Question 1

Any event that makes its unlawful for a partnership to continue its business will result in dissolution.

Accepted Answer

A) True 
 B)False

Question 2

Mabel and Nicol do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Company, Mabel fails to account for the profit. To her firm, Mabel is

Accepted Answer

A)  liable for breach of the duty of care. 
B)  liable for breach of the duty of economic sense. 
C)  liable for breach of the duty of loyalty. 
D)  not liable. 
A)  liable for breach of the duty of care. 
B)  liable for breach of the duty of economic sense. 
C)  liable for breach of the duty of loyalty. 
D)  not liable.

Question 3

In a general partnership, all partners have equal rights in managing the partnership.

Accepted Answer

A) True 
 B)False

Question 4

Fact Pattern 27-1
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
-Refer to Fact Pattern 27-1. The partners decide to dissolve Eastside. Dora collects and distributes the firm's assets. This results in

Accepted Answer

A)  nothing with respect to the firm's existence. 
B)  the continuation of the firm's business. 
C)  the termination of the firm's legal existence. 
D)  the temporary suspension of the firm's business. 
A)  nothing with respect to the firm's existence. 
B)  the continuation of the firm's business. 
C)  the termination of the firm's legal existence. 
D)  the temporary suspension of the firm's business.

Question 5

A partner always has the power and the right to dissociate from the partnership.

Accepted Answer

A) True 
 B)False

Question 6

A partnership ends if one partner dissociates from the firm.

Accepted Answer

A) True 
 B)False

Question 7

Sally and Tom decide to go into business, selling discounted merchandise through their Web site "e-Buy." They sign a partnership agreement that requires Sally to contribute $12,000 and Tom to contribute $8,000 in capital to start the firm. The agreement also states that only Sally will have the authority to bind the partnership in deals with third parties, but the agreement says nothing about the management of the firm or a division of profits. Without Sally's knowledge, Tom tells United Computer Products, Inc., that he represents the firm and signs a contract with United to buy hard drives for resale on e-Buy. In the first year, e-Buy makes a profit of $50,000. What are the partners' rights with respect to the management of the firm? Is the partnership bound to the contract with United? Do the partners split the first year's profits? If so, how much is each entitled to?

Accepted Answer

The partners' rights with respect to the

Question 8

Venture Capital, LP, is a limited partnership. Its limited partners include more than 150 sophisticated investors and investment professionals. A Venture limited partner loses his or her limited liability if he or she

Accepted Answer

A)  acts as the firm's manager. 
B)  does not participate in the firm's management. 
C)  invests in Unified Fund, one of Venture's competitors. 
D)  votes on the firm's sale or dissolution. 
A)  acts as the firm's manager. 
B)  does not participate in the firm's management. 
C)  invests in Unified Fund, one of Venture's competitors. 
D)  votes on the firm's sale or dissolution.

Question 9

A partner is a co-owner of partnership property.

Accepted Answer

A) True 
 B)False

Question 10

Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is

Accepted Answer

A)  not liable for the debt. 
B)  only liable for the debt up to the amount of his capital contribution. 
C)  personally liable only to the extent the other partners do not pay. 
D)  personally liable to the full extent of the debt. 
A)  not liable for the debt. 
B)  only liable for the debt up to the amount of his capital contribution. 
C)  personally liable only to the extent the other partners do not pay. 
D)  personally liable to the full extent of the debt.

Question 11

Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a limited partnership. Connie dies. The partnership can

Accepted Answer

A)  continue only after a distribution of its assets. 
B)  continue only as a general partnership. 
C)  continue only if Drew and Ellen consent. 
D)  not continue because Connie's death dissolves the firm. 
A)  continue only after a distribution of its assets. 
B)  continue only as a general partnership. 
C)  continue only if Drew and Ellen consent. 
D)  not continue because Connie's death dissolves the firm.

Question 12

In a limited liability partnership, a partner can be exempt from personal liability for the malpractice of other partners.

Accepted Answer

A) True 
 B)False

Exam 27: All Forms of Partnership

Any event that makes its unlawful for a partnership to continue its business will result in dissolution.

Mabel and Nicol do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Company, Mabel fails to account for the profit. To her firm, Mabel is

In a general partnership, all partners have equal rights in managing the partnership.

Fact Pattern 27-1 Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic. -Refer to Fact Pattern 27-1. The partners decide to dissolve Eastside. Dora collects and distributes the firm's assets. This results in

A partner always has the power and the right to dissociate from the partnership.

A partnership ends if one partner dissociates from the firm.

Venture Capital, LP, is a limited partnership. Its limited partners include more than 150 sophisticated investors and investment professionals. A Venture limited partner loses his or her limited liability if he or she

A partner is a co-owner of partnership property.

Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is

Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a limited partnership. Connie dies. The partnership can

In a limited liability partnership, a partner can be exempt from personal liability for the malpractice of other partners.

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