Exam 37: Partnerships and Limited Liability Partnerships

Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid by

Vasili is considering forms of business organization for Vasili's Designs, an architectural firm. An advantage of a limited liability partnership is that partners may be able to avoid personal liability for

Fern and Gray want to form a limited partnership to manage two restaurants: Café Latte and Deli Delite. In most states, a limited partnership will be created when

Energy Unlimited, LP, is a limited partnership to which its partners, including Fink, have contributed capital. Energy's creditors include Graves Engineering, Inc. On Energy's dissolution, its assets will be distributed to pay

In a general partnership, the partners are personally liable for the debts of the partnership.

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

Megan and Nicole do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Company, Megan fails to account for the profit. To her firm, Megan is

Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is

A partner who pursues his or her own interests automatically violates the partner's fiduciary duties to the partnership.

Fact Pattern 37-2A (Questions A9–A10 apply) Luann and Mace are partners in Networx, a computer peripherals firm. -Refer to Fact Pattern 37-2A. Mace dissociates from Networx. Luann signs a contract with Physik Drives, a wholesale component supplier, apparently on Networx's behalf. Physik does not know of Mace's dissociation. The contract is binding on

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.

A limited liability partnership allows its partners to avoid personal liability for the malpractice of other partners.

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

The Uniform Partnership Act governs the operation of partnerships.

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

Rona and Savannah 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

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property. Their partnership agreement is legally binding

An association cannot be a partnership without an express agreement.

Federal law permits a partnership to be treated as an entity in suits in federal courts.

Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed by the Uniform Partnership Act