Exam 30: Formation and Internal Relations of General Partnerships

The Oak Grove Partnership decided it would buy personal computers for use by each partner. Unknown to the other partners, Cromwell, a partner, had an ownership interest in a computer store and thought he could get the computers for the partnership at the best price because of his inside position. He did, in fact, obtain eight computers at only $150 above the manufacturer's price, which was $250 less than the next lowest bid for each computer. What consequence?

General partnerships are frequently used in finance, accounting, real estate, and law.

Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They each work two days a week. Donations fund the day-to-day operations. Do they have a partnership?

Under the RUPA, a partnership agreement may be written or oral, but not implied.

Answer the following: a. Discuss the aggregate theory. b. What is the entity theory? c. Which approach is adopted by the RUPA? Explain your answer. _a. ^{Under the aggregate theory, a partnership is a group of individuals having no legal}

The principal legal duties imposed upon partners in their relations with one another include:

A person who receives a share of the profits of a business is presumed to be a partner.

A

Drew, Elmer, and Frank are partners in the DEF partnership. The partnership is being dissolved. It has $200,000 in cash assets and it owes $410,000 to creditors. Profits and losses of the partners are shared equally, although Drew contributed $100,000 in capital; Elmer contributed $50,000 in capital; and Frank contributed $25,000 in capital. Which of the following is correct with regard to the responsibility of each partner?

Which of the following is the correct definition for a partnership?

Under the RUPA, a loan from a partner to the partnership is treated the same as loans of a person not a partner, subject to:

Sharing of gross returns establishes a partnership.

In which of the following situations will the inference of the existence of a partnership be drawn from the receipt of profits of a business?

Identify six factors affecting the choice of the most appropriate form of business enterprise. Name the nine forms of business associations discussed in the chapter.

A corporation may not be a partner in a partnership.

Colleen, Joanna, and Ellen form Capital City Company, a partnership. Colleen contributes expertise; Joanna, $15,000; and Ellen, $20,000. After a year, Joanna adds $12,000 as a loan. Ten years later, Capital owes $44,000 to creditors, total assets are $112,000, and they decide to dissolve the business. How will these assets be distributed and what will each receive?

A partner cannot assign his interest in the partnership without dissolving the partnership.

All 50 states have adopted the Revised Uniform Partnership Act.

A limited liability company (LLC) provides limited liability to all of its owners and permits all of its owners to participate in management.

A partner who has no right to participate in control of the business and who has limited liability is a: