Question 1

A __________ is an unincorporated business association consisting of at least one general partner and at least one limited partner.

Accepted Answer

A)  joint venture 
B)  limited liability company 
C)  limited liability partnership 
D)  limited partnership 
A)  joint venture 
B)  limited liability company 
C)  limited liability partnership 
D)  limited partnership

Question 2

No minimum amount of capitalization is necessary before a partnership may commence business.

Accepted Answer

A) True 
 B)False

Question 3

Any natural person having full capacity may enter a partnership.

Accepted Answer

A) True 
 B)False

Question 4

Landrum voluntarily assigns his transferable interest in a partnership to McClendon. This act does not by itself result in the dissolution of the partnership, nor does it result in McClendon's being entitled to participate in the management of the partnership business.

Accepted Answer

A) True 
 B)False

Question 5

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.

Accepted Answer

The basic features of a partnership agre

Question 6

General partners differ from limited partners only in the amount of input they have in partnership decisions.

Accepted Answer

A) True 
 B)False

Question 7

Sole proprietors have limited liability for the sole proprietorship's debts.

Accepted Answer

A) True 
 B)False

Question 8

The provisions of RUPA must be strictly followed in a partnership agreement.

Accepted Answer

A) True 
 B)False

Question 9

Alice and Brad enter into a partnership, which becomes insolvent, as does Brad. Alice is fully liable for the debts of the partnership.

Accepted Answer

A) True 
 B)False

Question 10

No person may become a member of a partnership without the consent of all the partners.

Accepted Answer

A) True 
 B)False

Question 11

"Partnership property" is the sum of the partnership's assets, including all property acquired by a partnership.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct with regard to partnership property?

Accepted Answer

A)  Like partnership capital, it is a fixed amount set forth in the articles of partnership. 
B)  Under the RUPA, there is a rebuttable presumption that unless a contrary intention appears, property acquired with partnership funds is partnership property. 
C)  The RUPA sets forth two irrebuttable presumptions that apply when the partners did not express their intent, one of which is that property acquired in the name of one of the partners without an indication of her capacity as a partner and without use of partnership funds is presumed to be that partner's separate property. 
D)  If there is no express agreement whether property owned by a partner before formation of the partnership and used in the partnership business is an asset of the partnership, the fact that taxes, liens, and expenses have been paid by the partnership is irrelevant. 
A)  Like partnership capital, it is a fixed amount set forth in the articles of partnership. 
B)  Under the RUPA, there is a rebuttable presumption that unless a contrary intention appears, property acquired with partnership funds is partnership property. 
C)  The RUPA sets forth two irrebuttable presumptions that apply when the partners did not express their intent, one of which is that property acquired in the name of one of the partners without an indication of her capacity as a partner and without use of partnership funds is presumed to be that partner's separate property. 
D)  If there is no express agreement whether property owned by a partner before formation of the partnership and used in the partnership business is an asset of the partnership, the fact that taxes, liens, and expenses have been paid by the partnership is irrelevant.

Question 13

Which of the following is the most convincing evidence of a partnership arrangement?

Accepted Answer

A)  Two or more persons are co-owners of property used in a business. 
B)  Two or more persons have a written agreement regarding a fundraiser for charity. 
C)  Two or more persons carry on a business for profit, but they have no formal agreement. 
D)  Two person share a joint savings account in which they deposit money and share the interest. 
A)  Two or more persons are co-owners of property used in a business. 
B)  Two or more persons have a written agreement regarding a fundraiser for charity. 
C)  Two or more persons carry on a business for profit, but they have no formal agreement. 
D)  Two person share a joint savings account in which they deposit money and share the interest.

Question 14

To be partnership property, title to real estate bought with partnership assets and used by the partnership may be put in the name of:

Accepted Answer

A)  any partner in that individual's name. 
B)  the partnership only. 
C)  the partnership in its name, or one or more partners in their capacity as partners in the partnership if the name of the partnership is indicated in the instrument transferring title. 
D)  the agent who represented the partnership in the transaction. 
A)  any partner in that individual's name. 
B)  the partnership only. 
C)  the partnership in its name, or one or more partners in their capacity as partners in the partnership if the name of the partnership is indicated in the instrument transferring title. 
D)  the agent who represented the partnership in the transaction.

