Deck 21: Forms of Business Organization

Question 1

No partnership is created based upon an employer sharing profits with an employee as payment for work.

Answer 1

True
Explanation: When an employer shares profits with an employee as payment for work, there is no partnership.

Question 2

During the winding-up process, the partners must still fulfill their fiduciary duty to one another in the sense that they must disclose all information about the partnership assets.

Answer 2

True
Explanation: During the winding up, the partners must still fulfill their fiduciary duty to one another, in the sense that they must disclose all information about the partnership assets.

Question 3

A partner being expelled from the partnership in accordance with the partnership agreement is not a reason for rightful dissolution of the partnership.

Answer 3

False
Explanation: A partnership may be rightfully dissolved based upon a partner being expelled form the partnership in accordance with the partnership agreement.

Question 4

If a partner dissolves a partnership in violation of the partnership agreement, the partner can be held liable for wrongful dissolution.

Question 5

Before a partnership may be terminated, the partnership must experience the winding-up stage, but not the dissolution stage.

Question 6

When a partnership is dissolved based upon the withdrawal of a partner, that partner no longer has actual authority to bind the partnership.

Question 7

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

Question 8

In the case of a limited partnership, if the partners do not correctly fill out or do not file the certificate of limited partnership with the secretary of state, the limited partners will not receive limited liability.

Question 9

The implied authority of partners is determined by the partnership agreement.

Question 10

Only officers in a limited liability company have a say in the management of the company.

Question 11

Remaining partners have a right to continue a partnership after dissolution.

Question 12

Federal law prohibits partnership by estoppel.

Question 13

During the winding-up process, the partners may not engage in a business that competes with the partnership business.

Question 14

Every partner is considered to be an agent of the partnership.

Question 15

Unless otherwise stated in the partnership agreement, even if one partner has an unusually large proportion of the management duties, each partner will have one vote in determining how the partnership is managed.

Question 16

A general partner has unlimited personal liability for the debts of the limited partnership.

Question 17

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

Question 18

If a partner has authority to act and the partnership is bound by the act, each partner has unlimited personal liability for the obligation.

Question 19

Title to property may not be put in the name of a partnership.

Question 20

If one partner pays an entire judgment for a tort for which the partnership is liable, other partners have no legal obligation to indemnify that partner.

Question 21

Which of the following bring foreign information and communication technology companies into a partnership and serve as hubs?

A) Keiretsus
B) Stares
C) In rems
D) Res ipsas
E) Internal groups

Question 22

Which of the following is true regarding the treatment of a partnership as a legal entity?

A) A partnership is often considered a legal entity when it is sued or being sued.
B) State law determines whether a partnership can or cannot be named in litigation.
C) Title to property can be put in the partnership name.
D) A partnership is often considered a legal entity when it is sued or being sued, state law determines whether a partnership can or cannot be named in litigation, and title to property can be put in the partnership name.
E) A partnership is often considered a legal entity when it is sued or being sued and state law determines whether a partnership can or cannot be named in litigation, but title to property cannot be put in the partnership name.

Question 23

Which of the following may be a "person" under the Uniform Partnership Act?

A) Individuals only
B) Partnerships and individuals
C) Partnerships, individuals, and corporations
D) Partnerships, individuals, corporations, and other associations
E) Partnerships, individuals, and other associations, but not corporations.

Question 24

Which of the following is a way that a person not named in a partnership agreement may be considered a partner?

A) Partnership by common.
B) Partnership by assumption.
C) Partnership by estoppel.
D) Partnership by equity.
E) None of these because a person not named in a partnership agreement may not be considered a partner.

Question 25

When the articles of partnership are silent, which of the following property rights do partners have?

A) The right to participate in the management of the business.
B) The right to specific partnership property.
C) The right to his or her partnership interest.
D) The right to participate in the management of the business, the right to specific partnership property, and the right to his or her partnership interest.
E) The right to participate in the management of the business and the right to specific partnership property, but not the right to his or her partnership interest.

Question 26

Payment for which of the following fails to establish a partnership?

A) A debt
B) An annuity to a widow or representative of a deceased partner
C) Payment from the sale of goodwill of a business or other property
D) Payment of interest on a loan
E) All of these

Question 27

Partners own partnership property as ______________, meaning that the partners own the property as a group.

A) Tenants in property
B) Joint tenants
C) Tenants in the entirety
D) Tenants in common
E) Partnership tenants

Question 28

Which of the following is false regarding duties of partners to one another?

