Exam 31: Operation and Dissolution of General Partnerships

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Jacob dissociates from the Applegate Partnership, which continues to operate. Discuss Jacob's authority to act for the partnership after his dissociation and his possible liability under the RUPA to the partnership or third parties for transactions entered on behalf of the partnership.

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Question 1

Correct Answer:

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Jacob has no actual authority to act for Applegate after his dissociation. However, with regard to apparent authority, the RUPA provides that for two years after the dissociation Applegate is bound by Jacob's acts that would have bound it before his dissociation if the other party reasonably believed Jacob was then a partner and the other party did not have actual or constructive notice of his dissociation. Jacob is liable to Applegate for any damage caused to it arising from obligations he improperly incurred after he dissociated. Jacob is also liable personally to third parties for unauthorized obligations.

Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car. The customer sues the partnership and recovers $11,000 in damages. What liability do the other partners have for Paul's actions?

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(Multiple Choice)

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Question 2

Correct Answer:

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__________ is available to a third person to whom a representation is made and who justifiably relies on the representation.

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(Multiple Choice)

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Question 3

Correct Answer:

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Much of the law of partnership is the law of agency.

(True/False)

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Question 4

Authority that a third person, in view of the circumstances, the conduct of the parties, and a lack of notice or knowledge to the contrary, may reasonably consider to exist is known as:

(Multiple Choice)

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Question 5

In a partnership of A, B , and C, A commits fraud which creates a liability to the partnership of $9,000. If the three partners share profits and losses equally, A 's liability to the partnership for his fraudulent act is $3,000.

(True/False)

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Question 6

Winding up involves all but which one of the following?

(Multiple Choice)

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Question 7

Under the RUPA, the partners have what type of liability for all contract obligations of the partnership?

(Multiple Choice)

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Question 8

Under the RUPA, a judgment creditor of a partnership may first attempt to enforce a judgment against either the separate assets of a partner or the partnership itself.

(True/False)

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Question 9

Jane, Kelly, and Lois are partners in an accounting firm in a state that has adopted the RUPA. Jane intends to retire and withdraw from the partnership at the end of the year. Jane is liable to the firm's creditors:

(Multiple Choice)

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Question 10

Which of the following describes the imposing of partnership duties and liabilities upon a person who is not a partner in an existing partnership by reason of his consenting to representation that he is a partner?

(Multiple Choice)

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Question 11

Under the RUPA, it is possible to cure an illegality within 90 days after notice to the partnership of the event dissolving the partnership for illegality.

(True/False)

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Question 12

Aileen, Jamie, and Delmer are partners in a florist shop. If Delmer engages in conduct that makes it not reasonably practicable to carry on the business, the partnership is dissolved by operation of law.

(True/False)

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Question 13

Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Shannon:

(Multiple Choice)

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Question 14

The actual express authority of partners must be specifically set forth in the partnership agreement.

(True/False)

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Question 15

A partner may bind the partnership by her act if she has:

(Multiple Choice)

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Question 16

Under the RUPA, dissolution occurs automatically upon the happening of an event specified in the partnership agreement as resulting in dissolution. The partners may not agree to continue the business.

(True/False)

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Question 17

Smarth, King, and Finkel have been partners for years, but a court of equity is now segregating and considering separately the assets and liabilities of the partnership and the respective assets and liabilities of the individual partners. This process is called:

(Multiple Choice)

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Question 18

Which of the following is NOT considered to be dissolution by operation of law under the UPA?

(Multiple Choice)

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Question 19

Chuck, Betty, and Bert form CB&B Partnership to run a specialty grocery store. Bert is the day-to-day manager of the store, Betty buys the groceries, and Chuck does all the administrative work. Betty decides she would like a new car to use when calling on prospective wholesalers. She makes a contract with Big Ben Motors in the name of CB&B without consulting Chuck and Bert. CB&B and the individual partners are:

(Multiple Choice)

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Question 20

Showing 1 - 20 of 69

Exam 31: Operation and Dissolution of General Partnerships

Jacob dissociates from the Applegate Partnership, which continues to operate. Discuss Jacob's authority to act for the partnership after his dissociation and his possible liability under the RUPA to the partnership or third parties for transactions entered on behalf of the partnership.

Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car. The customer sues the partnership and recovers $11,000 in damages. What liability do the other partners have for Paul's actions?

__________ is available to a third person to whom a representation is made and who justifiably relies on the representation.

Much of the law of partnership is the law of agency.

Authority that a third person, in view of the circumstances, the conduct of the parties, and a lack of notice or knowledge to the contrary, may reasonably consider to exist is known as:

In a partnership of A, B , and C, A commits fraud which creates a liability to the partnership of $9,000. If the three partners share profits and losses equally, A 's liability to the partnership for his fraudulent act is $3,000.

Winding up involves all but which one of the following?

Under the RUPA, the partners have what type of liability for all contract obligations of the partnership?

Under the RUPA, a judgment creditor of a partnership may first attempt to enforce a judgment against either the separate assets of a partner or the partnership itself.

Jane, Kelly, and Lois are partners in an accounting firm in a state that has adopted the RUPA. Jane intends to retire and withdraw from the partnership at the end of the year. Jane is liable to the firm's creditors:

Which of the following describes the imposing of partnership duties and liabilities upon a person who is not a partner in an existing partnership by reason of his consenting to representation that he is a partner?

Under the RUPA, it is possible to cure an illegality within 90 days after notice to the partnership of the event dissolving the partnership for illegality.

Aileen, Jamie, and Delmer are partners in a florist shop. If Delmer engages in conduct that makes it not reasonably practicable to carry on the business, the partnership is dissolved by operation of law.

Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Shannon:

The actual express authority of partners must be specifically set forth in the partnership agreement.

A partner may bind the partnership by her act if she has:

Under the RUPA, dissolution occurs automatically upon the happening of an event specified in the partnership agreement as resulting in dissolution. The partners may not agree to continue the business.

Smarth, King, and Finkel have been partners for years, but a court of equity is now segregating and considering separately the assets and liabilities of the partnership and the respective assets and liabilities of the individual partners. This process is called:

Which of the following is NOT considered to be dissolution by operation of law under the UPA?

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