Question 1

Which of the following is a major difference between the RUPA and the UPA?

Accepted Answer

A)  The UPA has very stringent start up requirements and the RUPA does not. 
B)  The RUPA allows a partnership to survive if one partner withdraws whereas the UPA does not. 
C)  The RUPA requires annual fee and forms to be filed with the state where as the UPA does not. 
D)  The RUPA has unlimited liability of each of the partners, whereas the UPA does not. 
A)  The UPA has very stringent start up requirements and the RUPA does not. 
B)  The RUPA allows a partnership to survive if one partner withdraws whereas the UPA does not. 
C)  The RUPA requires annual fee and forms to be filed with the state where as the UPA does not. 
D)  The RUPA has unlimited liability of each of the partners, whereas the UPA does not. B

Question 2

A responsibility to act in the best interests of a partnership by the partners is call a(n)

Accepted Answer

A)  Ethical duty 
B)  Moral duty 
C)  Fiduciary duty 
D)  Legal duty 
A)  Ethical duty 
B)  Moral duty 
C)  Fiduciary duty 
D)  Legal duty C

Question 3

In Waddell v. Rustin, the court determined

Accepted Answer

A)  That no implied partnership existed as that the prosperity of the business was not due to the equal contribution of the two parties. 
B)  An implied partnership did occur because the reasonable person would assume two brothers would be partners. 
C)  An express partnership existed because one man acknowledged that the other man did provide a valuable service for his business. 
D)  The business was not a partnership because all partnerships must have some written agreement to be considered a partnership. 
A)  That no implied partnership existed as that the prosperity of the business was not due to the equal contribution of the two parties. 
B)  An implied partnership did occur because the reasonable person would assume two brothers would be partners. 
C)  An express partnership existed because one man acknowledged that the other man did provide a valuable service for his business. 
D)  The business was not a partnership because all partnerships must have some written agreement to be considered a partnership. A

Question 4

In the case, Meinhard v. Salmon, the court ruled

Accepted Answer

A)  That Salmon breached his duty of loyalty. 
B)  That Salmon breached his duty of care. 
C)  That Salmon breached his duty of good faith. 
D)  That Salmon breach his duty of wisdom. 
A)  That Salmon breached his duty of loyalty. 
B)  That Salmon breached his duty of care. 
C)  That Salmon breached his duty of good faith. 
D)  That Salmon breach his duty of wisdom.

Question 5

A __________ partner may withdraw at any time without causing dissolution of the partnership.

Accepted Answer

A)  Limited 
B)  General 
C)  Fiduciary 
D)  Primary 
A)  Limited 
B)  General 
C)  Fiduciary 
D)  Primary

Question 6

Peggy, Crystal and Dean want to enter into a partnership, however, Dean cannot contribute an equal amount of capital or manpower to the partnership. Therefore, they want to ensure that Dean will only be able to get a portion of the profits equal to both his capital and manpower contributions. Which of the following statements would be accurate statement?

Accepted Answer

A)  The partners should create a partnership agreement to override the default rule that partners have an equal right to profits. 
B)  The default rule will always trump a partnership agreement, therefore, they should not enter into a partnership with Dean if they do not want to split the profits with him equally. 
C)  Each time profits are divided the court will intervene and determine what is a fair and just distribution. 
D)  Peggy and Crystal should just hide a portion of the profits from Dean. 
A)  The partners should create a partnership agreement to override the default rule that partners have an equal right to profits. 
B)  The default rule will always trump a partnership agreement, therefore, they should not enter into a partnership with Dean if they do not want to split the profits with him equally. 
C)  Each time profits are divided the court will intervene and determine what is a fair and just distribution. 
D)  Peggy and Crystal should just hide a portion of the profits from Dean.

Question 7

Idi and Amin are partners in a golf course and reception area. Idi's darling daughter, Amelda is getting married and Idi wants to use the whole reception area for his daughter's reception and that would involve shutting down the whole golf course. Amin does not want him to use the reception area and shut down the golf course. Which of the following statements is correct?

Accepted Answer

A)  Since Idi and Amin are partners, they have an equal right to use the property. Therefore, Idi will be able to use all of the property for his daughter's reception. 
B)  Idi will not be able to use any of the property as Amin has priority rights. 
C)  Idi will be able to use all of the property for his daughter's reception if he pays half the normal rate for use of the property. 
D)  Idi will not be able to use the whole property for his daughter's reception. 
A)  Since Idi and Amin are partners, they have an equal right to use the property. Therefore, Idi will be able to use all of the property for his daughter's reception. 
B)  Idi will not be able to use any of the property as Amin has priority rights. 
C)  Idi will be able to use all of the property for his daughter's reception if he pays half the normal rate for use of the property. 
D)  Idi will not be able to use the whole property for his daughter's reception.