A) They have a duty to be loyal to one another.
B) They have a fiduciary duty to one another.
C) They should not take any kind of action that will undermine the partnership.
D) They may engage in a competing business only if the competing business does not result in significant losses to the partnership.
E) They must disclose any material facts affecting the business to one another.

Question 29

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

A) The right is composed of a combination of the partner's share of the profits and a return of capital contributed by the partner.
B) The right is composed only of the partner's share of profits.
C) The right is composed only of the partner's right to return of capital contributed by the partner.
D) The right is composed only of the partner's right to return of capital contributed by the partner and any wages due.
E) A partner has no right to an interest in the partnership.

Question 30

What is a written agreement that creates a partnership called?

A) Contract of partnership
B) Contract of agreement
C) Partnership articles
D) Articles of partnership
E) Clauses of partnership agreement

Question 31

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

A) A joint operation
B) A combined partnership
C) A partnership
D) A joint business arrangement
E) A primary partnership

Question 32

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

A) The right to share in management.
B) The right to share in profits.
C) The right to compensation for devoting time to the business.
D) The right to share in management, the right to share in profits, and the right to compensation for devoting time to the business.
E) The right to share in management and the right to share in profits, but not the right to compensation for devoting time to the business.

Question 33

Unless it is otherwise agreed in the articles of partnership, which of the following is true regarding the rights of partners to share in profits?

A) All partners have a right to share profits equally.
B) Partners share in profits in proportion to the amount of capital contributed to the partnership.
C) Partners share in profits in proportion to the amount of work done for the partnership.
D) Partners share in profits in proportion to their seniority with the partnership with partners of equal seniority sharing equally in profits.
E) None of these. There is no partnership unless the articles of partnership specifically address the way in which profits are allocated.

Question 34

When the articles of partnership do not address the matter, which of the following require unanimous agreement among the partners?

A) A decision to change some element of the partnership agreement.
B) A decision to admit a new partner.
C) A decision to alter the nature of the firm's business.
D) A decision to change some element of the partnership agreement, a decision to admit a new partner, and a decision to alter the nature of the firm's business.
E) A decision to change some element of the partnership agreement and a decision to admit a new partner, but not a decision to alter the nature of the firm's business.

Question 35

Which of the following is false regarding partnership property rights?

A) Any property brought into the partnership is considered property of the partnership.
B) Any property acquired by the partnership is considered property of the partnership.
C) Any property in the name of an individual partner that was purchased with partnership funds is considered partnership property.
D) A partner may use partnership property to pay a personal debt.
E) Each partner has the right to possess partnership property.

Question 36

Which of the following are included within the duty partners hold to one another to be loyal?

A) The fiduciary duty to other partners.
B) The duty of obedience.
C) The duty of care.
D) The fiduciary duty to other partners, the duty of obedience, and the duty of care.
E) The fiduciary duty to other partners and the duty of care, but not the duty of obedience.

Question 37

When the articles of partnership do not address the matter, which of the following is true regarding a partner's right to sell a partnership interest to a creditor?

A) A partner can sell his or her interest in a partnership to a creditor.
B) A partner cannot sell any of his or her interest in a partnership to a creditor.
C) A partner can sell only up to 75% of his or her interest in a partnership to a creditor.
D) A partner can sell only up to 50% of his or her interest in a partnership to a creditor.
E) A partner can sell only up to 25% of his or her interest in a partnership to a creditor.

Question 38

Which of the following is true regarding the liability of a partner for a mistake?

A) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is not held personally liable for the mistake.
B) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent of his or her capital contribution.
C) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in profits.
D) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in losses.
E) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held fully personally liable for the mistake.

Question 39

Unless it is otherwise agreed in the articles of partnership, which of the following is true regarding the rights of partners to share in the management of a partnership?

A) All partners have a right to participate equally in the management of the partnership.
B) Partners share in management in proportion to the amount of capital contributed to the partnership.
C) Partners share in management in proportion to the amount of work done for the partnership.
D) Partners share in management in proportion to their seniority with the partnership with partners of equal seniority sharing equally in management.
E) None of these. There is no right to share in management unless the articles of partnership specifically address management rights.

Question 40

Which of the following does the duty of obedience that one partner owes to another reference?

