Question 1

A partner has the power to dissociate at any time by expressing the intent to withdraw.

Accepted Answer

A) True 
 B)False  True

Question 2

Jacob dissociates from the Applegate Partnership, which continues to operate. Discuss Jacob's authority to act for the partnership after his dissociation and his possible liability under the RUPA to the partnership or third parties for transactions entered on behalf of the partnership.

Accepted Answer

Jacob has no actual authority to act for Applegate after his dissociation. However, with regard to apparent authority, the RUPA provides that for two years after the dissociation Applegate is bound by Jacob's acts that would have bound it before his dissociation if the other party reasonably believed Jacob was then a partner and the other party did not have actual or constructive notice of his dissociation. Jacob is liable to Applegate for any damage caused to it arising from obligations he improperly incurred after he dissociated. Jacob is also liable personally to third parties for unauthorized obligations.

Question 3

A partner is criminally liable for the crimes of her partners.

Accepted Answer

A) True 
 B)False  False

Question 4

ABC Partnership agrees to hire an "errand runner" 20 hours per week for the summer. Alan, a partner, interviews a college student and decides to offer her the job. But she says she needs a 40-hour-a-week job, so Alan agrees to make it 40 hours. What result?

Accepted Answer

A)   ABC Partnership is not bound to hire her.
B)   ABC Partnership is bound to pay her for 40 hours per week.
C)   Alan is bound to pay her for 20 hours per week.
D)   Alan has to pay her for 40 hours per week.

Question 5

If a partner has paid more than his share of partnership losses, he has a right of contribution against the partners who have not paid their share.

Accepted Answer

A) True 
 B)False

Question 6

The liability of partners for a tort or breach of trust committed by any partner is unlimited, personal liability.

Accepted Answer

A) True 
 B)False

Question 7

Austin withdraws from a partnership and the remaining three partners decide to continue in business. Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

Accepted Answer

The answer of Austin withdraws from a partnership and the...

Question 8

The RUPA requires a central filing of a statement of partnership authority specifying the names of partners authorized to execute instruments transferring real property held in the name of the partnership.

Accepted Answer

A) True 
 B)False

Question 9

Notification to one partner of any matter relating to partnership affairs is effective immediately as notice to the partnership.

Accepted Answer

A) True 
 B)False

Question 10

Rose, Lily, and Thorne are partners in a florist shop. If Thorne engages in conduct that makes it not reasonably practicable to carry on the business, the partnership is dissolved by operation of law.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following describes the imposing of partnership duties and liabilities upon a person who is not a partner in an existing partnership by reason of his consenting to representation that he is a partner?

Accepted Answer

A)   Partnership by estoppel.
B)   Delectus personae .
C)   A fiduciary duty.
D)   Torts of partnership.

Question 12

Carolee, Joanna, and Ellen form Capital City Partnership. Carolee contributes expertise; Joanna, $15,000; and Ellen, $20,000. After a year, Joanna adds $12,000 as a loan. Ten years later, Capital owes $44,000 to creditors, total assets are $112,000, and the partners decide to dissolve the business. How will the assets be distributed under the UPA, and what will each partner receive?

Accepted Answer

The answer of Carolee, Joanna, and Ellen form Capital City...

Question 13

Upon dissolution, a partner still has authority to complete existing contracts.

Accepted Answer

A) True 
 B)False

Question 14

"Dissolution" of a partnership and "termination" of a partnership are synonymous.

Accepted Answer

A) True 
 B)False

Question 15

John, Samuel, and Jim are general partners in the development of an electric car. Jim pours all his money into the project, but it never seems to work out. Eventually the partnership and Jim cannot meet their daily obligations, and the partnership is dissolved. Jim files for bankruptcy. If the partnership assets are insufficient to pay all claims against the partnership:

Accepted Answer

A)   the trustee in bankruptcy must seek recovery of the deficiency first from John and Samuel.
B)   Jim is released from liability because of the bankruptcy proceedings.
C)   Jim's personal assets are not available for the partnership debts because he has limited liability.
D)   the bankruptcy court must follow the doctrine of marshaling of assets.

Question 16

General Widget's partnership assets amount to $34,000 after liquidation. Frank, Gene, and Hank, equal partners, each contributed $3,000 into the capital pool at the inception of the business. Gene later loaned the business $5,000. The partnership owes $23,000 to creditors for inventory. Under the UPA, what will Gene get in distribution, assuming there is no agreement on the distribution of profits?

Accepted Answer

A)   $5,000.
B)   $7,000.
C)   $8,000.
D)   $11,000.

Question 17

Authority that a third person, in view of the circumstances, the conduct of the parties, and a lack of notice or knowledge to the contrary, may reasonably consider to exist is known as:

Accepted Answer

A)   actual implied.
B)   apparent.
C)   actual express.
D)   authorized.

Question 18

Winding up involves all but which one of the following?

Accepted Answer

A)   Selling assets for cash.
B)   Collecting debts owed to the partnership.
C)   Taking orders for business.
D)   Paying creditors.

Question 19

Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Shannon:

Accepted Answer

A)   has no liability for partnership debts that existed at the time of her admission as a partner.
B)   is liable only to the extent of her capital contribution for partnership debts that occur after her admission as a partner.
C)   has unlimited personal liability for all partnership debts regardless of whether they were incurred before or after she became a partner.
D)   has unlimited personal liability for all partnership obligations that occur after she became a partner; she has liability to the extent of her capital contribution for obligations that existed at the time she became a partner.

Question 20

A person who represents himself to third persons as being a partner when in fact he is not, may have the liability of a partner.

Accepted Answer

A) True 
 B)False

Exam 31: Operation and Dissolution of General Partnerships

A partner has the power to dissociate at any time by expressing the intent to withdraw.

Jacob dissociates from the Applegate Partnership, which continues to operate. Discuss Jacob's authority to act for the partnership after his dissociation and his possible liability under the RUPA to the partnership or third parties for transactions entered on behalf of the partnership.

A partner is criminally liable for the crimes of her partners.

ABC Partnership agrees to hire an "errand runner" 20 hours per week for the summer. Alan, a partner, interviews a college student and decides to offer her the job. But she says she needs a 40-hour-a-week job, so Alan agrees to make it 40 hours. What result?

If a partner has paid more than his share of partnership losses, he has a right of contribution against the partners who have not paid their share.

The liability of partners for a tort or breach of trust committed by any partner is unlimited, personal liability.

Austin withdraws from a partnership and the remaining three partners decide to continue in business. Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

The RUPA requires a central filing of a statement of partnership authority specifying the names of partners authorized to execute instruments transferring real property held in the name of the partnership.

Notification to one partner of any matter relating to partnership affairs is effective immediately as notice to the partnership.

Rose, Lily, and Thorne are partners in a florist shop. If Thorne engages in conduct that makes it not reasonably practicable to carry on the business, the partnership is dissolved by operation of law.

Which of the following describes the imposing of partnership duties and liabilities upon a person who is not a partner in an existing partnership by reason of his consenting to representation that he is a partner?

Upon dissolution, a partner still has authority to complete existing contracts.

"Dissolution" of a partnership and "termination" of a partnership are synonymous.

Authority that a third person, in view of the circumstances, the conduct of the parties, and a lack of notice or knowledge to the contrary, may reasonably consider to exist is known as:

Winding up involves all but which one of the following?

Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Shannon:

A person who represents himself to third persons as being a partner when in fact he is not, may have the liability of a partner.