Question 1

Describe the rights and general duties of partners in a partnership.

Accepted Answer

A partner has a right to compensation as the partner's share of profits. This is true even if one partner spends much more time than another on partnership business. A partner owes a duty of loyalty and good faith to the partnership. This means that partners have a duty to exercise reasonable care and skill in transacting business for the partnership, a duty to inform other partners of all information coming to them that may be important to the operation of the partnership, and a duty to account for any expenditure of partnership funds they make.

Question 2

Acme Chemical Partnership discharges a pollutant prohibited by an agency that aims to protect the environment. In this case, _____.

Accepted Answer

A)  the firm is liable for the resulting fines 
B)  only the general partners are liable if the firm has inadequate assets 
C)  only the partner who ordered the discharge is liable 
D)  all the partners should be imprisoned as discharging pollutants is a crime 
A)  the firm is liable for the resulting fines 
B)  only the general partners are liable if the firm has inadequate assets 
C)  only the partner who ordered the discharge is liable 
D)  all the partners should be imprisoned as discharging pollutants is a crime A

Question 3

The doctrine of res ipsa loquitur imposes liability on the partnership for torts committed by any partner or employee of the firm while engaged in partnership business.

Accepted Answer

A) True 
 B)False  False

Question 4

When continuing partners agree to relieve the withdrawing partners of liability on the debts of the old partnership, the act of novation can take place, which involves an agreement by the creditor:

Accepted Answer

A)  with both the withdrawing partners and the continuing partners. 
B)  with the withdrawing partners themselves and not their representatives. 
C)  only with the continuing partners. 
D)  with the new partners replacing the withdrawing partners to hold them liable for the debts. 
A)  with both the withdrawing partners and the continuing partners. 
B)  with the withdrawing partners themselves and not their representatives. 
C)  only with the continuing partners. 
D)  with the new partners replacing the withdrawing partners to hold them liable for the debts.

Question 5

Under the Revised Uniform Partnership Act (RUPA), when a partnership that has suffered losses winds up, _____.

Accepted Answer

A)  all partners are paid in full before outside creditors who loaned money are given anything 
B)  all partnership creditors are paid first 
C)  all partnership creditors are paid even when all the partners' capital accounts are negative 
D)  the partners who have negative capital accounts are not required by law to contribute to the partnership the amount of the deficiency 
A)  all partners are paid in full before outside creditors who loaned money are given anything 
B)  all partnership creditors are paid first 
C)  all partnership creditors are paid even when all the partners' capital accounts are negative 
D)  the partners who have negative capital accounts are not required by law to contribute to the partnership the amount of the deficiency

Question 6

Zach, Khalid, and Ira form a partnership. Zach's capital contribution to the firm is $5,000, while Khalid and Ira contribute $10,000 each. The parties do not make any express agreement concerning how profits are to be divided. However, they agree to share losses as follows: Zach, 40%, Khalid and Ira, 30% each. During the first year of the partnership, the business makes a profit of $30,000. Given this scenario, what will be Zach's share of the profit?

Accepted Answer

A)  $5,000 
B)  $9,000 
C)  $10,000 
D)  $12,000 
A)  $5,000 
B)  $9,000 
C)  $10,000 
D)  $12,000

Question 7

A partner is not ordinarily entitled to salary or wages.

Accepted Answer

A) True 
 B)False

Question 8

Explain what is meant by dissociation of a partnership.

Accepted Answer

The Revised Uniform Partnership Act (RUP

Question 9

A court may find two persons to be partners even though neither had the specific intent to create a partnership.

Accepted Answer

A) True 
 B)False

Question 10

The partners' rights in partnership entitle them to:

Accepted Answer

A)  sell any item of the firm's property if its value does not exceed their share of the assets of the partnership. 
B)  take possession of any item of partnership property for partnership purposes only. 
C)  take possession of any item of partnership property for personal purposes if its value does not exceed their share of the assets of the partnership. 
D)  devise to an heir any individual item of the firm's property. 
A)  sell any item of the firm's property if its value does not exceed their share of the assets of the partnership. 
B)  take possession of any item of partnership property for partnership purposes only. 
C)  take possession of any item of partnership property for personal purposes if its value does not exceed their share of the assets of the partnership. 
D)  devise to an heir any individual item of the firm's property.

Question 11

A partnership is a:

Accepted Answer

A)  limited association in which parties sign a contract expressing their intent to form the partnership. 
B)  voluntary and consensual association involving two or more persons. 
C)  voluntary association formed by an express agreement. 
D)  consensual association that requires the property used in the business be owned by it. 
A)  limited association in which parties sign a contract expressing their intent to form the partnership. 
B)  voluntary and consensual association involving two or more persons. 
C)  voluntary association formed by an express agreement. 
D)  consensual association that requires the property used in the business be owned by it.

