Exam 32: Partnerships

Doyle contributed $10,000 when he became a general partner in the existing partnership of R & Z Heating.If Albert wins a judgment for $25,000 against R & Z on a claim that was incurred before Doyle became a partner,Doyle shares joint and several liability with his new partners for the whole obligation.

Ending a partnership involves which of the following three steps?

Belinda and Franco are partners in a jewelry business.Without Franco's knowledge,Belinda buys a ring from Janice for $2,200.Janice has no reason to question the transaction since she is a regular customer of the store and assumes Belinda has authority to buy her ring.When Franco finds out he is furious and does not want to honor the agreement.Which of the following is TRUE?

A partnership is liable for both the negligent and intentional acts of a partner if the acts were committed within the ordinary course of the partnership's business.

Common law plays an important role in regulating partnerships.

Anne and Mike were winding up their partnership.Mike was approached by a person who wanted the partnership to do some work for him.Mike agreed that the partnership would do the work.Generally speaking,in such a situation

Jack and Jill were living together.Jack wanted to start a small retail store,but did not have good credit.Jill,whose credit was excellent,signed loan agreements with Jack so he could borrow the money to start the business.Jack used business cards that stated he was the "owner" of the business.He and Jill filed separate tax returns.Jack stated he was self-employed and claimed the business was a sole proprietorship.The money that was earned from the store was placed into a joint checking account owned and used by Jack and Jill.When there were significant decisions to be made about the business,such as deciding to franchise the business,the decision was made jointly by Jack and Jill. Five years after the business was started,Jill left Jack.She claimed she was entitled to one-half the business's profits since she and Jack were partners.Jack disagreed and claimed they never had a partnership.Discuss Jill's claim.

Nicholas and Holly are partners in a toymaking shop.If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business,Rudolph must try to collect from the partnership before going after Nicholas' personal assets.

In Banker v the Estate of Bankerthe court held that

Sandy,Ramon,and Bonnie were partners.Sandy dissociated from the partnership.Bonnie and Ramon decided to continue the business.When Sandy dissociated,there was a $50,000 debt owed to Great State Bank.Which statement is correct?

Kayla and Marshall formed a partnership.Marshall incurred a debt in the ordinary course of the partnership business.If the debt is not paid,the creditor may sue:

The dissolution of a partnership means the same as its termination.

Theresa and Bobbi bought a racecar together.They agreed to share all expenses and split net profits equally.There was no agreement as to the duration of the partnership.After about a year,Bobbi decided she was tired of the racing business and left the partnership.Bobbi did not violate the partnership agreement.Theresa claims Bobbi's leaving was wrongful.Is Theresa correct?

At what stage are the partnership debts paid and the proceeds distributed to the partners?

Village Bank believed that Spencer and Nadia were partners in an e-business.Spencer and Nadia were not partners.Spencer owned the business as a sole proprietor.Nadia,however,was a close friend of Spencer.When Spencer visited Village Bank in an effort to obtain a $10,000 loan,Nadia went with him.During the conversation with the banker,Spencer referred to Nadia as "my partner." Village Bank made the business loan believing that Spencer and Nadia were partners.Spencer defaulted on the loan.Village Bank claims that both Spencer and Nadia are liable on the loan.Will Nadia be liable on the loan?

Jackie and Robert own an apartment building as partners.Cyndi,one of their tenants,gives Robert written notice she will be moving out at the end of the following month.Robert did not tell Jackie that Cyndi was moving.Has Cyndi properly given notice to the partnership?

Randy,Joan,and Arnie are partners.Their agreement did not address dissociation nor how long the partnership would last.Randy decided to leave the partnership.What happens when Randy serves notice he intends to withdraw?

In determining if a partnership exists,the courts will consider all of the following factors EXCEPT

When two parties incur the liability of a partnership without actually being partners,it is referred to as

Andy,Becky and Charlie formed a partnership.Their business was to create Web pages for students.They would take a person's academic and career information and make an attractive Web page.Andy supplied the computer and technical advice.Becky was the business manager.Charlie did the bulk of the marketing.Charlie and Becky became irritated with Andy,as it seemed they did more work than he did.Charlie and Becky decided to end their partnership with Andy.During the winding up process,how are the assets of the partnership paid out?