Exam 32: Partnerships

Max,Jenny,and Craig are partners.They have purchased an elegant Victorian home and converted it into an office for their partnership.Craig decides to use the partnership's office to host some evening parties.Craig has a sideline business of arranging expensive gatherings and charging each person a handsome price to attend these "elite" parties.When Max and Jenny find out what Craig is doing,they demand that he pay them for the use of the property.How much money,if any,is Craig required to pay the partnership?

Kyle,Pedro,and Madeline form a partnership.There is no agreement as to the duration of the partnership.The partnership is a partnership at will.

Art and Alma made capital contributions of 60% and 40% respectively to their newly formed partnership,AA & Associates.They did not have a written partnership agreement.At the end of the first year,the partnership made a profit of which Alma now claims half.However,Art maintains he should receive 60%.Who is correct?

In Banker v.Estate of Banker the court held that

Larry and Reed are partners in Custom Pet Grooming.As they are both nearing retirement age,when they form their partnership,they agree they will end their business relationship and sell Custom Pet Grooming in three years.Larry and Reed have a

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?

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.

Astrid and Razi formed a partnership in which they agreed to share profits 60 percent to Astrid and 40 percent to Razi.Losses will be shared

Dennis and Claudia were partners who operated a retail store.They agreed to end the partnership.Dennis agreed to stay at the store and oversee the going-out-of-business sale.Claudia agreed to deal with the accountants and other matters not directly related to the hands-on operation of running the store.Claudia received notice that the store's liability policy would expire on July 1.She decided not to renew the policy and let it lapse.The going-out-of-business sale would not be completed until August 1.In July,a customer slipped and fell in the store.When Dennis learned that Claudia had allowed the liability policy to lapse,he was very upset and claimed he should not be liable for the customer's injury.Is Dennis liable to the customer? Explain.

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?

Without the approval of the other partners,a partner cannot sell his or her share.

Alicia and Ted have a written agreement wherein they will share the losses of their joint business.This agreement is strong evidence they are partners.

Elion was a partner in a partnership.Elion's death would be considered a wrongful dissociation.

Nancy was a partner of a small business.She could see that the business was beginning to fail and that it was very unlikely it would recover.Not wanting to lose her investment,she asked that the court require the partnership to dissolve since she did not have a legal right to withdraw at that time.Does a court have the authority to order a partnership to dissolve?

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?

Which of the following is a rightful dissociation?

Which of the following events occurs first with respect to the ending of a partnership?

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

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?

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.