Exam 30: Formation and Internal Relations of General Partnerships

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

A sole proprietorship is formed without any formality, is not a separate taxable entity, is dissolved upon death of the owner, and has unlimited liability for the owner.

A distribution in a partnership may be: 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.

General Widget partnership assets amount to $34,000 after liquidation. Frank, Gene, and Hank, equal partners, each contributed $3,000 into the capital pool at the inception of the business. Gene later loaned the business $5,000. They owe $23,000 to creditors for inventory. What will Gene get in distribution, assuming there is no agreement on the distribution of profits?

The UPA grants each partner the right to an account whenever:

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

Clark and David are partners. Clark has contributed $25,000. David has contributed only his time and skill. On dissolution, after all firm debts are paid, $20,000 in assets remains. Which of the following is NOT correct?

Under the common law, a partnership is generally considered to be a legal entity rather than an aggregate of individuals.

In deciding whether property owned by a partner before formation of the partnership and used in the business is a capital contribution that belongs to the firm, a court will consider which of the following?

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

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

The choice of the most appropriate form of business enterprise cannot be determined in a general way, but depends on the particular circumstances of the owners.

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.

Juan, a partner in the Bell Partnership, in violation of a specific term in the partnership agreement restricting the extension of credit of more than $5,000 without the written consent of all the partners, extends credit of $6,500 to Brittany. Juan has violated the duty of:

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?

What is considered "partnership property" is determined primarily by the partners' intentions.

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

A distinguishing characteristic of a business trust is that:

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

A joint venture is necessarily of short duration.