A) The duty to obey instructions of any other partner.
B) The duty to keep other partners informed of the finances of the partnership.
C) The duty to keep other partners informed of partnership debts.
D) The duty to obey the partnership agreement.
E) The duty to reimburse the partnership for any personal expenditures.

Question 41

Which of the following terms is used when a partner dissolves a partnership in violation of the partnership agreement?

A) Wrongful termination
B) Untimely termination
C) Wrongful dissolution
D) Prohibited termination
E) Prohibited dissolution

Question 42

Which of the following is defined as the change in the relation of the partners caused by any partner's ceasing to be associated with the carrying on, as distinguished from the winding up, of the business?

A) Resolution
B) Dissolution
C) Resignation
D) Suspension
E) Transformation

Question 43

Under the Uniform Partnership Act, in regard to an agreement with a third party, which of the following is true under the regarding personal liability of partners for obligations of the partnership?

A) If the partnership is liable, each individual partner has unlimited personal liability.
B) If the partnership is liable, each individual partner only has personal liability in proportion to the number of partnership members.
C) If a partnership is liable, each individual partner only has personal liability in proportion to the way in which profits are allocated.
D) If a partnership is liable, each individual partner only has personal liability in proportion to the way in which losses are allocated.
E) Individual partners do not have personal liability for obligations of a partnership.

Question 44

Which of the following is true if a partner wrongfully dissolves a partnership?

A) The partner who wrongfully dissolved the partnership cannot require that the business be wound up.
B) The partner can be held liable for damages to the remaining partners.
C) The remaining partners can choose to continue the business under the partnership name or to wind up the business.
D) The partner who wrongfully dissolved the partnership cannot require that the business be wound up, the partner can be held liable for damages to the remaining partners, and the remaining partners can choose to continue the business under the partnership name or to wind up the business.
E) The partner can be held liable for damages to the remaining partners, but he remaining partners cannot choose to continue the business under the partnership name.

Question 45

Under which of the following circumstances may a partnership be dissolved by an act of court?

A) When a partner is adjudicated insane
B) When it becomes impractical to carry out the business of the partnership
C) If a partner is incapable of carrying out his or her duties as established by the partnership agreement
D) When a partner is adjudicated insane, when it becomes impractical to carry out the business of the partnership, and if a partner is incapable of carrying out his or her duties as established by the partnership agreement
E) When a partner is adjudicated insane and if a partner is incapable of carrying out his or her duties as established by the partnership agreement, but not because it becomes impractical to carry out the business of the partnership

Question 46

Which of the following was the ruling of the court on appeal in the case of In re Leah Beth Woskob, Debtor; Alex Woskob; Helen Woskob; the Estate of Victor Woskob v. Leah Beth Woskob, the case in the text involving a dispute regarding whether a partnership was dissolved prior to the death of one of the partners?

A) That the exclusion of a partner from the partnership was grounds for automatic dissolution and that, on that basis, the partnership had been dissolved prior to the death.
B) That the bankruptcy of one of the partners resulted in automatic dissolution of the partnership prior to the death.
C) That the partnership was dissolved prior to the death because of either the exclusion of a partner from the partnership or the filing for bankruptcy by one of the partners.
D) That by agreement of the partners, the partnership had been dissolved prior to the death.
E) That the partnership had not been dissolved at the time of the death of one of the partners.

Question 47

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

A) In a safety deposit box at the bank used by the partnership.
B) At the home of the managing partner.
C) At the location of the partnership's principal business office.
D) At the location of the partnership's oldest business office.
E) At the location of the partnership's newest business office.

Question 48

For which of the following reasons may a partner demand an accounting?

A) Whenever the copartners wrongfully exclude a partner from the partnership or from access to the books.
B) Whenever any partner fails to disclose a profit or benefit from the partnership.
C) Whenever circumstances render an accounting as "just and reasonable."
D) Whenever the copartners wrongfully exclude a partner from the partnership or from access to the books, whenever any partner fails to disclose a profit or benefit from the partnership, and whenever circumstances render an accounting as "just and reasonable."
E) Whenever the copartners wrongfully exclude a partner from the partnership or from access to the books, and whenever any partner fails to disclose a profit or benefit from the partnership, but not whenever circumstances render an accounting as "just and reasonable."

Question 49

Which of the following is false regarding the rights and obligations of partners?

A) Each partner can serve as an agent for the partnership.
B) As long as the partner has authority to act, each partner's act in performing business duties is binding on the partnership.
C) As long as the partner has authority to act, each partner's act in making agreements with third parties is binding on the partnership.
D) As long as one partner has authority to act and the partnership is bound by the act, each partner has unlimited personal liability for the obligation.
E) A partner cannot serve as an agent for other partners.

Question 50

Which of the following is a reason for a provisional dissolution of a partnership in Spain?

A) A partner fails to comply with provisions of the contract.
B) A partner unexplainably abandons the partnership and does not return on request.
C) A partner fails to bring the capital he or she promised.
D) A partner is accused of fraud or mismanagement.
E) All of these.

Question 51

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

A) A creditor may do so only after giving all partners at least 90 days advance notice.
B) A creditor may do so only after giving all partners at least 60 days advance notice.
C) A creditor may do so only after giving all partners at least 30 days advance notice.
D) A creditor may seize specific items of partnership property only if the items are located in the office of the creditor involved.
E) A partner's personal creditor may not seize specific items of partnership property.

Question 52

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

A) A partner has a right to copy partnership records.
B) A partner does not have a right to copy any partnership records.
C) A partner only has a right to copy partnership records that are not marked "confidential."
D) A partner only has a right to copy partnership records that are not marked "confidential" and that are not being used in litigation.
E) A partner only has a right to copy partnership records that directly impact that partner's right to profits.

Question 53

Which of the following may cause the dissolution of a partnership?

A) An act of the partners.
B) An operation of the law.
C) An act of the court.
D) An act of the partners, an operation of the law, and also an act of the court.
E) An act of the partners and an operation of the law, but not an act of the court.

Question 54

Which of the following is a type of partnership that does not specify the objective or duration of the partnership?

A) A partnership at will
B) A partnership at sufferance
C) An indeterminate partnership
D) A temporary partnership
E) None of these. A partnership cannot exist unless either the objective or duration is stated.

Question 55

When is the dissolution state of a partnership considered complete?

A) Only when any partner, by choice, stops fulfilling the role of a partner to the business.
B) Only when any partner, by default, stops fulfilling the role of a partner to the business.
C) When any partner, by choice or by default, stops fulfilling the role of a partner to the business.
D) Thirty days after any partner, by choice or by default, stops fulfilling the role of a partner to the business.
E) Thirty days after any partner, by default, stops fulfilling the role of a partner to the business.

Question 56

Which of the following is true regarding the liability of incoming partners?

A) The new partner is personally liable for all outstanding obligations as of the time that the new partner entered the partnership.
B) The new partner is personally liable for only 50% of outstanding obligations as of the time that the new partner entered the partnership.
C) The new partner is personally liable for only 10% outstanding obligations as of the time that the new partner entered the partnership.
D) The new partner is personally liable proportionately based on the number of partners for outstanding obligations as of the time that the new partner entered the partnership.
E) The new partner is not personally liable for outstanding obligations of the partnership as of the date the new partner entered the partnership.

Question 57

Which of the following dissolve a partnership by operation of law?

A) Death of a partner.
B) The partnership's engagement in an activity that suddenly becomes illegal.
C) A partner's engagement in any other business activity.
D) Death of a partner, the partnership's engagement in an activity that suddenly becomes illegal, and a partner's engagement in any other business activity.
E) Death of a partner and the partnership's engagement in an activity that suddenly becomes illegal, but not a partner's engagement in any other business activity.

Question 58

Which of the following entitles a creditor to a partner's profits?

A) A garnishment order
B) A charging order
C) A reimbursement order
D) An accounting order
E) An entitlement order

Question 59

Which of the following stages must be experienced before the termination of a partnership may be considered complete?

A) Dissolution
B) Winding-up
C) Release of claims
D) Dissolution, winding-up, and release of claims
E) Dissolution and winding-up, but not release of claims

Question 60

Which of the following is true regarding the implied authority of partners?

A) Partners generally have greater implied authority than typical agents.
B) The implied authority of partners is usually determined by the nature of the business.
C) A partner does not have implied authority to sell any partnership property without the consent of all other partners.
D) Partners generally have greater implied authority than typical agents, the implied authority of partners is usually determined by the nature of the business, and a partner does not have implied authority to sell any partnership property without the consent of all other partners.
E) The implied authority of partners is usually determined by the nature of the business, and a partner does not have implied authority to sell any partnership property without the consent of all other partners, but partners have less authority than typical agents.

