Exam 25: The Business Entity: an Introduction

Jackson,Thomas,and Susan are partners in an investment firm.There is a vote taken to sell government bonds owned by the partnership,with Thomas and Susan opposed and Jackson in favor.Jackson decides to sell the government bonds and the partnership loses $50,000.Discuss Jackson's liability to the partnership.

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Question 1

Correct Answer:

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The RUPA notes that partners have three critical duties: (1)loyalty, (2)obedience and (3)due care.The first of these three,the duty of loyalty,is based on the fact that the partners are in a fiduciary relationship.The duty of obedience,here violated by Jackson when he continued to sell bonds after being outvoted by his partners,means that Jackson will be liable for any loss that befalls the partnership as a result of that disobedience.

Under the UPA,partners are jointly and severally liable for damages resulting from breach of contract actions.

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(True/False)

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Question 2

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False

Alan and Baker are disappointed in the profitability of their A and B Partnership.They want to join their partnership with the X and Y Partnership.Is it possible for a partnership to be a partner?

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Question 3

Correct Answer:

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Under the UPA aggregate theory,a partnership exists as a unique individual person that is separate from the identities of the partners.

(True/False)

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Question 4

Striuli asks Sarducci to become a limited partner in Avionics Ltd. ,a limited partnership that will sell computer software.Both Striuli and Sarducci delay filing the certificate of limited partnership.If the limited partnership is sued before the certificate is filed,will Sarducci be named as a defendant? Explain.

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Question 5

The Titanic Partnership's loan from Big Bank is structured so that payments on the loan are made out of profits and the amounts of the payments vary according to profitability.Which of these best describes this arrangement?

(Multiple Choice)

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Question 6

Tangent Enterprises is a partnership consisting of Delen,Javid,and Kaya.Kaya leaves the partnership to do volunteer work in Africa.Discuss the legal status of Tangent Enterprises.

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Question 7

Under the UPA,a partner in a tenancy in partnership has all the following rights except:

(Multiple Choice)

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Question 8

The capital contributions of all partners are considered to be the property of the partnership.

(True/False)

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Question 9

Under the RUPA,partnerships at will are automatically dissolved when a partner dies or enters bankruptcy.

(True/False)

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Question 10

RUPA requires that a partnership agreement be in writing to be enforceable and binding on the partners.

(True/False)

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Question 11

A large machine is purchased by Vida and is sometimes used for her personal work and sometimes used for work by the partnership of which she is a member.Discuss what factors a court will consider in deciding if the machine is partnership property.

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Question 12

In a case involving the issue of whether a partnership actually existed,equal management is prima facie evidence.

(True/False)

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Question 13

In the Classic Case,The Liability Blues,PNC Bank v.Michael Farinacci,the main issue was whether the defendants be held jointly liable under the old law (UPA)or jointly and severally liable under the new law (RUPA).

(True/False)

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Question 14

Tina is a limited partner in Aon Enterprises,a limited partnership,while Mark is a general partner.Tina assumes management duties for three weeks,while Mark is recovering from heart surgery.Most likely,who or what has liability for partnership actions during this period?

(Multiple Choice)

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Question 15

Anita wants to go into business for herself,but does not know how to start.Discuss the best way for Anita to begin.

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Question 16

Arian is a sole proprietor and owes a number of business creditors.The business creditors may sue to:

(Multiple Choice)

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Question 17

Brylea is paid 10% of the net profits by Delta Partnership as compensation for her work for Delta.Delta ceases business,owing many creditors who attempt to collect from Brylea,asserting that Brylea is a partner.Discuss Brylea's partnership status and liability.

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Question 18

A partner's is her share of the plus any ,which is any remaining funds after dissolution.

(Multiple Choice)

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Question 19

Thomas invests $10,000 in the Thomas and Trudy partnership named Tremendous Enterprise.Thomas needs $2,000 for medical expenses and insists that he is entitled to withdraw that amount immediately from what he has invested.Trudy asserts that the $10,000 investment is partnership property.Under the RUPA,who owns the $10,000?

(Multiple Choice)

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Question 20

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Exam 25: The Business Entity: an Introduction

Under the UPA,partners are jointly and severally liable for damages resulting from breach of contract actions.

Alan and Baker are disappointed in the profitability of their A and B Partnership.They want to join their partnership with the X and Y Partnership.Is it possible for a partnership to be a partner?

Under the UPA aggregate theory,a partnership exists as a unique individual person that is separate from the identities of the partners.

The Titanic Partnership's loan from Big Bank is structured so that payments on the loan are made out of profits and the amounts of the payments vary according to profitability.Which of these best describes this arrangement?

Tangent Enterprises is a partnership consisting of Delen,Javid,and Kaya.Kaya leaves the partnership to do volunteer work in Africa.Discuss the legal status of Tangent Enterprises.

Under the UPA,a partner in a tenancy in partnership has all the following rights except:

The capital contributions of all partners are considered to be the property of the partnership.

Under the RUPA,partnerships at will are automatically dissolved when a partner dies or enters bankruptcy.

RUPA requires that a partnership agreement be in writing to be enforceable and binding on the partners.

A large machine is purchased by Vida and is sometimes used for her personal work and sometimes used for work by the partnership of which she is a member.Discuss what factors a court will consider in deciding if the machine is partnership property.

In a case involving the issue of whether a partnership actually existed,equal management is prima facie evidence.

In the Classic Case,The Liability Blues,PNC Bank v.Michael Farinacci,the main issue was whether the defendants be held jointly liable under the old law (UPA)or jointly and severally liable under the new law (RUPA).

Tina is a limited partner in Aon Enterprises,a limited partnership,while Mark is a general partner.Tina assumes management duties for three weeks,while Mark is recovering from heart surgery.Most likely,who or what has liability for partnership actions during this period?

Anita wants to go into business for herself,but does not know how to start.Discuss the best way for Anita to begin.

Arian is a sole proprietor and owes a number of business creditors.The business creditors may sue to:

Brylea is paid 10% of the net profits by Delta Partnership as compensation for her work for Delta.Delta ceases business,owing many creditors who attempt to collect from Brylea,asserting that Brylea is a partner.Discuss Brylea's partnership status and liability.

A partner's ________ is her share of the ________ plus any ________,which is any remaining funds after dissolution.

Ethics,social Responsibility,and the Law

Sources of the Law

The Judicial Process and Cyber-Procedure

Alternative Dispute Resolution and Cyber-Adr

Criminal Law and Cybercrimes

Tort Law and Cybertorts

The Essentials of Contract Law

Offer,acceptance,and Mutual Assent

Consideration and Cyber-Payments

Capacity and Legality: the Final Elements

Written Contracts and Cyber-Commerce

Third Parties,discharge,and Remedies

Sales Contracts: Formation,title,and Risk of Loss

Sales Contracts: Rights,duties,breach,and Warranties

Product Liability and Consumer Protection

The Nature of Negotiable Instruments

Holders in Due Course,defenses,and Liabilities

Bank-Depositor Relationships and Cyber-Banking

Insurance

Mortgages, land Contracts, and the 21st-Century Financial Crisis

Bankruptcy Law: in Theory, in History, and in Practice

Agency Law

Employment Law

Labor Law

The Corporate Entity

Managing the Corporate Entity

Government Regulation of the Corporate Entity

Personal Property and Bailments

Real Property and Landlord and Tenant Law

Wills, advanced Directives, and Trusts

Professional Liability

Science, technology, and Law in the 21st Century

International Law and the New World Order

Filters

A partner's is her share of the plus any ,which is any remaining funds after dissolution.