Question 8

If a partnership does not want to abide by the default rules promulgated by the RUPA and/or the UPA, the partners

Accepted Answer

A)  Are out of luck as the default rules are mandatory. 
B)  Can override the default rules by judicial decree. 
C)  Can override the default rules by a partnership agreement. 
D)  Are out of luck as modifying default rules is criminal misconduct. 
A)  Are out of luck as the default rules are mandatory. 
B)  Can override the default rules by judicial decree. 
C)  Can override the default rules by a partnership agreement. 
D)  Are out of luck as modifying default rules is criminal misconduct.

Question 9

Harry and Ron are partners in a delivery business. On a delivery, the delivery truck has a flat tire and Harry pays to have the flat fixed with his own personal credit card. Harry will be paid back the expense that he incurred in the ordinary course of business because

Accepted Answer

A)  All partners have a right to indemnity 
B)  All partners have a right to liquidate 
C)  All partners have a right to substitute 
D)  All partners have a right to reimbursement 
A)  All partners have a right to indemnity 
B)  All partners have a right to liquidate 
C)  All partners have a right to substitute 
D)  All partners have a right to reimbursement

Question 10

General Partnerships are created by filing a form with the state or government.

Accepted Answer

A) True 
 B)False

Question 11

Limited partnerships are required to file a(n) __________ return with the IRS each year.

Accepted Answer

A)  SEC 
B)  Articles of incorporation 
C)  Limited 
D)  Information 
A)  SEC 
B)  Articles of incorporation 
C)  Limited 
D)  Information

Question 12

To date, how many states in the US have adopted all or substantial portions of the Revised Uniform Partnership Act?

Accepted Answer

A)  All 50 states 
B)  About 25 percent of the states, 13 states. 
C)  About half, 25 states 
D)  About 80 percent, 40 states. 
A)  All 50 states 
B)  About 25 percent of the states, 13 states. 
C)  About half, 25 states 
D)  About 80 percent, 40 states.

Question 13

A partner's duty of loyalty means that partners cannot take advantage of a business opportunity to the detriment of the partnership.

Accepted Answer

A) True 
 B)False

Question 14

A partnership where the partners have not agreed to remain partners until the expiration of a definite term or event is known as __________.

Accepted Answer

A)  Partnership at will 
B)  Contractual partnership 
C)  UCC partnership 
D)  Common law partnership 
A)  Partnership at will 
B)  Contractual partnership 
C)  UCC partnership 
D)  Common law partnership

Question 15

When a partnership has reached its agreed-upon term or when the partners unanimously agree to end the partnership this is called

Accepted Answer

A)  Dissociation 
B)  Dissolution 
C)  Determination 
D)  Destruction 
A)  Dissociation 
B)  Dissolution 
C)  Determination 
D)  Destruction

Question 16

Unless the partnership agreement states otherwise, all partners have a right to vote on business decisions.

Accepted Answer

A) True 
 B)False

Question 17

If a partnership agreement does not cover certain items then default rules will apply.

Accepted Answer

A) True 
 B)False

Question 18

In cases where a partner has engaged in some misconduct or tortious conduct the LLP acts to shield

Accepted Answer

A)  Every partner's liability. 
B)  Only the personal assets of other partners. 
C)  Only the general partner's assets. 
D)  Only the business assets. 
A)  Every partner's liability. 
B)  Only the personal assets of other partners. 
C)  Only the general partner's assets. 
D)  Only the business assets.

Question 19

Vladamir, Alexander and Tchaicovsky are each partners in VAT Vodka. Vladamir enters into a contract with Grey Moose to make all of their vodka for them. Quickly VAT fails miserably to perform the terms of the contract and Grey Moose successfully sues them for damages. Which statement is correct?

Accepted Answer

A)  Only the business assets of VAT will be used to pay the lawsuit. 
B)  Only Vladamir will be required to pay the lawsuit as he is the one who entered into the contract. 
C)  Since the facts state the only Vladamir entered into the contract, the contract will be deemed unenforceable as in a partnership, it requires all of the partners to consent to the agreement. 
D)  All three partners will be liable for the lawsuit. 
A)  Only the business assets of VAT will be used to pay the lawsuit. 
B)  Only Vladamir will be required to pay the lawsuit as he is the one who entered into the contract. 
C)  Since the facts state the only Vladamir entered into the contract, the contract will be deemed unenforceable as in a partnership, it requires all of the partners to consent to the agreement. 
D)  All three partners will be liable for the lawsuit.

