Exam 3: All Forms of Partnerships

Fact Pattern 3-3 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 3-3.Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in

Fact Pattern 3-1 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 3-1.Ann and Carly are

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

In a limited partnership, a general partner's dissociation from the firm normally will lead to dissolution unless all partners agree to continue the business.

The intent to associate is irrelevant in terms of the elements of a partnership.

A third party can never sue one of the partners of a partnership without suing all members of the partnership.

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations

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

In a general partnership, the acts of one partner in the ordinary course of business can subject the other partners to personal liability.

If no fixed duration of the partnership is specified, the partnership is a partnership at will, which means that it cannot be dissolved.

Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a partner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?

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

Fact Pattern 3-2 Kristin and Lindsey are partners in Mobile Devise, an online marketing firm. -Refer to Fact Pattern 3-2.Lindsey dissociates from Mobile. Kristin signs a contract with Organic Olives, a food seller, apparently on Mobile's behalf. Organic Olives does not know of Lindsey's dissociation. The contract is binding on

Fact Pattern 3-3 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 3-3.Bryn, Cornell, and Duke decide to admit Giselle as a new partner in Equity Lending. Giselle's liability for partnership debts incurred before her admission is

A partner's devoting time, energy, and skill to partnership business is a compensable service.

Chet is a partner in Diligent Accounting Service. Chet can inspect Diligent's books and records

On dissolution, the creditors of the partnership and the creditors of the individual partners can make claims on the partnership's assets.

Emma is one of three partners in Fast Work, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to

Most states treat a partnership as an aggregate for most purposes.