Exam 31: Operation and Dissolution of General Partnerships

Maria is admitted as a partner to the existing Greene Ridge Partnership in June of 2010. Unless she signs an agreement to the contrary, she will be personally liable on all partnership obligations, including one incurred in December of 2009.

Under the UPA, in order to avoid liability, only constructive notice of a dissolution is required to be given to third parties who had no knowledge of the partnership before its dissolution.

Under the UPA, any suit in contract against the partners must name all of them as defendants.

Where a partner acts without either actual or apparent authority, the partnership:

A partner's receipt of notification of a fact relating to the partnership is not effective against the other partners until the receiving partner enters the relevant fact on the minutes at the next business meeting of the partnership.

Distinguish a dissociation from a dissolution. Explain the effect of each.

Under the UPA, upon dissolution of a partnership, apparent authority terminates although actual authority generally continues.

If a partnership is a debtor under the Bankruptcy Code and partnership property is insufficient to pay all the claims against the partnership, the trustee in bankruptcy must first seek recovery of the deficiency from the estates of the bankrupt partners, and then may seek recovery from general partners who are not bankrupt.

Which of the following is true regarding an insolvent partnership under the UPA?

The best and most reliable tool for preserving a partnership business after dissolution is through a continuation agreement.

Under the RUPA, a partner's duty not to compete terminates upon dissociation, and the dissociated partner may immediately engage in a competitive business without further consent.

Under the UPA, in what circumstances do the remaining partners after dissolution have the right to continue the partnership?

The process of liquidation of a partnership is also known as "winding up."

Under the UPA, after all the partnership's creditors have been paid, each partner is entitled to repayment of his capital contribution upon termination of the firm.

Under the UPA, dissolution by operation of law occurs:

A partner's liability for partnership debts is limited to his capital contribution.

Actual authority terminates upon:

Under the RUPA, if a partner is dissociated from a partnership without resulting in dissolution, the business may choose whether to purchase the dissociated partner's interest in the partnership.

A partner:

Under the UPA, which of the following liabilities of a partnership has the highest priority for payment out of partnership assets? Amounts owing to: