Question 1

Which of the following would satisfy the RUPA's "for profit" requirement?

Accepted Answer

A) An endeavor carried on by several people for nonprofit objectives 
B) An endeavor carried on by several people for charitable objectives 
C) An enterprise suffered losses,yet the owners intended to make a profit 
D) An enterprise made a profit,yet the owners intended to only break even 
A) An endeavor carried on by several people for nonprofit objectives 
B) An endeavor carried on by several people for charitable objectives 
C) An enterprise suffered losses,yet the owners intended to make a profit 
D) An enterprise made a profit,yet the owners intended to only break even

Question 2

One of the two most important factors in establishing co-ownership of the business is:

Accepted Answer

A) making profits. 
B) sharing management of the business. 
C) encouraging voluntary relationships. 
D) creating joint ventures. 
A) making profits. 
B) sharing management of the business. 
C) encouraging voluntary relationships. 
D) creating joint ventures.

Question 3

Partners of a partnership:

Accepted Answer

A) are not liable for all of the partnership's obligations. 
B) are entitled to income of the partnership,which must be reported on their individual federal income tax returns. 
C) are not permitted to deduct partnership losses on their individual federal income tax returns. 
D) can create a partnership only by complying with a statute. 
A) are not liable for all of the partnership's obligations. 
B) are entitled to income of the partnership,which must be reported on their individual federal income tax returns. 
C) are not permitted to deduct partnership losses on their individual federal income tax returns. 
D) can create a partnership only by complying with a statute.

Question 4

If a third party deals with a person who appears to be the partner of another person,and the third party is harmed,it may recover damages under:

Accepted Answer

A) the doctrine of purported partners. 
B) the general law for joint ventures. 
C) the doctrine of direct liability. 
D) the doctrine of respondeat superior. 
A) the doctrine of purported partners. 
B) the general law for joint ventures. 
C) the doctrine of direct liability. 
D) the doctrine of respondeat superior.

Question 5

You can form a partnership with one individual.

Accepted Answer

A) True 
 B)False

Question 6

A loan made by a partner to a partnership business is:

Accepted Answer

A) a part of partnership capital. 
B) a part of the partnership's assets. 
C) a liability of the partnership business. 
D) a partner's contribution to the partnership business. 
A) a part of partnership capital. 
B) a part of the partnership's assets. 
C) a liability of the partnership business. 
D) a partner's contribution to the partnership business.

Question 7

Under the RUPA,a person will be a purported partner and have liability when three elements of section 308(a)are met.Which of the following is not one of those elements?

Accepted Answer

A) A person purports to be or consents to being represented as a partner of another person or partnership. 
B) A third party relies on the representation. 
C) A third party suffered actual,tangible harm. 
D) A third party transacts with the actual or purported partnership. 
A) A person purports to be or consents to being represented as a partner of another person or partnership. 
B) A third party relies on the representation. 
C) A third party suffered actual,tangible harm. 
D) A third party transacts with the actual or purported partnership.

Question 8

In the case in the text,Rasmussen v.Jackson,the court held that:

Accepted Answer

A) although Jackson and Rasmussen had joint property,this was not enough to create a partnership. 
B) although Jackson and Rasmussen shared gross returns,this was not enough to create a partnership. 
C) there was no evidence of a partnership. 
D) although Jackson and Rasmussen shared profits,this was not enough to create a partnership. 
A) although Jackson and Rasmussen had joint property,this was not enough to create a partnership. 
B) although Jackson and Rasmussen shared gross returns,this was not enough to create a partnership. 
C) there was no evidence of a partnership. 
D) although Jackson and Rasmussen shared profits,this was not enough to create a partnership.

Question 9

Selena joins Kona's management consulting business.They do not indicate whether Selena is Kona's partner,but Selena receives 34 percent of the profits of the business and makes decisions regarding which clients the business should accept.Two years later,Selena leaves the business to start a singing career.Selena claims she owns a portion of the value of the business.Is Selena correct?

Accepted Answer

Yes.Selena and Kona are partners because

Question 10

Mr.Olive and Mrs.Pickle enter into a partnership to provide IT consulting services.The name of the business is IT Doctor.From the partnership account,Mr.Olive purchases a laptop and a tablet for the business's use.Who owns the laptop and tablet?

Accepted Answer

A) Mr.Olive 
B) Mrs.Pickle 
C) The business IT Doctor 
D) The government 
A) Mr.Olive 
B) Mrs.Pickle 
C) The business IT Doctor 
D) The government

Question 11

Which of the following statements about the history of partnerships is false?

Accepted Answer

A) Partnerships were known in ancient Babylonia,ancient Greece,and the Roman Empire. 
B) During the Middle Ages,much trade between nations was carried on by partnerships. 
C) The definition of a partnership in the 6th-century Justinian Code of the Roman Empire varies greatly from that in our laws today. 
D) English common law recognized the partnership by the close of the 17th century. 
A) Partnerships were known in ancient Babylonia,ancient Greece,and the Roman Empire. 
B) During the Middle Ages,much trade between nations was carried on by partnerships. 
C) The definition of a partnership in the 6th-century Justinian Code of the Roman Empire varies greatly from that in our laws today. 
D) English common law recognized the partnership by the close of the 17th century.

Question 12

To remove all ambiguity regarding ownership of property used by a partnership,the partners should come to an agreement regarding property ownership and put such an agreement:

Accepted Answer

A) in a filing with the secretary of state. 
B) in a partnership agreement. 
C) in a contract in compliance with the statute of frauds. 
D) in an exculpatory clause. 
A) in a filing with the secretary of state. 
B) in a partnership agreement. 
C) in a contract in compliance with the statute of frauds. 
D) in an exculpatory clause.

Question 13

The general law governing general partnerships is primarily found in the Revised Uniform Partnership Act (RUPA).

Accepted Answer

A) True 
 B)False

Question 14

A(n)________ is a close corporation whose shareholders have elected to be taxed essentially like partners are taxed under federal income tax law.

Accepted Answer

A) sole proprietorship 
B) LLLP 
C) LLC 
D) S Corporation 
A) sole proprietorship 
B) LLLP 
C) LLC 
D) S Corporation

Question 15

Ann and Susan want to enter into a partnership business of selling cars for a term of five years.They must prepare a partnership agreement in writing to be enforceable under the statute of frauds.

Accepted Answer

A) True 
 B)False

Question 16

A partner's ownership interest is called a ________.

Accepted Answer

A) partnership interest 
B) shareholder interest 
C) partnership liability 
D) charging order 
A) partnership interest 
B) shareholder interest 
C) partnership liability 
D) charging order

Question 17

Which of the following statements about limited liability partnerships (LLPs)is false?

Accepted Answer

A) The LLP's name must end with the acronym "RLLP." 
B) The partners of an LLP must expressly agree to create an LLP by complying with an LLP statute. 
C) The formation of an LLP requires filing a form with the secretary of state. 
D) The formation of an LLP requires paying an annual fee. 
A) The LLP's name must end with the acronym "RLLP." 
B) The partners of an LLP must expressly agree to create an LLP by complying with an LLP statute. 
C) The formation of an LLP requires filing a form with the secretary of state. 
D) The formation of an LLP requires paying an annual fee.

Question 18

Under the doctrine of purported partners,a third party may hold liable persons who purport to be partners.

Accepted Answer

A) True 
 B)False

Question 19

A limited partner in a limited partnership has the right to manage the limited partnership business.

Accepted Answer

A) True 
 B)False

Question 20

The sole proprietor has the right to deduct business losses on his individual tax return.

Accepted Answer

A) True 
 B)False

Exam 37: Introduction to Forms of Business and Formation of Partnerships

Which of the following would satisfy the RUPA's "for profit" requirement?

One of the two most important factors in establishing co-ownership of the business is:

Partners of a partnership:

If a third party deals with a person who appears to be the partner of another person,and the third party is harmed,it may recover damages under:

You can form a partnership with one individual.

A loan made by a partner to a partnership business is:

Under the RUPA,a person will be a purported partner and have liability when three elements of section 308(a)are met.Which of the following is not one of those elements?

In the case in the text,Rasmussen v.Jackson,the court held that:

Mr.Olive and Mrs.Pickle enter into a partnership to provide IT consulting services.The name of the business is IT Doctor.From the partnership account,Mr.Olive purchases a laptop and a tablet for the business's use.Who owns the laptop and tablet?

Which of the following statements about the history of partnerships is false?

To remove all ambiguity regarding ownership of property used by a partnership,the partners should come to an agreement regarding property ownership and put such an agreement:

The general law governing general partnerships is primarily found in the Revised Uniform Partnership Act (RUPA).

A(n)________ is a close corporation whose shareholders have elected to be taxed essentially like partners are taxed under federal income tax law.

Ann and Susan want to enter into a partnership business of selling cars for a term of five years.They must prepare a partnership agreement in writing to be enforceable under the statute of frauds.

A partner's ownership interest is called a ________.

Which of the following statements about limited liability partnerships (LLPs)is false?

Under the doctrine of purported partners,a third party may hold liable persons who purport to be partners.

A limited partner in a limited partnership has the right to manage the limited partnership business.

The sole proprietor has the right to deduct business losses on his individual tax return.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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