Question 1

A limited partnership must continuously maintain an office at which basic organizational and financial records are kept.

Accepted Answer

A) True 
 B)False

Question 2

Some statutes permit the operating agreement of a limited liability company to deny members the right to withdraw from the company.

Accepted Answer

A) True 
 B)False

Question 3

Members of member-managed LLCs and manager-managed LLCs are the same in which of the following aspects?

Accepted Answer

A)  Control. 
B)  Fiduciary duty. 
C)  Liability. 
D)  Whether the member is an agent of the LLC. 
A)  Control. 
B)  Fiduciary duty. 
C)  Liability. 
D)  Whether the member is an agent of the LLC.

Question 4

Only the general partners have access to the books and records of the partnership.

Accepted Answer

A) True 
 B)False

Question 5

An operating agreement is adopted by members of a limited liability company.

Accepted Answer

A) True 
 B)False

Question 6

Daniel is a general partner in a real estate investment firm. Hank and Barry are limited partners. Daniel, without the consent or ratification of Hank and Barry, can:

Accepted Answer

A)  admit another limited partner. 
B)  act as an agent of the partnership. 
C)  rename the partnership using Hank's last name. 
D)  not have almost exclusive managerial control of the business. 
A)  admit another limited partner. 
B)  act as an agent of the partnership. 
C)  rename the partnership using Hank's last name. 
D)  not have almost exclusive managerial control of the business.

Question 7

Limited partners have limited liability for partnership obligations.

Accepted Answer

A) True 
 B)False

Question 8

Members of an LLC share profits and losses equally.

Accepted Answer

A) True 
 B)False

Question 9

The RULPA specifies the events that will trigger a dissolution, after which the partnership affairs must be liquidated. These events include which of the following?

Accepted Answer

A)  The expiration of the time period specified in the certificate. 
B)  The unanimous written consent of all the partners. 
C)  A limited partner's withdrawal from the partnership. 
D)  The expiration of the time period specified in the certificate  and t he unanimous written consent of all the partners. 
A)  The expiration of the time period specified in the certificate. 
B)  The unanimous written consent of all the partners. 
C)  A limited partner's withdrawal from the partnership. 
D)  The expiration of the time period specified in the certificate  and t he unanimous written consent of all the partners.

Question 10

It remains unclear under the law whether a limited partner has a fiduciary duty to his general partners or to the limited partnership.

Accepted Answer

A) True 
 B)False

Question 11

If the written partnership agreement makes no provision for sharing profits and losses in a limited partnership, they are shared equally.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT true about a limited liability company?

Accepted Answer

A)  It is a noncorporate business organization. 
B)  In most states, an LLC must have at least two members. 
C)  It may elect not to be a separate taxable entity. 
D)  An ownership interest may be considered a security. 
A)  It is a noncorporate business organization. 
B)  In most states, an LLC must have at least two members. 
C)  It may elect not to be a separate taxable entity. 
D)  An ownership interest may be considered a security.

Question 13

The Elm Street Partnership is a limited partnership in which Arlo is the sole general partner and Barbara and Charles are the limited partners. Now the partnership is being dissolved, and Barbara wants her money. The partnership creditors include Charles, for a $1,000 loan, in addition to his capital contribution. In what order should the partnership assets be distributed?

Accepted Answer

The priorities for distribution of asset

Question 14

In Alzado v. Blinder, Robinson & Company, Inc. , Blinder, Robinson & Co. was found liable to partnership creditors as a general partner because it assumed control of the business and thus lost its limited partnership status.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is correct regarding the fiduciary duties in a limited partnership?

Accepted Answer

A)  The general partner has a fiduciary relationship to the limited partners, but not to any other general partners. 
B)  Judicial authority seems to suggest that the limited partner has no fiduciary duty to the partnership. 
C)  The fiduciary duty of the general partner has little effect upon the interests of the limited partners, because they have no ability to manage or control the partnership. 
D)  All of these are correct. 
A)  The general partner has a fiduciary relationship to the limited partners, but not to any other general partners. 
B)  Judicial authority seems to suggest that the limited partner has no fiduciary duty to the partnership. 
C)  The fiduciary duty of the general partner has little effect upon the interests of the limited partners, because they have no ability to manage or control the partnership. 
D)  All of these are correct.