Question 12

Limited partnerships have one or more general partners and one or more limited partners.

Accepted Answer

A) True 
 B)False

Question 13

What is a limited liability limited partnership (LLLP)?

Accepted Answer

Some individuals, when forming their bus

Question 14

Describe limited partnerships.

Accepted Answer

Limited partnerships are intended to per

Question 15

If a partner assigns his or her partnership interest to a creditor, the creditor is entitled to:

Accepted Answer

A)  receive that partner's share of the profits. 
B)  any information about partnership interests. 
C)  look at the partnership's books. 
D)  obtain a charging order against the other partners. 
A)  receive that partner's share of the profits. 
B)  any information about partnership interests. 
C)  look at the partnership's books. 
D)  obtain a charging order against the other partners.

Question 16

The Revised Uniform Partnership Act (RUPA) describes a partnership as an association of two or more persons to carry on as co-owners of a business for profit.

Accepted Answer

A) True 
 B)False

Question 17

Management of a limited partnership business is in the hands of the limited partner or partners.

Accepted Answer

A) True 
 B)False

Question 18

A partner who wrongfully dissociates:

Accepted Answer

A)  loses the right to demand a dissolution. 
B)  can participate in the winding up process. 
C)  must not be paid the value of his interest for the breach, if the firm continues. 
D)  can ask the court to appoint a receiver on his behalf. 
A)  loses the right to demand a dissolution. 
B)  can participate in the winding up process. 
C)  must not be paid the value of his interest for the breach, if the firm continues. 
D)  can ask the court to appoint a receiver on his behalf.

Question 19

Which of the following is an element of a joint venture?

Accepted Answer

A)  A measure of proprietorship of joint control of the enterprise 
B)  An express or implied agreement to carry on a continuing business 
C)  A manifestation of intent by one of the parties to be associated as a joint venture 
D)  A joint interest as reflected in the contribution of skill by at least one party to the joint venture 
A)  A measure of proprietorship of joint control of the enterprise 
B)  An express or implied agreement to carry on a continuing business 
C)  A manifestation of intent by one of the parties to be associated as a joint venture 
D)  A joint interest as reflected in the contribution of skill by at least one party to the joint venture

Question 20

Under the Revised Uniform Partnership Act (RUPA), when a partner dies, the surviving partners:

Accepted Answer

A)  cannot continue the business. 
B)  are entitled to compensation for winding up the partnership business. 
C)  must accept the deceased partner's heir as a full partner. 
D)  are relieved from personal liability on partnership debts. 
A)  cannot continue the business. 
B)  are entitled to compensation for winding up the partnership business. 
C)  must accept the deceased partner's heir as a full partner. 
D)  are relieved from personal liability on partnership debts.

Exam 27: Partnerships

Describe the rights and general duties of partners in a partnership.

Acme Chemical Partnership discharges a pollutant prohibited by an agency that aims to protect the environment. In this case, _____.

The doctrine of res ipsa loquitur imposes liability on the partnership for torts committed by any partner or employee of the firm while engaged in partnership business.

When continuing partners agree to relieve the withdrawing partners of liability on the debts of the old partnership, the act of novation can take place, which involves an agreement by the creditor:

Under the Revised Uniform Partnership Act (RUPA), when a partnership that has suffered losses winds up, _____.

A partner is not ordinarily entitled to salary or wages.

Explain what is meant by dissociation of a partnership.

A court may find two persons to be partners even though neither had the specific intent to create a partnership.

The partners' rights in partnership entitle them to:

A partnership is a:

Limited partnerships have one or more general partners and one or more limited partners.

What is a limited liability limited partnership (LLLP)?

Describe limited partnerships.

If a partner assigns his or her partnership interest to a creditor, the creditor is entitled to:

The Revised Uniform Partnership Act (RUPA) describes a partnership as an association of two or more persons to carry on as co-owners of a business for profit.

Management of a limited partnership business is in the hands of the limited partner or partners.

A partner who wrongfully dissociates:

Which of the following is an element of a joint venture?

Under the Revised Uniform Partnership Act (RUPA), when a partner dies, the surviving partners:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Property

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remedies

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

The Agency Relationship-Creation, Duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws

Which Form of Business Organization

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountants

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers

Introduction to Security

Security Interests in Personal Property

Bankruptcy

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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