Deck 19: Partnership Operation and Termination

Question 1

The Uniform Partnership Act and the Revised Uniform Partnership Act do not dictate what relations among partners must be.

Answer 1

True

Question 2

As per the Revised Uniform Partnership Act RUPA),a partnership agreement may eliminate the duty of loyalty so as long as that is not manifestly unreasonable.

Answer 2

True

Question 3

Under both Uniform Partnership Act UPA)and Revised Uniform Partnership Act RUPA),contract liability of the partners is joint and several.

Answer 3

False

Question 4

Which of the following duties of the partners,that they owe each other,relates to the duty to act within the bounds of the authority or trust that has been extended?

A)Duty of embezzlement
B)Duty of obedience
C)Duty of derivative action
D)Duty of replevin
E)Duty to lost volume

Question 5

Timothy,Reuben,and John,three brothers,work in a partnership firm that specializes in organizing events for people.John's friend Sam visited their place of business and made some suggestions to John for the next event that he was handling.Timothy and Reuben were however,out on a business trip when Sam visited their place.John out of gratuity got Sam a gift out of the business account and asked him to join the partnership.This,at present,could not be possible because of the doctrine of _____.

A)delectus personae
B)corporation by estoppel
C)employment-at-will
D)family purpose
E)tenants in partnership

Question 6

_____ is the highest duty of good faith and trust,imposed on partners as to each other and the firm.

A)Embezzlement duty
B)Larceny duty
C)Escrow duty
D)Escheat duty
E)Fiduciary duty

Question 7

If no provision relating to the distribution of profits and losses is stated in the partnership agreement,then under RUPA Section 401b),"each partner is entitled to an equal share of the partnership profits and is chargeable with a share of the partnership losses in proportion to the partner's share of profits."

Question 8

According to the Uniform Partnership Act,creditors of the old partnership do remain as creditors of the new partnership.

Question 9

A person working for a partnership firm who is not a partner is an associate and usually gets only a salary.

Question 10

Under Revised Uniform Partnership Act RUPA),dissolution happens when RUPA requires the partnership to wind up and terminate.

Question 11

_____ is the theory that a new partner can only be admitted to a firm with the unanimous consent of all.

A)corporation by estoppel
B)employment-at-will
C)family purpose
D)delectus personae
E)tenants in partnership

Question 12

As per the Section 401d)of the Revised Uniform Partnership Act RUPA),a partner is entitled for remuneration for all the services performed by him for the partnership.

Question 13

The partnership firm is not liable,if a single partner disposes of the firm's goodwill.

Question 14

As per the Uniform Partnership Act,a partnership is terminated on dissolution.

Question 15

For tortuous acts,the partners are said to be jointly and severally liable under both Uniform Partnership Act UPA)and Revised Uniform Partnership Act RUPA),and the plaintiff may separately sue one or more partners.

Question 16

The freedom to select new partners is absolute.

Question 17

Specific property interest of a tenant in partnership vests in the surviving partners,not in the heirs.

Question 18

Ralph,a partner,doing partnership along with Gilbert and Vicky,during the course of the partnership,pays a sum of $4,000 to one of the suppliers out of his personal account.The partnership firm will have to pay back this amount to Ralph as per the partner's right to _____.

A)profits and losses
B)indemnification
C)compensation
D)management
E)derivative action

Question 19

A judgment creditor has the right to obtain a charging order.

Question 20

The Revised Uniform Partnership Act RUPA),generally,requires the judgment creditor to exhaust the partnership's assets before going after the separate assets of a partner.

Question 21

A court order that directs a partnership to pay a partner's judgment creditor the distribution that the partner would normally receive is called _____.

A)doctrine of estoppel
B)order of relief
C)proof of claim
D)performance bond
E)charging order

Question 22

State the ten different causes of dissociation.

Question 23

In the case of a partnership,_____ refers to finishing the business at hand,settling accounts,and terminating the firm.

A)dissociation
B)dissolution
C)dilution
D)renunciation
E)winding up

Question 24

Francis,Ricky,and Andrew had opened a bakery in partnership.During the course of their partnership,Ricky had taken a loan of $25,000 from Ryan for personal purposes which he defaulted.Ryan could obtain an)_____ from the court to secure his loan,directing the partnership to pay Ryan the distribution that Ricky would normally receive.

A)doctrine of estoppel
B)charging order
C)order of relief
D)proof of claim
E)performance bond

Question 25

Under the Uniform Partnership Act UPA),dissolution of a partnership is said to be by the operation of law when:

A)the partnership is at will and a partner wants to leave the organization.
B)the entire partnership becomes bankrupt.
C)the term of the partnership agreement has expired.
D)all the partners decide that it is preferable to dissolve than to continue.
E)the partners decide to discharge a partner though no provision permits them to do so.

Question 26

State atleast five duties that partners owe each other and five rights that each partner possesses.

Question 27

The Revised Uniform Partnership Act RUPA)uses the term _____ in lieu of the Uniform Partnership Act UPA)term "dissolution."

A)winding up
B)liquidation
C)termination
D)dissociation
E)dilution

Question 28

Under the Uniform Partnership Act,in which of the following cases would a dissolution occur?

A)When two partners get married.
B)When a case has been filed against one or more partners.
C)When a partner wants to leave the firm.
D)When a partner goes for a vacation of 15 days or more.
E)When a partner has mortgaged his interest against a loan from the bank.

Question 29

The _____ states that a business entity does not itself owe taxes on income; it only acts as a pass-through for its members to receive income.

A)conduit theory
B)estoppel theory
C)entity theory
D)concession theory
E)aggregate theory

Question 30

Ross,Molly,and Dave had opened a partnership firm.Dave mortgaged his interest in the partnership in return for a $10,000 loan from the bank.Under this circumstance,which of the following will hold true as per the Revised Uniform Partnership Act RUPA)?

A)It would cause dissolution of partnership.
B)It would entitle the bank to access the firm's information.
C)The bank would be entitled to participate in running the firm.
D)The bank would be entitled to receive whatever profits Dave would have received.
E)The bank would be entitled to inspect the books of accounts of the partnership firm.

Question 31

Under the Uniform Partnership Act,what are the five actions that no single partner has implied or apparent authority to do and hence cannot hold the firm liable?

Question 32

Abby,Igor,Ted,and Tim were operating a restaurant in partnership.Ted received a letter from his university offering him an opportunity to teach the other students.Since,Ted always wanted to teach,he left the partnership.The partnership firm wanted to announce that Ted was no longer their partner since Ted had been handling a lot of purchases and dealing with some big customers.Which of the following statements could they file in order to do so?

A)Statement of partnership authority
B)Statement of dissolution
C)Statement of dissociation
D)Statement of denial
E)Statement of liquidation