Question 16

The majority of states have adopted the 2001 revision of the Revised Uniform Limited Partnership Act (ReRULPA), which reflects that LLPs and LLCs can meet many of the needs formerly met by limited partnerships.

Accepted Answer

A) True 
 B)False

Question 17

A __________ is a partnership in which the liability of the general partners has been limited to the same extent as in a limited liability partnership.

Accepted Answer

A)  limited partnership 
B)  limited liability company 
C)  limited liability limited partnership 
D)  None of these are correct. 
A)  limited partnership 
B)  limited liability company 
C)  limited liability limited partnership 
D)  None of these are correct.

Question 18

A general partnership that, by making the statutorily required filing, limits the liability of its partners for some or all of the partnership's obligations is known as a:

Accepted Answer

A)  limited liability partnership. 
B)  limited liability company. 
C)  limited liability limited partnership. 
D)  limited partnership. 
A)  limited liability partnership. 
B)  limited liability company. 
C)  limited liability limited partnership. 
D)  limited partnership.

Question 19

Unless otherwise agreed, under RULPA, a limited partner is entitled to repayment of his capital contribution under which of the following conditions?

Accepted Answer

A)  Before general partners are repaid their capital contribution. 
B)  The partnership's postdistribution assets would be sufficient to pay all of its liabilities to nonpartners. 
C)  Only after general partners have been repaid their capital contribution. 
D)  None of these. 
A)  Before general partners are repaid their capital contribution. 
B)  The partnership's postdistribution assets would be sufficient to pay all of its liabilities to nonpartners. 
C)  Only after general partners have been repaid their capital contribution. 
D)  None of these.

Question 20

The certificate of a limited partnership must be amended if a new general partner is admitted.

Accepted Answer

A) True 
 B)False

Exam 32: Limited Partnerships and Limited Liability Companies

A limited partnership must continuously maintain an office at which basic organizational and financial records are kept.

Some statutes permit the operating agreement of a limited liability company to deny members the right to withdraw from the company.

Members of member-managed LLCs and manager-managed LLCs are the same in which of the following aspects?

Only the general partners have access to the books and records of the partnership.

An operating agreement is adopted by members of a limited liability company.

Daniel is a general partner in a real estate investment firm. Hank and Barry are limited partners. Daniel, without the consent or ratification of Hank and Barry, can:

Limited partners have limited liability for partnership obligations.

Members of an LLC share profits and losses equally.

The RULPA specifies the events that will trigger a dissolution, after which the partnership affairs must be liquidated. These events include which of the following?

It remains unclear under the law whether a limited partner has a fiduciary duty to his general partners or to the limited partnership.

If the written partnership agreement makes no provision for sharing profits and losses in a limited partnership, they are shared equally.

Which of the following is NOT true about a limited liability company?

In Alzado v. Blinder, Robinson & Company, Inc. , Blinder, Robinson & Co. was found liable to partnership creditors as a general partner because it assumed control of the business and thus lost its limited partnership status.

Which of the following is correct regarding the fiduciary duties in a limited partnership?

The majority of states have adopted the 2001 revision of the Revised Uniform Limited Partnership Act (ReRULPA), which reflects that LLPs and LLCs can meet many of the needs formerly met by limited partnerships.

A __________ is a partnership in which the liability of the general partners has been limited to the same extent as in a limited liability partnership.

A general partnership that, by making the statutorily required filing, limits the liability of its partners for some or all of the partnership's obligations is known as a:

Unless otherwise agreed, under RULPA, a limited partner is entitled to repayment of his capital contribution under which of the following conditions?

The certificate of a limited partnership must be amended if a new general partner is admitted.

Introduction to Law

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