Question 1

The death of a partner before the expiration of the term of a partnership is a nonwrongful dissociation.

Accepted Answer

A) True 
 B)False

Question 2

What is the term for the orderly sale of the assets of the partnership as part of dissociation?

Accepted Answer

A)  Winding up 
B)  Incorporation 
C)  Organizing 
D)  Foreclosure 
A)  Winding up 
B)  Incorporation 
C)  Organizing 
D)  Foreclosure

Question 3

Emmy,Shane,and Rusty are partners of the firm Esha Associates.Rusty nonwrongfully dissociates himself from the partnership.Under these circumstances,Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

Accepted Answer

A)  if all the partners consent to it. 
B)  if there is an agreement. 
C)  if there is a court order. 
D)  by novation. 
A)  if all the partners consent to it. 
B)  if there is an agreement. 
C)  if there is a court order. 
D)  by novation.

Question 4

The partnership rules of dissociation and dissolution apply to joint ventures.

Accepted Answer

A) True 
 B)False

Question 5

What is the term for a dissociation that violates the partnership agreement?

Accepted Answer

A)  Wrongful dissociation 
B)  Breach dissociation 
C)  Fraud dissociation 
D)  Agent dissociation 
A)  Wrongful dissociation 
B)  Breach dissociation 
C)  Fraud dissociation 
D)  Agent dissociation

Question 6

Mark,John,and Graham are partners.Mark voluntarily and nonwrongfully leaves the partnership.However,the partnership has a three-year lease with Green Real Estate Inc.So long as Mark leaves the partnership,he is no longer liable for the lease agreement.

Accepted Answer

A) True 
 B)False

Question 7

Amos,Beverly,Carlos,and Dan were partners in a partnership in which the agreement states that the partnership will continue until 2010.Amos died in 2006.What vote of the remaining partners is necessary to continue operating the partnership business?

Accepted Answer

A)  A simple majority vote 
B)  A two-thirds majority vote 
C)  A three-quarters majority vote 
D)  A unanimous vote 
A)  A simple majority vote 
B)  A two-thirds majority vote 
C)  A three-quarters majority vote 
D)  A unanimous vote

Question 8

Xavier,Yellie,and Zelda are partners of Koral Associates.The term of the partnership is 5 years,but Zelda withdraws after 1 year because she no longer wished to continue.Discuss the nature and consequences of Zelda's dissociation.

Accepted Answer

Zelda likely violated an express term of

Question 9

Carlita retires from Mortex Associates,a partnership.The business is continued by the remaining partners.What is Carlita's liability on debts incurred while she was a partner?

Accepted Answer

A)  Carlita has liability to the extent of her capital contribution. 
B)  Carlita is fully liable. 
C)  Carlita has no liability. 
D)  Carlita has liability to the extent of partnership assets at the time of dissociation. 
A)  Carlita has liability to the extent of her capital contribution. 
B)  Carlita is fully liable. 
C)  Carlita has no liability. 
D)  Carlita has liability to the extent of partnership assets at the time of dissociation.

Question 10

Discuss a partner's authority to borrow money during winding up.

Accepted Answer

Usually,the implied authority of a windi

Question 11

Which of the following is an apparent authority during winding up?

Accepted Answer

A)  Providing a third party notification of the dissolution 
B)  Continue making new contracts with disregard to the third parties' awareness about the same 
C)  Conducting business the way it was before dissolution 
D)  Filing a Statement of Dissolution with the secretary of state 
A)  Providing a third party notification of the dissolution 
B)  Continue making new contracts with disregard to the third parties' awareness about the same 
C)  Conducting business the way it was before dissolution 
D)  Filing a Statement of Dissolution with the secretary of state

Question 12

Which of the following is true about eliminating partners' apparent authority?

Accepted Answer

A)  Eliminating the apparent authority is not a safe practice during winding up. 
B)  Apparent authority cannot be eliminated by merely informing the existing business clients. 
C)  Filing a Statement of Dissolution will increase the partners' apparent authority. 
D)  The partnership should post notice of the dissolution at its place of business to let third parties know. 
A)  Eliminating the apparent authority is not a safe practice during winding up. 
B)  Apparent authority cannot be eliminated by merely informing the existing business clients. 
C)  Filing a Statement of Dissolution will increase the partners' apparent authority. 
D)  The partnership should post notice of the dissolution at its place of business to let third parties know.

Question 13

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 14

Only the dissociations listed in the RUPA are allowed.

Accepted Answer

A) True 
 B)False

Question 15

Termination occurs after all partnership assets have been distributed.

Accepted Answer

A) True 
 B)False

Question 16

Abraham,who is a partner in Adona's firm,has been declared a terrorist by the court following investigations of a criminal case.His partners at the firm want to expel him from partnership but they are not ready to give his interest in partnership.Is Abraham entitled to his interest in partnership?

Accepted Answer

Abraham is entitled for his interest fro

Question 17

A new partner to a LLP is liable only to the amount of capital invested in the business.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a nonwrongful dissociation?

Accepted Answer

A)  A partner's filing 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)  Death of a partner 
A)  A partner's filing 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)  Death of a partner

Question 19

Karla retires from Orton Associates,a partnership.The business is continued by the remaining partners and Wes,a new partner who has agreed to assume Karla's liability for partnership obligations.Creditors have not been notified of Karla's retirement.What are Karla's and Wes's liabilities to the creditors?

Accepted Answer

Karla is fully liable on all obligations

Question 20

Which of the following is true about successor's liability for predecessor's obligations?

Accepted Answer

A)  Once continuation begins after dissociation,the creditors remain the creditors of the predecessor. 
B)  Partners may escape prior liabilities by forming new partnerships. 
C)  There has to be an agreement with creditors to eliminate liability for prior obligations. 
D)  The original partners are not liable for obligations incurred prior to dissociation. 
A)  Once continuation begins after dissociation,the creditors remain the creditors of the predecessor. 
B)  Partners may escape prior liabilities by forming new partnerships. 
C)  There has to be an agreement with creditors to eliminate liability for prior obligations. 
D)  The original partners are not liable for obligations incurred prior to dissociation.

Exam 39: Partners Dissociation and Partnerships Dissolution and Winding up

The death of a partner before the expiration of the term of a partnership is a nonwrongful dissociation.

What is the term for the orderly sale of the assets of the partnership as part of dissociation?

Emmy,Shane,and Rusty are partners of the firm Esha Associates.Rusty nonwrongfully dissociates himself from the partnership.Under these circumstances,Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

The partnership rules of dissociation and dissolution apply to joint ventures.

What is the term for a dissociation that violates the partnership agreement?

Mark,John,and Graham are partners.Mark voluntarily and nonwrongfully leaves the partnership.However,the partnership has a three-year lease with Green Real Estate Inc.So long as Mark leaves the partnership,he is no longer liable for the lease agreement.

Amos,Beverly,Carlos,and Dan were partners in a partnership in which the agreement states that the partnership will continue until 2010.Amos died in 2006.What vote of the remaining partners is necessary to continue operating the partnership business?

Xavier,Yellie,and Zelda are partners of Koral Associates.The term of the partnership is 5 years,but Zelda withdraws after 1 year because she no longer wished to continue.Discuss the nature and consequences of Zelda's dissociation.

Carlita retires from Mortex Associates,a partnership.The business is continued by the remaining partners.What is Carlita's liability on debts incurred while she was a partner?

Discuss a partner's authority to borrow money during winding up.

Which of the following is an apparent authority during winding up?

Which of the following is true about eliminating partners' apparent authority?

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?

Only the dissociations listed in the RUPA are allowed.

Termination occurs after all partnership assets have been distributed.

Abraham,who is a partner in Adona's firm,has been declared a terrorist by the court following investigations of a criminal case.His partners at the firm want to expel him from partnership but they are not ready to give his interest in partnership.Is Abraham entitled to his interest in partnership?

A new partner to a LLP is liable only to the amount of capital invested in the business.

Which of the following is a nonwrongful dissociation?

Which of the following is true about successor's liability for predecessor's obligations?

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