Question 1

Which of the following is true about partnership rules for mining partnerships?

Accepted Answer

A) Mining partnerships are easiest to dissolve. 
B) The transferability of mining partnership interest is restricted. 
C) A mining partner may sell his interest to another person. 
D) The death of a mining partner affects a dissolution. 
A) Mining partnerships are easiest to dissolve. 
B) The transferability of mining partnership interest is restricted. 
C) A mining partner may sell his interest to another person. 
D) The death of a mining partner affects a dissolution.

Question 2

Which of the following is true about charging a partner's capital account during distribution?

Accepted Answer

A) Losses from sale of partnership assets during winding up are not charged against a partner's capital account. 
B) Partners are given the gross amount existing in their capital accounts. 
C) On account of negative balance in a partner's account,other partners are under no obligation to contribute to set off the shortage. 
D) If partnership creditors cannot be paid from the partnership assets,the creditors may proceed against the partners' capital accounts. 
A) Losses from sale of partnership assets during winding up are not charged against a partner's capital account. 
B) Partners are given the gross amount existing in their capital accounts. 
C) On account of negative balance in a partner's account,other partners are under no obligation to contribute to set off the shortage. 
D) If partnership creditors cannot be paid from the partnership assets,the creditors may proceed against the partners' capital accounts.

Question 3

Normally,the implied authority of a winding up partner includes no power to borrow money in the name of the partnership.

Accepted Answer

A) True 
 B)False

Question 4

Mr.Green enters into a partnership with IT Doctors LLP.Mr.Green's capital investment into the business is $10,000.Shortly after joining the new business,a client sues the IT Doctors LLP and wins a judgment of $750,000.How much is Mr.Green liable for?

Accepted Answer

A) $10,000 
B) $100,000 
C) $750,000 
D) $0 
A) $10,000 
B) $100,000 
C) $750,000 
D) $0

Question 5

A novation is said to take place when continuing partners release a dissociated partner from liability but creditors do not release him.

Accepted Answer

A) True 
 B)False

Question 6

As per RUPA,if a nonwrongfully dissociated partner demands payment from the partnership,he should be paid:

Accepted Answer

A) within 90 days from the date of demand. 
B) within 120 days from the date of demand. 
C) within no such specified period. 
D) within such time as per the terms and conditions of the partnership. 
A) within 90 days from the date of demand. 
B) within 120 days from the date of demand. 
C) within no such specified period. 
D) within such time as per the terms and conditions of the partnership.

Question 7

Which of the following is true about the effect of LLP statutes after appointment of a new partner?

Accepted Answer

A) RUPA provides that the new partner has full liability for the LLP's obligations. 
B) The former partners will be personally responsible on committing a malpractice. 
C) For obligations incurred before his admission,the new partner may not be held liable. 
D) LLP partnership agreements often change the RUPA rule about a new partner's liability. 
A) RUPA provides that the new partner has full liability for the LLP's obligations. 
B) The former partners will be personally responsible on committing a malpractice. 
C) For obligations incurred before his admission,the new partner may not be held liable. 
D) LLP partnership agreements often change the RUPA rule about a new partner's liability.

Question 8

Leonard,Ted,and Julius are partners at Jutle Associates.They signed a two-year lease agreement with Property Company for business purposes.Five months into the new agreement,Leonard dissociates from the partnership.Under what circumstances will Leonard no longer be liable on the lease agreement?

Accepted Answer

A) Leonard gives proper notice to Property Company of his intent to dissociate from Jutle. 
B) The three partners and Property Company enter into an appropriate novation agreement. 
C) Leonard filed a Statement of Dissociation more than 90 days prior to leaving the partnership. 
D) Property Company will not serve to relieve Leonard of liability under the lease agreement. 
A) Leonard gives proper notice to Property Company of his intent to dissociate from Jutle. 
B) The three partners and Property Company enter into an appropriate novation agreement. 
C) Leonard filed a Statement of Dissociation more than 90 days prior to leaving the partnership. 
D) Property Company will not serve to relieve Leonard of liability under the lease agreement.

Question 9

In the case in the text,Meyer v.Christie,why did the intermediate court affirm the jury's damages award?

Accepted Answer

A) The defendants conspired to take the development opportunity from the plaintiffs. 
B) Expert testimony proved that the plaintiffs suffered a loss of $7 million. 
C) The award was proven beyond a reasonable doubt at trial. 
D) It was reasonable under the circumstances and the award could not be exact because of the defendants' own actions that gave rise to the lawsuit. 
A) The defendants conspired to take the development opportunity from the plaintiffs. 
B) Expert testimony proved that the plaintiffs suffered a loss of $7 million. 
C) The award was proven beyond a reasonable doubt at trial. 
D) It was reasonable under the circumstances and the award could not be exact because of the defendants' own actions that gave rise to the lawsuit.

Question 10

Under RUPA,a new partner just joining a partnership has no liability for past debts of the business.

Accepted Answer

A) True 
 B)False

Question 11

In the case in the text,Dixon v.Crawford,McGilliard,Peterson & Yelish,why did the court hold that the clients Dixon took with him did not impact the value of the firm's goodwill?

Accepted Answer

A) Neither Dixon nor Crawford had a proprietary interest in the clients. 
B) The dissociated partner is compensated for value taken by his departure. 
C) The evidence indicated Dixon did not intentionally steal clients. 
D) Crawford had a proprietary interest in the clients. 
A) Neither Dixon nor Crawford had a proprietary interest in the clients. 
B) The dissociated partner is compensated for value taken by his departure. 
C) The evidence indicated Dixon did not intentionally steal clients. 
D) Crawford had a proprietary interest in the clients.

Question 12

A heated disagreement is grounds for dissociation of a partner with the business.

Accepted Answer

A) True 
 B)False

Question 13

A partner has the power to dissociate from the partnership at any time.

Accepted Answer

A) True 
 B)False

Question 14

If the dissociated partner and the partnership cannot agree on the buyout price:

Accepted Answer

A) the partnership must pay the partner its estimate of the buyout price with interest. 
B) the partnership must pay the partner its estimate of the buyout price only. 
C) the partnership must pay the partner the median price between its estimate price and the partner's requested price. 
D) the partnership does not have to pay the partner until there is a court order. 
A) the partnership must pay the partner its estimate of the buyout price with interest. 
B) the partnership must pay the partner its estimate of the buyout price only. 
C) the partnership must pay the partner the median price between its estimate price and the partner's requested price. 
D) the partnership does not have to pay the partner until there is a court order.

Question 15

A partnership should file a Statement of Dissociation with:

Accepted Answer

A) the Federal Trade Commission. 
B) the Better Business Bureau. 
C) the secretary of state. 
D) the courts. 
A) the Federal Trade Commission. 
B) the Better Business Bureau. 
C) the secretary of state. 
D) the courts.

Question 16

If a partner fails to contribute the amount equal to her negative capital account balance,then it can be recovered:

Accepted Answer

A) from that partner's assets. 
B) by obtaining an undertaking from that partner. 
C) from the other partners. 
D) by charging the creditor's account. 
A) from that partner's assets. 
B) by obtaining an undertaking from that partner. 
C) from the other partners. 
D) by charging the creditor's account.

Question 17

While partnership creditors still have a priority over a partner's creditors with regard to partnership assets,partnership and partners' creditors share ________ in the assets of individual partners.

Accepted Answer

A) one-third 
B) two-thirds 
C) equally 
D) pro rata 
A) one-third 
B) two-thirds 
C) equally 
D) pro rata

Question 18

Which of the following is a nonwrongful dissociation?

Accepted Answer

A) A partner's filing of a bankruptcy petition 
B) A partner's retirement at age 60 when the partnership agreement requires the partners to retire at age 70 
C) A partner's willful and persistent breach of the partnership agreement 
D) A partner's death 
A) A partner's filing of a bankruptcy petition 
B) A partner's retirement at age 60 when the partnership agreement requires the partners to retire at age 70 
C) A partner's willful and persistent breach of the partnership agreement 
D) A partner's death

Question 19

In a limited liability partnership,most of the partners have liability for partnership obligations:

Accepted Answer

A) beyond the partnership assets. 
B) up to the extent of the partnership assets. 
C) as per the partnership rules & regulation. 
D) as per the demand of the partner. 
A) beyond the partnership assets. 
B) up to the extent of the partnership assets. 
C) as per the partnership rules & regulation. 
D) as per the demand of the partner.

Question 20

A winding-up partner may not inter into a new contract unless:

Accepted Answer

A) the contract is in furtherance of the partnership's purpose 
B) the contract aids the liquidation of the partnership's assets. 
C) he honestly believes it is in the best interest of the partnership. 
D) it is with a previous client. 
A) the contract is in furtherance of the partnership's purpose 
B) the contract aids the liquidation of the partnership's assets. 
C) he honestly believes it is in the best interest of the partnership. 
D) it is with a previous client.

Exam 39: Partners Dissociation and Partnerships Dissolution and Winding up

Which of the following is true about partnership rules for mining partnerships?

Which of the following is true about charging a partner's capital account during distribution?

Normally,the implied authority of a winding up partner includes no power to borrow money in the name of the partnership.

Mr.Green enters into a partnership with IT Doctors LLP.Mr.Green's capital investment into the business is $10,000.Shortly after joining the new business,a client sues the IT Doctors LLP and wins a judgment of $750,000.How much is Mr.Green liable for?

A novation is said to take place when continuing partners release a dissociated partner from liability but creditors do not release him.

As per RUPA,if a nonwrongfully dissociated partner demands payment from the partnership,he should be paid:

Which of the following is true about the effect of LLP statutes after appointment of a new partner?

Leonard,Ted,and Julius are partners at Jutle Associates.They signed a two-year lease agreement with Property Company for business purposes.Five months into the new agreement,Leonard dissociates from the partnership.Under what circumstances will Leonard no longer be liable on the lease agreement?

In the case in the text,Meyer v.Christie,why did the intermediate court affirm the jury's damages award?

Under RUPA,a new partner just joining a partnership has no liability for past debts of the business.

In the case in the text,Dixon v.Crawford,McGilliard,Peterson & Yelish,why did the court hold that the clients Dixon took with him did not impact the value of the firm's goodwill?

A heated disagreement is grounds for dissociation of a partner with the business.

A partner has the power to dissociate from the partnership at any time.

If the dissociated partner and the partnership cannot agree on the buyout price:

A partnership should file a Statement of Dissociation with:

If a partner fails to contribute the amount equal to her negative capital account balance,then it can be recovered:

While partnership creditors still have a priority over a partner's creditors with regard to partnership assets,partnership and partners' creditors share ________ in the assets of individual partners.

Which of the following is a nonwrongful dissociation?

In a limited liability partnership,most of the partners have liability for partnership obligations:

A winding-up partner may not inter into a new contract unless:

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

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

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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