Question 61

Which of the following was the result on appeal in Tafoya v. Perkins, the case in the text in which the court addressed the applicable statute of limitations after the plaintiff filed suit demanding an accounting and alleged that the defendant breached her fiduciary duty?

A) The court ruled that the plaintiff filed the case within the statute of limitations because there was no time limit on such suits.
B) The court found that federal law mandated that a statute of limitations of one year be applied and that the plaintiff failed to file the lawsuit within that amount of time.
C) The court found that the applicable state statute of limitations was two years and that the plaintiff failed to file the lawsuit within that amount of time.
D) The court found that federal law mandated that a statute of limitations of three years be applied and that the plaintiff filed the lawsuit within that amount of time.
E) The court found that state law mandated that a statute of limitations of three years be applied and that the plaintiff filed the lawsuit within that amount of time.

Question 62

The Revised Uniform Limited Partnership Act provides that a limited partnership may be dissolved for which of the following reasons?

A) The expiration of the term established in the certificate of limited partnership.
B) The completion of the objective established in the certificate.
C) The unanimous written consent of all limited and general partners.
D) The withdrawal of the general partner unless the certificate establishes that other general partners will continue.
E) All of these.

Question 63

Which of the following must a limited partner do or refrain from doing in order to retain limited personal liability?

A) The limited partner must comply in good faith with the requirement that a certificate of limited partnership be filed.
B) The limited partner may not participate in the control of the business.
C) The limited partner's surname may not be a part of the partnership name.
D) The limited partner must comply in good faith with the requirement that a certificate of limited partnership be filed, the limited partner may not participate in the control of the business, and the limited partner's surname may not be a part of the partnership name.
E) The limited partner must comply in good faith with the requirement that a certificate of limited partnership be filed and the limited partner may not participate in the control of the business, but whether the limited partner's surname appears as a part of the partnership name is irrelevant to the issue of personal liability.

Question 64

Which of the following is true regarding silent partnerships in Germany?

A) They are illegal.
B) They are legal, but a silent partner is liable for any judgment entered against any other party; and the silent partner's identity must be revealed upon entry of judgment.
C) They are legal, and the silent partner is not held personally liable for damages incurred in the course of business.
D) They are legal, and the identity of the silent partner may remain secret so long as sufficient funds are placed in trust to cover any expected judgment against any partner involved.
E) They are legal, and the identity of the silent partner may remain secret so long as insurance is obtained to cover any expected judgment against any partner involved.

Question 65

Which of the following was the result on appeal in Eric Johnson & Lori Johnson v. St. Therese Medical Center, the case in the text in which partners of a physician found liable for negligence resisted payment of the judgment?

A) That the partners of the physician were not personally liable for the judgment because only the partnership was sued; and the individual partners did not, therefore, receive due process because they were not provided notice that their personal assets were at risk.
B) That the individual physicians were not liable because although they were sued in their individual capacities, the partnership itself was also sued and found liable; and the plaintiffs had acted unreasonably in failing to pursue assets of the partnership.
C) That the individual physicians, who were sued in their individual capacities, were not personally liable because insufficient evidence was presented of the partnership's insolvency.
D) That the individual physicians, who were sued in their individual capacities, were not personally liable because insufficient evidence was presented of the insolvency of the partner who committed the malpractice.
E) That the individual physicians were liable in their individual capacities.

Question 66

Reference - 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 agreement. 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; that she, therefore, had a majority of the voting rights; and 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?

A) Contract of partnership
B) Contract of agreement
C) Partnership articles
D) Articles of partnership
E) Clauses of the articles of partnership

Question 67

Which of the following is true regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

A) A partner has no actual authority to bind the partnership after the partnership is dissolved.
B) A partner has actual authority to bind the partnership for 10 days after the partnership is dissolved.
C) A partner has actual authority to bind the partnership for 30 days after the partnership is dissolved.
D) A partner has actual authority to bind the partnership for 45 days after the partnership is dissolved.
E) After a partnership is dissolved, a partner has actual authority to bind the partnership to any third party who has not been given notice of dissolution.

Question 68

In a dissolution of a partnership, if a noncontinuing partner holds 20% of the partnership in which assets after the payment of debt are valued at $10,000, how much will the partner receive?

A) $2,000
B) $1,000
C) $2,500
D) $3,000
E) Nothing

Question 69

Which of the following occurs during a provisional dissolution of a partnership in Spain?

