Exam 37: B: Partnerships and Limited Liability Partnerships

Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge.Under their partnership agreement,Jerry-Bilt is to dissolve when the bridge is built.Iggy signs a contract for the firm to build a second bridge.Jerry-Bilt

A partner's profit from a partnership is taxed as income to the firm.

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

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

Sable and Rex agree while talking on the phone to form a partner?ship to deal in transfers of real property.Their partnership agreement is legally binding

Fact Pattern 37-1A Desi starts up eSites,an Internet service,and leases office space in a building owned by Fred.The lease requires Desi to pay Fred a base rental of $1,250,plus 10 percent of eSites' profits,each month.The term is two years.Desi hires Gwen to work at eSites' tech support desk at an hourly wage of $12.50,plus a commis?sion of 10 percent of the prof?its.The term is also two years. -Refer to Fact Pattern 37-1A.Desi and Fred are

A partner who pursues his or her own interests automatically violates the partner's fiduciary duties to the partnership.

Fact Pattern 37-1A Desi starts up eSites,an Internet service,and leases office space in a building owned by Fred.The lease requires Desi to pay Fred a base rental of $1,250,plus 10 percent of eSites' profits,each month.The term is two years.Desi hires Gwen to work at eSites' tech support desk at an hourly wage of $12.50,plus a commis?sion of 10 percent of the prof?its.The term is also two years. -Refer to Fact Pattern 37-1A.Desi and Gwen are

Noah and Orin do business as Pest Control Partners.In most states,for the purposes of suing and being sued,Pest Control Partners would be treated as

Withdrawal from a partnership for a term prematurely does not constitute a breach of the partnership agreement.

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

Under no circumstances can a non-partner be regarded as an agent whose acts are binding on the partnership.

A partner owes to the partnership and the other partners a duty of loyalty.

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

Fact Pattern 37-2A Luann and Mace are partners in Networx,a computer peripherals firm. -Refer to Fact Pattern 37-2A.Mace dissociates from Networx.Luann signs a con?tract with Physik Drives,a wholesale component supplier,apparently on Networx's behalf.Physik does not know of Mace's dissociation.The contract is binding on

An association cannot be a partnership without an express agreement.

Federal law permits a partnership to be treated as an entity in suits in federal courts.

Rona and Savannah do business as Treasure Island Traders.In acting on the firm's behalf in a deal with Unlimited Potential,Inc. ,Rona makes an honest error in overestimating the profit.To her firm,Rona is

An assignment of the interest of a limited partner dissolves a limited partnership.

International Exports,L.P. ,is a limited partnership,with $100,000 in de?clared but unpaid profits.International's creditors include Friendly Credit Corporation for $5,000 and Gwen,one of International's limited partners,also for $5,000.When Harry,one of International's general partners,de?cides to retire,the other general partners vote to liquidate and dissolve the firm.The limited partners,who are not asked their opinions,want Interna?tional to continue in business and file a suit against the general partners to compel this result.Can the court order International to continue? If not,what is the priority of the distribution of International's assets on its dissolution?