Question 15

Ruben invested $40,000 in a partnership with Clark and Louis. Ruben's contract with the partnership states he will receive a portion of partnership profits, but he will be liable for partnership's debts only to the extent of the $40,000 he invested. Ruben is:

Accepted Answer

A)  a general partner. 
B)  a dormant partner. 
C)  a limited partner. 
D)  an aggregate partner. 
A)  a general partner. 
B)  a dormant partner. 
C)  a limited partner. 
D)  an aggregate partner.

Question 16

Owners of interests in businesses with unlimited liability place their entire estate at risk.

Accepted Answer

A) True 
 B)False

Question 17

Arthur, Betty, and Clara each inherit an undivided one-third interest in 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?

Accepted Answer

A)  A partnership. 
B)  Co-owners only. 
C)  A corporation. 
D)  Creditors of the apartment complex. 
A)  A partnership. 
B)  Co-owners only. 
C)  A corporation. 
D)  Creditors of the apartment complex.

Question 18

Michelle and Margaret agree to form a partnership called "Double M." The partnership contract between Michelle and Margaret must be in writing in order to be enforceable in the courts.

Accepted Answer

A) True 
 B)False

Question 19

Luke typically spends 50-55 hours per week working in the real estate partnership he co-owns with Spencer. Spencer only spends about 30 hours a week on partnership business. Under the RUPA:

Accepted Answer

A)  Luke would be entitled to payment from the partnership for the extra 20-25 hours per week he spends on partnership business unless a partnership agreement denies this right. 
B)  the partners cannot agree to deny extra payment for extra work by a partner. 
C)  unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the partnership, even if it is disproportionate to his partner's work. 
D)  Luke would be entitled to payment from the partnership only if the amount of time and effort he expends on partnership business is grossly disproportionate to that spent by his partner. 
A)  Luke would be entitled to payment from the partnership for the extra 20-25 hours per week he spends on partnership business unless a partnership agreement denies this right. 
B)  the partners cannot agree to deny extra payment for extra work by a partner. 
C)  unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the partnership, even if it is disproportionate to his partner's work. 
D)  Luke would be entitled to payment from the partnership only if the amount of time and effort he expends on partnership business is grossly disproportionate to that spent by his partner.

Question 20

Which of the following would be the most convincing evidence of a partnership?

Accepted Answer

A)  An agreement to share in the management of a business. 
B)  Agreements to share gross returns. 
C)  An agreement to share profits and losses. 
D)  An agreement to pay a firm manager a percentage of the profits for his salary. 
A)  An agreement to share in the management of a business. 
B)  Agreements to share gross returns. 
C)  An agreement to share profits and losses. 
D)  An agreement to pay a firm manager a percentage of the profits for his salary.

Exam 30: Formation and Internal Relations of General Partnerships

A __________ is an unincorporated business association consisting of at least one general partner and at least one limited partner.

No minimum amount of capitalization is necessary before a partnership may commence business.

Any natural person having full capacity may enter a partnership.

Landrum voluntarily assigns his transferable interest in a partnership to McClendon. This act does not by itself result in the dissolution of the partnership, nor does it result in McClendon's being entitled to participate in the management of the partnership business.

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.

General partners differ from limited partners only in the amount of input they have in partnership decisions.

Sole proprietors have limited liability for the sole proprietorship's debts.

The provisions of RUPA must be strictly followed in a partnership agreement.

Alice and Brad enter into a partnership, which becomes insolvent, as does Brad. Alice is fully liable for the debts of the partnership.

No person may become a member of a partnership without the consent of all the partners.

"Partnership property" is the sum of the partnership's assets, including all property acquired by a partnership.

Which of the following is correct with regard to partnership property?

Which of the following is the most convincing evidence of a partnership arrangement?

To be partnership property, title to real estate bought with partnership assets and used by the partnership may be put in the name of:

Ruben invested $40,000 in a partnership with Clark and Louis. Ruben's contract with the partnership states he will receive a portion of partnership profits, but he will be liable for partnership's debts only to the extent of the $40,000 he invested. Ruben is:

Owners of interests in businesses with unlimited liability place their entire estate at risk.

Arthur, Betty, and Clara each inherit an undivided one-third interest in 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?

Michelle and Margaret agree to form a partnership called "Double M." The partnership contract between Michelle and Margaret must be in writing in order to be enforceable in the courts.

Luke typically spends 50-55 hours per week working in the real estate partnership he co-owns with Spencer. Spencer only spends about 30 hours a week on partnership business. Under the RUPA:

Which of the following would be the most convincing evidence of a partnership?

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance Breach and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property Property Insurance Bailments and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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