Question 1

Under RUPA,certain types of profit sharing,such as the repayment of a debt,not rise to the level needed to create a partnership.

Accepted Answer

A) True 
 B)False

Question 2

The RUPA has eliminated:

Accepted Answer

A) all management rights enjoyed by partners. 
B) the concept of tenancy in partnership. 
C) partnership entity status. 
D) each partner's interest in the firm.

Question 3

Jack has an auto accident while on business for Small Enterprises,an RLLP consisting of Jack and Alex.Who is liable for damages resulting from the auto accident?

Accepted Answer

A) Small Enterprises only 
B) Jack only 
C) Jack and Alex only 
D) Small,Jack,and Alex

Question 4

One of the main disadvantages of the sole proprietorship is that the owner has unlimited liability.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an advantage of a sole proprietorship?

Accepted Answer

A) The owner of a sole proprietorship has no liability. 
B) The owner of a sole proprietorship has complete control over the business. 
C) The sole proprietorship's existence does not depend entirely upon the sole proprietor. 
D) Owners of sole proprietorships can raise a lot of cash quickly for expansion purposes.

Question 6

Due to a typing mistake,Delta,a limited partner in Derby Limited Partnership,is identified in the certificate of limited partnership as a general partner.Discuss how this error should be corrected.

Accepted Answer

The answer of Due to a typing mistake,Delta,a limited partner...

Question 7

Mia works as an assistant in a pharmacy.Her receipt of monthly wages,by itself,makes her a partner in the pharmacy.

Accepted Answer

A) True 
 B)False

Question 8

Alan and Delen enter into a partnership agreement with a $10,000 capital contribution.Six months later,Delen loans Alan $1,000.The loan is a:

Accepted Answer

A) partnership capital contribution. 
B) loan to the partnership,rather than to Alan. 
C) loan to both the partnership and to Alan. 
D) personal loan to Alan only.

Question 9

John knows that The Franklin Enterprises Partnership,in which John is a partner,is interested in purchasing a particular tract of land for a business location.Can John lawfully have his aunt buy the land,so that she may resell the land to Franklin Partnership?

Accepted Answer

A) No,it violates John's duty of care. 
B) Yes,assuming the price to Franklin was a fair market price. 
C) No,it violates John's duty of loyalty. 
D) Yes,the aunt is not a Franklin partner and has no loyalty to it.

Question 10

A term partnership is one that any partner may leave without liability.

Accepted Answer

A) True 
 B)False

Question 11

A limited liability is the easiest business organization to form.

Accepted Answer

A) True 
 B)False

Question 12

Tom,Lori,Joseph,and Carol agree to do business together,but haven't agreed on anything about profits.The group appoints Tom as 'leader.' A court would consider Tom's appointment by itself as clear evidence of a partnership.

Accepted Answer

A) True 
 B)False

Question 13

Under RUPA,a ________ takes place whenever a partner is no longer associated with the running of the firm.

Accepted Answer

A) dissolution 
B) dissociation 
C) rescission 
D) devolution

Question 14

Charlotte is declared mentally incompetent by a court and is unable to participate as a partner in AMLAP Enterprises.Charlotte wants to leave the AMLAP partnership,but is contractually obligated for three more years.Can Charlotte leave the AMLAP partnership?

Accepted Answer

A) Yes,she can do so without any liability to the partnership. 
B) No,there is no right to leave. 
C) Yes,she has a right to leave,but is liable for breach of contract. 
D) No,there is no right to leave unless all the partners agree.

Question 15

Jean and Bert enter into a written agreement to establish their partnership.Under RUPA,the written agreement has to specify that their partnership has a continuity of existence.

Accepted Answer

A) True 
 B)False

Question 16

John,Sam,and Mark decided to form a limited partnership (LP)with John being the general partner,and Sam and Mark as limited partners.The LP is sued and the court awards $100,000 against the LP.All three partners are jointly and severally liable.

Accepted Answer

A) True 
 B)False

Question 17

Jackie is interested in the property of the Big Partnership,in which Jackie is a full partner.She wants to mortgage the property in order to collateralize loans for the organization.However,not all the partners agree with Jackie.What is Jackie's legal position with regard to the mortgage under UPA?

Accepted Answer

A) Her partners' non-agreement is legally irrelevant. 
B) Jackie's interest in the partnership property cannot be assigned. 
C) Jackie can mortgage her share of the organization's property. 
D) UPA does not address this issue,and a court will decide on a case by case basis.

Question 18

Under the RUPA,a term partnership dissociation occurs when a partner files bankruptcy.

Accepted Answer

A) True 
 B)False

Question 19

Under the RUPA,a partnership:

Accepted Answer

A) has continuity of existence. 
B) is considered an entity in all situations. 
C) is no longer viewed as an aggregate in relation to liability. 
D) has no liability for the obligations made by its partners.

Question 20

When forming a limited partnership,it is critical to know that:

Accepted Answer

A) general partners have limited liability for the firm's debts. 
B) a certificate of limited partnership must be filed with the Secretary of State's office. 
C) limited partners are participating investors. 
D) general partners can only take a limited part in the management of the firm.

Exam 25: The Business Entity: an Introduction

Under RUPA,certain types of profit sharing,such as the repayment of a debt,not rise to the level needed to create a partnership.

The RUPA has eliminated:

Jack has an auto accident while on business for Small Enterprises,an RLLP consisting of Jack and Alex.Who is liable for damages resulting from the auto accident?

One of the main disadvantages of the sole proprietorship is that the owner has unlimited liability.

Which of the following is an advantage of a sole proprietorship?

Due to a typing mistake,Delta,a limited partner in Derby Limited Partnership,is identified in the certificate of limited partnership as a general partner.Discuss how this error should be corrected.

Mia works as an assistant in a pharmacy.Her receipt of monthly wages,by itself,makes her a partner in the pharmacy.

Alan and Delen enter into a partnership agreement with a $10,000 capital contribution.Six months later,Delen loans Alan $1,000.The loan is a:

John knows that The Franklin Enterprises Partnership,in which John is a partner,is interested in purchasing a particular tract of land for a business location.Can John lawfully have his aunt buy the land,so that she may resell the land to Franklin Partnership?

A term partnership is one that any partner may leave without liability.

A limited liability is the easiest business organization to form.

Tom,Lori,Joseph,and Carol agree to do business together,but haven't agreed on anything about profits.The group appoints Tom as 'leader.' A court would consider Tom's appointment by itself as clear evidence of a partnership.

Under RUPA,a ________ takes place whenever a partner is no longer associated with the running of the firm.

Charlotte is declared mentally incompetent by a court and is unable to participate as a partner in AMLAP Enterprises.Charlotte wants to leave the AMLAP partnership,but is contractually obligated for three more years.Can Charlotte leave the AMLAP partnership?

Jean and Bert enter into a written agreement to establish their partnership.Under RUPA,the written agreement has to specify that their partnership has a continuity of existence.

John,Sam,and Mark decided to form a limited partnership (LP)with John being the general partner,and Sam and Mark as limited partners.The LP is sued and the court awards $100,000 against the LP.All three partners are jointly and severally liable.

Jackie is interested in the property of the Big Partnership,in which Jackie is a full partner.She wants to mortgage the property in order to collateralize loans for the organization.However,not all the partners agree with Jackie.What is Jackie's legal position with regard to the mortgage under UPA?

Under the RUPA,a term partnership dissociation occurs when a partner files bankruptcy.

Under the RUPA,a partnership:

When forming a limited partnership,it is critical to know that: