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

A mining partner's interest is not freely transferable.

Jane and Ridge are partners in a computer animation firm.Jane retires from the firm,but tells Ridge it is OK to leave his name on the entrance door to the firm and in the telephone listing.Alex,a new client,visits the firm after telephoning the firm.Alex has seen Jane's name listed in the phone book along with Ridge's and the firm's names.He also sees Jane's name on the entrance door to the firm.Believing Jane is a partner with Ridge,Alex contracts to have the firm develop animation for his upcoming film.Ridge,however,never performs the contract.Alex sues Ridge and Jane.Is Jane liable to Alex?

Which of the following is an advantage of a limited partnership?

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 an iPad.Who owns the laptop and iPad?

No formalities are required in order to establish a partnership.

Which of the following is true of a corporation?

In many public meetings,John has proclaimed himself to be an equal partner of Chan's partnership business.Chan's business ran into financial difficulties.John and Chan approached a creditor to obtain loan.The creditor gave the loan based on a false presumption that John was a partner in the business too.Can John be made liable for the loan?

A joint venture is a(n):

A _____ is a partnership whose partners have elected limited liability status.

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

Which of the following is not essential to the formation of a mining partnership?

Although not required,a partnership agreement is highly desirable for the same reasons that written contracts are generally preferred.

As an association,a partnership is a voluntary and consensual relationship.

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

Which of the following is true about a limited partnership?

A mining partner's interest is:

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?

John is a partner of Aegon Services,a limited liability partnership firm.He committed fraud and embezzled $1 million from a client.The other partners would not be personally liable for John's malpractice.

Which of the following is incorrect concerning a joint venture?

A written agreement to the effect that the parties do not intend to form a partnership is not conclusive if their actions provide evidence of their intent to form a relationship that meets the RUPA partnership test.