Exam 36: Partnerships: Nature, Formation, and Operation

"Partnership Disruption." Bruce, Sandra, and Minnie want to form a partnership to assist students with resume preparation and employment searches. Bruce asks Sandra and Minnie if they should draw up some sort of agreement. Sandra replies that a written agreement is not legally required and that an oral agreement will set up a partnership. Upon the urging of Bruce and Minnie, however, Sandra agreed to a written document which they all signed setting up the partnership. It was a simple agreement listing the partners that did not specifically address the right to management or allocation of profits and losses. Sandra has an opportunity to assist some students with resumes and does so without revealing her employment to the partnership. She keeps the funds she receives for herself. When Bruce and Minnie found out, Sandra replied that she was doing two-thirds of the partnership work, particularly in regard to management; that she, therefore, had two-thirds of the voting rights; and that she voted that her actions were appropriate. The articles of partnership did not address the right to share in management, but Bruce and Minnie strongly disagreed with Sandra. -Which of the following is true regarding Sandra's statement that a written agreement is not necessary to set up a partnership?

Which of the following is an association of two or more persons to carry on as co-owners a business for profit?

Which of the following represents a partner's right to an interest in the partnership?

Unless otherwise agreed by the partners, where are records of the partnership to be kept?

"Partnership Disruption." Bruce, Sandra, and Minnie want to form a partnership to assist students with resume preparation and employment searches. Bruce asks Sandra and Minnie if they should draw up some sort of agreement. Sandra replies that a written agreement is not legally required and that an oral agreement will set up a partnership. Upon the urging of Bruce and Minnie, however, Sandra agreed to a written document which they all signed setting up the partnership. It was a simple agreement listing the partners that did not specifically address the right to management or allocation of profits and losses. Sandra has an opportunity to assist some students with resumes and does so without revealing her employment to the partnership. She keeps the funds she receives for herself. When Bruce and Minnie found out, Sandra replied that she was doing two-thirds of the partnership work, particularly in regard to management; that she, therefore, had two-thirds of the voting rights; and that she voted that her actions were appropriate. The articles of partnership did not address the right to share in management, but Bruce and Minnie strongly disagreed with Sandra. -Which of the following is correct regarding Sandra's statement to the effect that she had greater management rights because she was doing a greater percentage of work for the partnership?

Which of the following is true under the Uniform Partnership Act, regarding profit and partnerships?

For which of the following is false regarding when a partner may demand an accounting?

A partner who refuses to obey the articles of partnership may be held liable for any losses that the partnership incurs.

Which of the following is true regarding the right of a personal creditor of a partner to seize specific items of partnership property?

Which of the following is true regarding a partner's right to copy partnership records?

In regard to developing countries which of the following is not true regarding offshore partnerships?

As set forth in the text, list the types of information that articles of partnership usually include.

Which of the following is true under the Uniform Partnership Act regarding personal liability of partners for obligations of the partnership when the partnership itself is liable?

Which of the following is a way that a person may be held liable as a partner without actually being named as a partner in a partnership agreement?

Unless otherwise agreed in the articles of partnership, which of the following is true regarding rights partners have in regard to their interactions with other partners?

If no partnership agreement exists, which of the following generally establishes the rules for the partnership?

"Grooming Losses." Wally, Beverly, and Matthew formed a partnership to groom dogs. Because they were good friends and anticipated making a profit sufficient to compensate all partners well, the articles of partnership did not allocate profit or losses. Beverly was appointed managing partner. Unfortunately, the business did not go as well as expected and the partnership incurred some losses. Matthew claimed that he should not have to share in losses because he had groomed more dogs than anyone. Matthew also claimed that although the partnership did not reference compensation for additional duties, he was entitled to compensation because of his excessive work. Beverly claimed that she should not have to share in losses because she contributed more capital than did either of the others. Wally claimed that he should not have to cover the losses because both Beverly and Matthew had been hiding the books from him. He demanded to inspect the books and also to review a listing of all partnership assets and profit statements listing distributions to partners. Beverly and Matthew denied that they had been hiding the books and claimed complete innocence of any wrongdoing. -Which of the following is correct regarding Matthew's claim to additional compensation based upon the amount of work he was doing?

What is a written agreement that creates a partnership called?

Joint and several liability means that partners must be sued jointly.

"Partnership Disruption." Bruce, Sandra, and Minnie want to form a partnership to assist students with resume preparation and employment searches. Bruce asks Sandra and Minnie if they should draw up some sort of agreement. Sandra replies that a written agreement is not legally required and that an oral agreement will set up a partnership. Upon the urging of Bruce and Minnie, however, Sandra agreed to a written document which they all signed setting up the partnership. It was a simple agreement listing the partners that did not specifically address the right to management or allocation of profits and losses. Sandra has an opportunity to assist some students with resumes and does so without revealing her employment to the partnership. She keeps the funds she receives for herself. When Bruce and Minnie found out, Sandra replied that she was doing two-thirds of the partnership work, particularly in regard to management; that she, therefore, had two-thirds of the voting rights; and that she voted that her actions were appropriate. The articles of partnership did not address the right to share in management, but Bruce and Minnie strongly disagreed with Sandra. -What is the written agreement creating the partnership entered into by Bruce, Sandra, and Minnie called?