Exam 30: Formation and Internal Relations of General Partnerships

Anita is hired to manage an unincorporated dress boutique owned by Betty. The two agree that Anita will receive one-third of the net profits, which amount is to be paid to her on a monthly basis. a. Is Anita a partner? Explain. b. If the boutique has a loss instead of a profit, would Anita have to share the loss? Explain. There are three components essential to the existence of a partnership: an association of two or more persons, conducting a business for profit, which they co-own. Anita is not a partner since she does not have joint ownership of the

Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in order to be enforceable in the courts.

In all types of business entities, the owners can fully share in the management and control of the business.

White, Gray, and Greene enter into a contract to form a partnership, but the contract says nothing about the sharing of profits and losses. Which of the following will take place?

In which of the following situations would the persons be partners?

The newly formed Bright Partnership cannot commence business until it meets its state's required minimum amount of capitalization.

Identify which forms of business organization provide the owners with limited liability for the business's obligations and which forms of organization allow the owners to participate in the management and control of the business.

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

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

If no specific agreement exists, the partners bear losses in the same proportion in which they share profits.

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

Identify six rights the law provides to partners.

Under the RUPA, a partner must manage the partnership affairs without duty of care.

Arthur, Betty, and Clara each inherit an undivided one-third of an apartment complex. Instead of selling it, they decide to continue to operate it for the next few years as a sideline to their other occupations just to see if they can earn some extra money. What are they?

Marilyn, George, and Christine pool their money to buy land for a vegetable garden. They plan to sell the produce at a roadside stand that summer. Are they partners?

A partnership name may be the name of the partners or any one of them.

Which of the following would lack the capacity to become a partner?

Co-ownership of the means or instrumentality of accomplishing a single business transaction or a limited series of transactions ordinarily results in a:

In some corporations, only the shareholders are taxed; in others, both the corporation as an entity is taxed and the shareholders are taxed as well.

All states have authorized the formation of limited liability companies.