Question 20

Al and Tom are co-owners of "A & T Auto Repairs." The both consider themselves managers and the split the decision-making and profits 50/50, yet they do not have any formal paperwork stating that they are a partnership. Which of the following statements is true?

Accepted Answer

A)  Since the have not file a Uniform Partnership Agreement, they are not a partnership. 
B)  Since their actions show they conduct themselves as a partnership, the law will consider them an implied partnership. 
C)  Since their actions show they conduct themselves as a partnership, the law will consider them an express partnership. 
D)  The law will consider each of them sole-proprietorships. 
A)  Since the have not file a Uniform Partnership Agreement, they are not a partnership. 
B)  Since their actions show they conduct themselves as a partnership, the law will consider them an implied partnership. 
C)  Since their actions show they conduct themselves as a partnership, the law will consider them an express partnership. 
D)  The law will consider each of them sole-proprietorships.

Exam 28: Partnerships

Which of the following is a major difference between the RUPA and the UPA?

A responsibility to act in the best interests of a partnership by the partners is call a(n)

In Waddell v. Rustin, the court determined

In the case, Meinhard v. Salmon, the court ruled

A __________ partner may withdraw at any time without causing dissolution of the partnership.

If a partnership does not want to abide by the default rules promulgated by the RUPA and/or the UPA, the partners

Harry and Ron are partners in a delivery business. On a delivery, the delivery truck has a flat tire and Harry pays to have the flat fixed with his own personal credit card. Harry will be paid back the expense that he incurred in the ordinary course of business because

General Partnerships are created by filing a form with the state or government.

Limited partnerships are required to file a(n) __________ return with the IRS each year.

To date, how many states in the US have adopted all or substantial portions of the Revised Uniform Partnership Act?

A partner's duty of loyalty means that partners cannot take advantage of a business opportunity to the detriment of the partnership.

A partnership where the partners have not agreed to remain partners until the expiration of a definite term or event is known as __________.

When a partnership has reached its agreed-upon term or when the partners unanimously agree to end the partnership this is called

Unless the partnership agreement states otherwise, all partners have a right to vote on business decisions.

If a partnership agreement does not cover certain items then default rules will apply.

In cases where a partner has engaged in some misconduct or tortious conduct the LLP acts to shield

Vladamir, Alexander and Tchaicovsky are each partners in VAT Vodka. Vladamir enters into a contract with Grey Moose to make all of their vodka for them. Quickly VAT fails miserably to perform the terms of the contract and Grey Moose successfully sues them for damages. Which statement is correct?

Al and Tom are co-owners of "A & T Auto Repairs." The both consider themselves managers and the split the decision-making and profits 50/50, yet they do not have any formal paperwork stating that they are a partnership. Which of the following statements is true?

Legal Foundations and Thinking Strategically

Business, Societal, and Ethical Contexts of Law

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution

Contracts: Overview, Definition, Categories, and Source of Law

Mutual Assent: Agreement and Consideration

Capacity and Legality

Enforceability

Performance

Breach and Remedies

Contracts for the Sale of Goods: Overview of Article 2

Sales Contracts: Agreement, Consideration, and the Statute of Frauds

Title, Allocation of Risk, and Insurable Interest

Performance and Cure in Sales Contracts

Breach and Remedies in a Sales Transaction

UCC Article 2A: Lease Contracts

Sales Warranties

Definition, Creation, and Categories of Negotiable Instruments

Negotiation, Endorsements, and Holder in Due Course

Liability, Defenses, and Discharge

Checks, Deposits, and Financial Institutions

Secured Transactions

Creditors Rights

Alternatives for Insolvent Borrowers

Bankruptcy

Choice of Business Entity and Sole Proprietorships

Limited Liability Partnerships and Limited Liability Companies

Corporations: Formation and Organization

Corporate Transactions: Acquisitions and Mergers

Overview of the Securities Market: Definition, Categories, and Regulation

Regulation of Issuance: The Securities Act of 1933

Regulation of Trading: The Securities Exchange Act of 1934

Regulation of Corporate Governance

Regulation of Financial Markets

Agency Formation, Categories, and Authority

Duties and Liabilities of Principals and Agents

Employment at Will

Employment Regulation and Labor Law

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Administrative Law

Consumer Protection

Criminal Law and Procedure

Insurance Law

Environmental Law

Personal Property, Real Property, and Land Use Law

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