Question 1

The rules set out in the UPA defining the liability of partners to outsiders can be modified by the partnership agreement.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A) during dissolution 
B) during winding up 
C) during termination 
D) during dissociation 
A) during dissolution 
B) during winding up 
C) during termination 
D) during dissociation B

Question 3

In determining if a partnership exists,the courts will consider all of the following factors EXCEPT

Accepted Answer

A) management of the business. 
B) actions of the persons involved. 
C) the nature of the business. 
D) profit. 
A) management of the business. 
B) actions of the persons involved. 
C) the nature of the business. 
D) profit. C

Question 4

Daria is a partner in a small coffeeshop.If she acts with actual or implied authority,then she has

Accepted Answer

A) the power to bind the partnership,but not the right. 
B) the right to bind the partnership,but not the power. 
C) both the power and the right to bind the partnership. 
D) neither the power or the right to bind the partnership. 
A) the power to bind the partnership,but not the right. 
B) the right to bind the partnership,but not the power. 
C) both the power and the right to bind the partnership. 
D) neither the power or the right to bind the partnership.

Question 5

Dusty dissociated from a partnership.To protect himself from debts of the partnership after he leaves,Dusty should

Accepted Answer

A) secure an indemnity bond. 
B) file a statement of dissociation with the secretary of state. 
C) execute a formal written agreement with the remaining partners. 
D) demand that the partnership terminate. 
A) secure an indemnity bond. 
B) file a statement of dissociation with the secretary of state. 
C) execute a formal written agreement with the remaining partners. 
D) demand that the partnership terminate.

Question 6

Theresa and Bobbi bought a racecar together.They agreed to share all expenses and split net profits equally.There was no agreement as to the duration of the partnership.After about a year,Bobbi decided she was tired of the racing business and left the partnership.Bobbi did not violate the partnership agreement.Theresa claims Bobbi's leaving was wrongful.Is Theresa correct?

Accepted Answer

A) Yes,Bobbi was legally required to secure Theresa's permission before leaving the partnership. 
B) Yes,Bobbi had a legal duty to stay in the partnership until Theresa was willing to agree to end the relationship. 
C) Yes,Bobbi had a legal duty to stay in the partnership until a new partner could be found. 
D) No,in a partnership at will,a partner has the right to leave the partnership at any time. 
A) Yes,Bobbi was legally required to secure Theresa's permission before leaving the partnership. 
B) Yes,Bobbi had a legal duty to stay in the partnership until Theresa was willing to agree to end the relationship. 
C) Yes,Bobbi had a legal duty to stay in the partnership until a new partner could be found. 
D) No,in a partnership at will,a partner has the right to leave the partnership at any time.

Question 7

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?

Accepted Answer

If Ramiro is dissociated from the partne

Question 8

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

Accepted Answer

A) only Marshall. 
B) only the partnership. 
C) the partnership and the partners together,or in separate lawsuits,or in any combination. 
D) only Marshall and the partnership in a lawsuit together or the creditor loses any right to sue the partnership. 
A) only Marshall. 
B) only the partnership. 
C) the partnership and the partners together,or in separate lawsuits,or in any combination. 
D) only Marshall and the partnership in a lawsuit together or the creditor loses any right to sue the partnership.

Question 9

Which statement about the financial rights of partners is accurate?

Accepted Answer

A) All partnership property belongs to the individual partners. 
B) Partners share profits equally unless they agree otherwise. 
C) Partners share losses equally. 
D) All of these are correct. 
A) All partnership property belongs to the individual partners. 
B) Partners share profits equally unless they agree otherwise. 
C) Partners share losses equally. 
D) All of these are correct.

