Exam 36: Partnerships and Limited Liability Partnerships

A limited partner who participates in the management of the partner?ship may be personally liable to the firm's creditors.

Jim and Kyle are partners in J&K Sales, which exports technical equip?ment under a three-year partnership agreement. The U.S. gov?ernment declares that the equipment can no longer be ex?ported. J&K

A general partner has the power to dissociate from a limited partnership regardless of what the partnership agreement specifies.

Clu, Dolf, and Elton do business as Fertile Valley Farm. Clu's relationship to the firm ends, but it continues to do business. This is

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

A general partner is personally liable for partnership debts if its as?sets are insufficient to pay its creditors.

International Exports, L.P., is a limited partnership, with $100,000 in de?clared but unpaid profits. International's creditors include Friendly Credit Corporation for $5,000 and Gwen, one of International's limited partners, also for $5,000. When Harry, one of International's general partners, de?cides to retire, the other general partners vote to liquidate and dissolve the firm. The limited partners, who are not asked their opinions, want Interna?tional to continue in business and file a suit against the general partners to compel this result. Can the court order International to continue? If not, what is the priority of the distribution of International's assets on its dissolution?

In a limited partnership, the liability of a limited partner is limited to the amount of capital he or she has invested in the partnership.

The extent of implied authority is generally broader for agents than for partners.

Ben, who runs a livestock breeding business, owes the Circle C Ranch $40,000. Ben agrees to pay the Circle C a percentage of his profits each month until the debt is paid. Because of this agreement, the Circle C is

Fact Pattern 36-1A Dean starts up E-Sites, an Internet service, and leases office space in a building owned by Fred. The lease requires Dean to pay Fred a base rental of $250, plus 10 percent of E-Sites' profits, each month. The term is two years. Dean hires Gina to work at E-Sites' tech support desk at an hourly wage of $9.00, plus a commis?sion of 10 percent of the prof?its. The term is also two years. -Refer to Fact Pattern 36-1A. Dean and Fred are

A partnership dissolves when a partner ceases to be as?sociated with the carrying on of partnership business.

Bo and Clancy decide to do business as Marketing & Promotion Services. To be a partnership, this association can result from an agreement that is

Erte, a partner in Fluoride Dental Associates, applies for a loan with Great State Bank allegedly on Fluoride's behalf but without the authorization of the other partners. Great State knows that Erte is not authorized to take out the loan. Erte's default on the loan results in

Grady and Hedy do business as Island Tours. For federal income tax purposes, Island Tours would be treated as

Rona and Stiv do business as Treasure Island Traders. In acting on the firm's behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in overestimating the profit. To her firm, Rona is

Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a lim?ited partner?ship. Connie dies. The partnership can

In winding up a limited partnership, non-partner creditors are paid be?fore the partners receive their capital contributions.

Venture Capital, LP, is a limited partnership. A Venture limited partner loses his or her limited liability if he or she

In a limited liability limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership.