Exam 37: Partnerships and Limited Liability Partnerships

Fact Pattern 37-1B (Questions B10-B13 apply) Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 37-1B. Bryn's dissociation from the firm results in

Corbin, a partner in Dentists & Orthodontists Clinic, applies for a loan with Evermore Bank allegedly on the firm's behalf but without the authorization of the other partners. Evermore knows that Corbin is not authorized to take out the loan. If Corbin defaults on the loan, liability for its unpaid amount will be imposed on

Fact Pattern 37-1B (Questions B10-B13 apply) Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 37-1B. Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in

A limited liability limited partnership is a type of limited partnership.

Noah and Orin do business as Personnel Providers, an employment agency. In most states, for purposes of suing and being sued, Personnel Providers, which is a partnership, would be treated as

Hillside Vineyards is a family limited liability partnership. All of the partners must be

Sweet Selections is a general partnership that sells candy, cards and flowers. Sweet Selections has ten partners. Jill and Amy each have a 25 percent interest in the partnership. All the other members have a 10 percent interest. To pass a management decision

One can join a partnership even if all other partners do not consent.

If no fixed duration of the partnership is specified, the partnership is a partnership in perpetuity, which means that the partnership cannot be dissolved.

The partnership is a pass-through entity and a taxpaying entity.

Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a part?ner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?

Nikki and Orlando are limited partners in Port City Exports, a lim?ited part?ner?ship. To avoid personal liability for partnership obligations, they must not

Fresco and Garcia form a partnership-HVAC Pros. Garcia's capital contribution is $10,000, and Fresco's is $15,000. The partnership agreement provides that profits are to be shared, with 40 percent for Garcia and 60 percent for Fresco. Later, Garcia makes a $10,000 loan to the partnership when it needs working capital. When the partnership is dissolved, its assets are $50,000, and its debts are $8,000. How should the assets be distributed?

The majority rule controls decisions that significantly affect the nature of the partnership or that are outside the ordinary course of the partnership business.

Oliana is a partner in Pacific Traders. In the majority of states, with respect to any partnership obligations that Oliana does not participate in, know about, or ratify, Oliana would be liable for

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is

Edgar, Jon, and Phoebe do business as Reliable Movers. Phoebe develops a debilitating illness and can no longer work. Phoebe

Devoting time, energy, and skill to partnership business is a partner's duty and is not a compensable service.

A limited partnership cannot be dissolved by court decree.

A partner may pursue his or her own interests without automatically violating the partner's fiduciary duties to the partnership and the other partners.