Question 10

Anne and Mike were winding up their partnership.Mike was approached by a person who wanted the partnership to do some work for him.Mike agreed that the partnership would do the work.Generally speaking,in such a situation

Accepted Answer

A) Anne is not liable since the partnership was in the winding-up phase. 
B) Anne is not liable since she did not consent to the work. 
C) Anne is not liable since Mike's conduct was wrongful. 
D) Anne is liable unless she filed a statement of dissolution with the secretary of state within 90 days of when Mike entered the contract. 
A) Anne is not liable since the partnership was in the winding-up phase. 
B) Anne is not liable since she did not consent to the work. 
C) Anne is not liable since Mike's conduct was wrongful. 
D) Anne is liable unless she filed a statement of dissolution with the secretary of state within 90 days of when Mike entered the contract.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Common law plays an important role in regulating partnerships.

Accepted Answer

A) True 
 B)False

Question 13

Ending a partnership involves which of the following three steps?

Accepted Answer

A) dissolution,winding up,and termination 
B) dissociation,winding down,and consummation 
C) failure,dividing up,and paying off 
D) dissociation,agreement,and dissolution 
A) dissolution,winding up,and termination 
B) dissociation,winding down,and consummation 
C) failure,dividing up,and paying off 
D) dissociation,agreement,and dissolution

Question 14

All of the following conditions must exist for partnership by estoppel to exist EXCEPT

Accepted Answer

A) one partner agrees not to share in the profits of the enterprise. 
B) participants tell other people they are partners even though they are not. 
C) a third party believes and relies upon the assertion that participants are partners. 
D) a third party suffers harm because he or she believed a partnership existed. 
A) one partner agrees not to share in the profits of the enterprise. 
B) participants tell other people they are partners even though they are not. 
C) a third party believes and relies upon the assertion that participants are partners. 
D) a third party suffers harm because he or she believed a partnership existed.

Question 15

Nicholas and Holly are partners in a toymaking shop.If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business,Rudolph must try to collect from the partnership before going after Nicholas's personal assets.

Accepted Answer

A) True 
 B)False

Question 16

A partnership is liable for both the negligent and intentional acts of a partner if the acts were committed within the ordinary course of the partnership's business.

Accepted Answer

A) True 
 B)False

Question 17

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 said,"My partner here,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,he 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?

Accepted Answer

A) Yes.This illustrates a partnership by estoppel. 
B) No.Don was not a partner in the business. 
C) No.Don was a dissociated partner. 
D) No.There was no intent to have a partnership. 
A) Yes.This illustrates a partnership by estoppel. 
B) No.Don was not a partner in the business. 
C) No.Don was a dissociated partner. 
D) No.There was no intent to have a partnership.

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

Identify and briefly discuss the management rights and duties of a partner.

Accepted Answer

Each partner has equal rights in the man

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 32: Partnerships

The rules set out in the UPA defining the liability of partners to outsiders can be modified by the partnership agreement.

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

In determining if a partnership exists,the courts will consider all of the following factors EXCEPT

Daria is a partner in a small coffeeshop.If she acts with actual or implied authority,then she has

Dusty dissociated from a partnership.To protect himself from debts of the partnership after he leaves,Dusty should

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

Which statement about the financial rights of partners is accurate?

Anne and Mike were winding up their partnership.Mike was approached by a person who wanted the partnership to do some work for him.Mike agreed that the partnership would do the work.Generally speaking,in such a situation

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

Common law plays an important role in regulating partnerships.

Ending a partnership involves which of the following three steps?

All of the following conditions must exist for partnership by estoppel to exist EXCEPT

Nicholas and Holly are partners in a toymaking shop.If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business,Rudolph must try to collect from the partnership before going after Nicholas's personal assets.

A partnership is liable for both the negligent and intentional acts of a partner if the acts were committed within the ordinary course of the partnership's business.

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.

Identify and briefly discuss the management rights and duties of a partner.

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

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Privacy and Internet Law

Introduction to Contracts

Agreement: Offers and Acceptances

Consideration

Legality

Voidable Contracts: Capacity and Consent

Written Contracts

Third Parties

Contract Termination

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: Llcs and Other Options

Life and Death of a Corporation

Management Duties

Shareholder Rights

Bankruptcy

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Antitrust

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