A) The partnership is temporarily dissolved pending the outcome of litigation.
B) The accused is excluded from all managerial responsibilities and profits.
C) The accused is subject to liability for any business conducted by the partnership at issue during the time of provisional dissolution.
D) The partnership is temporarily dissolved pending the outcome of litigation, the accused is excluded from all managerial responsibilities and profits, and the accused is subject to liability for any business conducted by the partnership at issue during the time of provisional dissolution.
E) The partnership is temporarily dissolved pending the outcome of litigation and the accused is excluded from all managerial responsibilities and profits, but the accused is not subject to liability for business conducted by the partnership during the period of provisional dissolution.

Question 70

Which of the following is the term for the activity of completing unfinished partnership business, collecting and paying debts, collecting partnership assets, and taking inventory?

A) Closing up
B) Winding up
C) Delineating
D) Reallocating
E) Terminating

Question 71

Limited partnerships are also known as which of the following?

A) General partnerships
B) Limited liability partnerships
C) Special partnerships
D) Specific partnerships
E) Both limited liability partnerships and specific partnerships

Question 72

Reference - 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 agreement. 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; that she, therefore, had a majority of the voting rights; and 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?

A) She is correct.
B) She is correct but only because only three members are involved.
C) She is incorrect but only because fewer than five members are involved.
D) She is correct only if all partners have at least a college degree.
E) She is incorrect only if none of the partners have experience with the partnership form of business.

Question 73

Which of the following is an agreement stating that continuing partners can keep partnership property and carry on the partnership business?

A) A continuation agreement
B) A limitation agreement
C) A proceeding agreement
D) A forward agreement
E) A non-liquidation agreement

Question 74

A limited partnership is an agreement between at least ______ general partner[s] and at least ______ limited partner[s].

A) 5; 3
B) 5; 5
C) 1; 1
D) 2; 3
E) 2; 2

Question 75

Which of the following is true regarding partnership agreements in Russia?

A) Russian law recognizes one type of partnership, the full partnership.
B) Russian law recognizes one type of partnership, the simple partnership.
C) Russian law allows for oral partnership agreements.
D) Russian law recognizes full partnerships and simple partnerships, and partnership agreements may be made orally.
E) Russian law recognizes full partnerships and simple partnerships, and partnership agreements must be in writing.

Question 76

Which of the following is false regarding the winding-up process?

A) During the winding-up process, the partners must still fulfill their fiduciary duty to one another in the sense that they must disclose all information about the partnership assets.
B) During the winding-up process, the partners may not engage in any business that competes with the partnership business.
C) If a partnership has been rightfully dissolved, any partner can demand that the winding-up stage begin.
D) If a partner wrongfully dissolves a partnership, that partner has no right to demand a winding up.
E) The process of winding up involves the completion of business activities.

Question 77

Which of the following is true regarding the rights of general partners and limited partners?

A) A general partner has limited personal liability for the debts of the partnership.
B) The general partner typically has exclusive control and management of the limited partnership.
C) Limited partners have no right to an account of the partnership.
D) A general partner may add additional partners without the consent of limited partners.
E) General partners always recover their investment before limited partners.

Question 78

Reference - 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 agreement. 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; that she, therefore, had a majority of the voting rights; and 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. Did Sandra commit any breach of duty to the partnership?

A) Yes, she breached her fiduciary duty to the other partners.
B) Yes, she breached her duty of obedience to the other partners.
C) Yes, but only if the other partners can show that she made more income through doing the work on her own than she would have made if she had done the work through the partnership.
D) Yes, but only if the other partners can show that they could have done a better job on the resumes than did Sandra.
E) No, she did not breach any duty.

Question 79

Which of the following is true when upon dissolution of a partnership one partner pays liabilities of the partnership that are greater than the liquidated assets of the partnership?

A) The partner who paid has a right of contribution against any partner who did not pay.
B) The partner who paid has no right of contribution against any other partner.
C) The partner who paid has a right of contribution against other partners only if the partner who paid was not the managing partner.
D) The partner who paid has a right of contribution only against other partners who participated in the management of the partnership.
E) The partner who paid has a right of contribution only against other partners who did not participate in the management of the partnership.

Question 80

Which of the following is true regarding the origination of limited partnerships?

A) They originated in the United States approximately 50 years ago.
B) They originated in Europe over 500 years ago.
C) They originated in England approximately 200 years ago.
D) They originated in the United States approximately 200 years ago.
E) They originated in Mexico approximately 50 years ago.