investment.

Accepted Answer

A) True 
 B)False

Question 6

The duration of a general or limited partnership must be for a fixed term.

Accepted Answer

A) True 
 B)False

Question 7

Which types of partners in a limited partnership should participate in management?

Accepted Answer

A)  general partners 
B)  limited partners 
C)  general partners and limited partners 
D)  general partners only, unless there are no general partners, in which case limited partners may participate in management. 
E)  limited partners only, unless there are no general partners, in which case general partners may participate in management. 
A)  general partners 
B)  limited partners 
C)  general partners and limited partners 
D)  general partners only, unless there are no general partners, in which case limited partners may participate in management. 
E)  limited partners only, unless there are no general partners, in which case general partners may participate in management.

Question 8

Every state has adopted the Uniform Partnership Act.

Accepted Answer

A) True 
 B)False

Question 9

A written agreement between partners is called:

Accepted Answer

A)  a general partnership agreement. 
B)  articles of general partnership. 
C)  articles of partnership. 
D)  a general partnership compendium. 
E)  a general partnership agreement, articles of general partnership, or articles of partnership. 
A)  a general partnership agreement. 
B)  articles of general partnership. 
C)  articles of partnership. 
D)  a general partnership compendium. 
E)  a general partnership agreement, articles of general partnership, or articles of partnership.

Question 10

One disadvantage of a sole proprietorship is that the sole proprietor is legally responsible for torts his or her employees commit in the course of employment.

Accepted Answer

A) True 
 B)False

Question 11

If a partnership agreement specifies how losses are to be divided,but is silent with respect to the division of profits,the profits are to be divided in the same manner as losses.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a consequence of defective formation of a limited partnership?

Accepted Answer

A)  Contracts entered into by the partnership will be void. 
B)  Contracts entered into by the partnership will be voidable by the other party. 
C)  The rights between the partners will be different as a result of the defective formation. 
D)  A partner who would have otherwise enjoyed limited partner status might have unlimited liability to a third party who conducted business with the partner, while holding a "good faith" belief that the partner was a general partner. 
E)  A partner who would have otherwise enjoyed limited partner status will have unlimited liability to all third parties who conduct business with the partnership during the time period affected by the defective formation. 
A)  Contracts entered into by the partnership will be void. 
B)  Contracts entered into by the partnership will be voidable by the other party. 
C)  The rights between the partners will be different as a result of the defective formation. 
D)  A partner who would have otherwise enjoyed limited partner status might have unlimited liability to a third party who conducted business with the partner, while holding a "good faith" belief that the partner was a general partner. 
E)  A partner who would have otherwise enjoyed limited partner status will have unlimited liability to all third parties who conduct business with the partnership during the time period affected by the defective formation.

Question 13

When a partner dies,that partner's share of the partnership assets may be left to his or her heirs or next of kin.

Accepted Answer

A) True 
 B)False

Question 14

A partner has the power to dissolve a partnership,but only if the partnership specifically gives the partner this power.

Accepted Answer

A) True 
 B)False

Question 15

The duty of ________ requires general partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.

Accepted Answer

A)  subservience 
B)  indemnification 
C)  due care 
D)  adherence 
E)  obedience 
A)  subservience 
B)  indemnification 
C)  due care 
D)  adherence 
E)  obedience

Question 16

General partners are personally liable for the debts and obligations of the partnership.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding a partnership is true?

Accepted Answer

A)  A partnership is an involuntary association. 
B)  To be valid, a partnership must have a written partnership agreement. 
C)  A partnership is a separate tax-paying entity for federal tax purposes. 
D)  Partners in a partnership have personal liability much like that of sole proprietors, in the sense that partners and sole proprietors have personal liability for business debts and other legal obligations of the business. 
E)  All of the partners in a partnership have limited liability. 
A)  A partnership is an involuntary association. 
B)  To be valid, a partnership must have a written partnership agreement. 
C)  A partnership is a separate tax-paying entity for federal tax purposes. 
D)  Partners in a partnership have personal liability much like that of sole proprietors, in the sense that partners and sole proprietors have personal liability for business debts and other legal obligations of the business. 
E)  All of the partners in a partnership have limited liability.

Question 18

Any person,including natural persons,partnerships,limited partnerships,trusts,estates,associations,and corporations,may be a general or limited partner.

Accepted Answer

A) True 
 B)False

Question 19

In a limited liability partnership,there is no tax paid at the partnership level,and all profits and losses are reported on the individual partner's income tax return.

Accepted Answer

A) True 
 B)False

Question 20

Once a partnership is dissolved,all liability for the actions of the partners ends.

Accepted Answer

A) True 
 B)False

Exam 26: Small Business, Entrepreneurship, and Partnerships

A person cannot be forced to be a partner; however,a partner can be forced by the partnership to accept another person as a partner.

A sole proprietor bears the risk of loss of the business.

A limited partner who permits his or her name to be used as part of the partnership name automatically becomes liable as a general partner.

If the sole general partner has withdrawn from the partnership and dissolution has occurred,the courts must handle the "winding up" of the partnership affairs.

In the absence of an agreement to the contrary,partners have equal rights to manage a partnership,regardless of the size of their capital investment.

The duration of a general or limited partnership must be for a fixed term.

Which types of partners in a limited partnership should participate in management?

Every state has adopted the Uniform Partnership Act.

A written agreement between partners is called:

One disadvantage of a sole proprietorship is that the sole proprietor is legally responsible for torts his or her employees commit in the course of employment.

If a partnership agreement specifies how losses are to be divided,but is silent with respect to the division of profits,the profits are to be divided in the same manner as losses.

Which of the following is a consequence of defective formation of a limited partnership?

When a partner dies,that partner's share of the partnership assets may be left to his or her heirs or next of kin.

A partner has the power to dissolve a partnership,but only if the partnership specifically gives the partner this power.

The duty of ________ requires general partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.

General partners are personally liable for the debts and obligations of the partnership.

Which of the following statements regarding a partnership is true?

Any person,including natural persons,partnerships,limited partnerships,trusts,estates,associations,and corporations,may be a general or limited partner.

In a limited liability partnership,there is no tax paid at the partnership level,and all profits and losses are reported on the individual partner's income tax return.

Once a partnership is dissolved,all liability for the actions of the partners ends.

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Investor Protection,E-Securities Transactions,and Wall Street Reform

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

Filters