Exam 37: All Forms of Partnerships

A limited liability partnership must be formed in compliance with state statutes.

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act

For two years after a partner dissociates from a continuing partnership, the partnership may be bound by the acts of the dissociated partner.

A partner always has the power to dissociate from the partnership.

Fact Pattern 37-1 Ann starts up Bowls Bistro to serve and sell soups and salads. Ann leases space in an office building owned by Carly. The lease requires a base rent of $1,250, plus 10 percent of Bowls Bistro's profits, each month. The term is two years. Ann hires Demi to take and fill customers' orders at an hourly wage of $15.00, plus tips. -Refer to Fact Pattern 37-1. Ann and Carly are

Craig, Donna, and Eve do business as Fast-Track Career Consultants. Eve's relationship to Fast-Track ends, but the firm continues to do business. This is

A partner may pursue his or her own interests without automatically violating the partner's fiduciary duties to the partnership and the other partners.

The death of a limited partner dissolves a limited partnership.

In a limited partnership, every partner has full responsibility for the partnership and for all its debts.

A partnership is forced to terminate every time a partner dissociates from the firm.

Colin, Debby, and Erin agree to be partners in Fajita Pizza, splitting the profits equally. Colin contributes 65 percent of the capital. When Fajita Pizza is dissolved, its liabilities are greater than its assets. The losses are paid by

Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions

A partner has a duty to devote time, skill and energy on behalf of the partnership business.

Dissociation normally entitles the partner to buy his or her interest from the partnership.

Darin is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Darin is liable for the debts

Under some circumstances a non-partner can be regarded as an agent whose acts are binding on the partnership.

A sharing of profits from a business creates a presumption that a partnership exists.

Some states have passed laws prohibiting the withdrawal of limited partners from a limited partnership.

A partner's profit from a partnership is taxed as income to the firm.

​Fact Pattern 37-3 Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 37-3. The partners decide to dissolve Equity Lending. Duke collects and distributes the firm's assets. This results in