Exam 36: Partnerships and Limited Liability Partnerships

Fact Pattern 36-2A Hal, Ira, and Jill are partners in Kappa Accessories, a computer peripherals firm. -Refer to Fact Pattern 36-2A. Ira dissociates from Kappa. Jill signs a con?tract with Micro Drives, a wholesale component supplier, allegedly on Kappa's behalf. Micro knows of Ira's dissociation. The contract is binding on

A corporation can be a partner.

In winding up a general partnership, partners receive distributions of profits before non-partner creditors are paid.

Fact Pattern 36-1B Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic. -Refer to Fact Pattern 36-1B. Brad, Carlos, and Dora decide to admit Faisal as a new partner in Eastside Physicians. Faisal's liability for partnership debts incurred before his admission is

Bret is a general partner in Capitol Realty, LLLP, a limited liability lim?ited partnership, which cannot pay its debts. Bret is personally li?able for the debts

Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid by

In a limited liability limited partnership, the liability of a general part?ner is the same as the liability of a limited partner.

Jay is considering forms of business organization for Jay's Designs, an ar?chitectural firm. An advantage of a limited liability partnership is that partners can avoid personal liability for

In a family limited liability partnership, only persons related to each other may be partners.

Energy Unlimited, LP, is a limited partnership to which its partners, in?cluding Fink, have contributed capital. Energy's creditors include Graves Engineering, Inc. On Energy's dissolution, its assets will be distributed to pay

Jack and Kyra are partners in Law Firm, LLP, a limited liability partnership. Jack supervises Kyra, who negligently fails to appear in court on behalf of Milo, a client. Liability to Milo rests with

Any limit on a partner's capacity to act on the partnership's behalf does not affect a third party who does not know about it.

A partner may use and possess partnership property for any purpose.

The Uniform Partnership Act has done much to reduce controversies in the law relating to partnerships.

A limited liability partnership can be formed in virtually any state.

Fern and Gray want to form a limited partnership to manage two restaurants: Café Latte and Delite Deli. In most states, a limited partnership will be created when

A partner owes a partnership and its partners a duty of gross negligence and reckless conduct.

A partnership for a definite term cannot be dissolved before the expiration of the term.

Dill and Edy form a partnership. Edy's capital contribution is $10,000, and Dill's is $15,000. The partnership agreement provides that profits are to be shared, with 40 percent for Edy and 60 percent for Dill. Later, Edy 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?

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