Exam 32: Partnerships

Brock and Heidi agree to jointly run a fundraiser for the nonprofit children's hospital.Even if they don't have a formal,written agreement,they have formed a partnership.

Ramiro is dissociated from the partnership he helped form ten years ago.If his partners want to continue the business,what must they do? Does it make any difference if the dissociation was wrongful?

Kayla and Marshall formed a partnership.Marshall incurred a debt in the ordinary course of the partnership business.If the debt is not paid,the creditor may sue:

Debbie is a partner with Adam and Marty.She sells her interest in the partnership to Craig.Which statement below is the most accurate?

A group of accounting alumni decided to hold a fundraiser to establish a scholarship for an accounting student.This enterprise is:

Charles and Becky are partners.If they have a disagreement,the Uniform Partnership Act will govern their respective rights with each other:

Lily is involved in the winding up of her partnership.Lily is not entitled to compensation for her work since she is a partner.

In the case of Hooper v.Hooper,the court found:

Judy believed that Ray and Don were partners in an automotive repair business.Ray and Don were not partners.Ray owned the business as a sole proprietor.Ray,however,allowed Don,his unemployed brother-in-law,to be around the business.When Judy was having her car repaired,Ray told her "my partner over there,Don,will give you a ride to work this morning so you can leave your car here.He will give you a ride back here after work and your car will be done." Judy allowed Don to drive her to work.While riding with Don,Don accidentally ran a stop light and caused an accident.Judy was hurt and claims that both Don and Ray are liable to her.Is she right?

Max,Jenny,and Craig are partners.They have purchased an elegant Victorian home and converted it into an office for their partnership.Craig decides to use the partnership's office to host some evening parties.Craig has a sideline business of arranging expensive gatherings and charging each person a handsome price to attend these "elite" parties.When Max and Jenny find out what Craig is doing,they demand that he pay them for the use of the property.How much money,if any,is Craig required to pay the partnership?

A partnership is the association of two or more persons to carry on as co-owners a business for profit.The association:

Kyle,Pedro,and Madeline form a partnership.There is no agreement as to the duration of the partnership.The partnership is a partnership at will.

Dennis and Claudia were partners who operated a retail store.They agreed to end the partnership.Dennis agreed to stay at the store and oversee the going-out-of-business sale.Claudia agreed to deal with the accountants and other related matters not directly related to the hands-on operation of running the store.Claudia received notice that the store's liability policy would expire on July 1.She decided not to renew the policy and let it lapse.The going-out-of-business sale would not be completed until August 1.In July,a customer slipped and fell in the store.When Dennis learned that Claudia had allowed the liability policy to lapse,he was very upset and claimed he should not be liable for the customer's injury.Is Dennis liable to the customer? Explain.

A partnership can only be held liable for the partners' authorized acts.

At what stage are the partnership debts paid and the proceeds distributed to the partners?

Astrid and Razi formed a partnership in which they agree to share profits 60 percent to Astrid and 40 percent to Razi.Losses will be shared:

The common law of agency applies to relations between partners and it also applies to relations between partners and third parties.

Jeremiah was a partner in a partnership,but he quit unexpectedly when he got his feelings hurt over an internal decision.Dissociation has occurred.

Linda,a partner,is involved in the winding up of the partnership.A lucrative business opportunity for the partnership arises.Linda does not have the right to take on this new business.

Jack and Jill were living together.Jack wanted to start a small retail store,but did not have good credit.Jill,whose credit was excellent,signed loan agreements with Jack so he could borrow the money to start the business.Jack used business cards that stated he was the "owner" of the business.He and Jill filed separate tax returns.Jack stated he was self-employed and claimed the business was a sole proprietorship.The money that was earned from the store was placed into a joint checking account owned and used by Jack and Jill.When there were significant decisions to be made about the business,such as deciding to franchise the business,the decision was made jointly by Jack and Jill. Five years after the business was started,Jill left Jack.She claimed she was entitled to one-half the business's profits since she and Jack were partners.Jack disagreed and claimed they never had a partnership.Discuss Jill's claim.