Question 1

A & K Inc.obtains a charging order against Bob,a partner in Foter and Poter Partnership.Such an act will cause the partnership to dissociate.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is an apparent authority during winding up?

Accepted Answer

A)  Providing a third-party notification of the dissolution
B)  Continue making new contracts with disregard to the third parties' awareness about the same
C)  Conducting business the way it was before its dissolution
D)  Filing a Statement of Dissolution with the secretary of state C

Question 3

Xavier,Yellie,and Zelda are partners of Koral Associates.The term of the partnership is 5 years,but Zelda withdraws after 1 year because she no longer wished to continue.Discuss the nature and consequences of Zelda's dissociation.

Accepted Answer

Zelda likely violated an express term of the partnership agreement without good cause.As such,Zelda wrongfully dissociated from the partnership.As a result of wrongful dissociation,Zelda is not entitled to demand wind up of the partnership.Xavier and Yellie may elect to continue to operate the partnership.Zelda is entitled to her share of the value of the partnership.However,Xavier and Yellie may seek a set off against Zelda's interest for any damages they incur for Zelda's breach of the agreement.

Question 4

When the winding up partners disagree during the process:

Accepted Answer

A)  majority partner approval is required for actions in the ordinary course of winding up.
B)  unanimous partner approval is required for every decision.
C)  unanimous partner approval is required for actions in the ordinary course of winding up.
D)  majority partner approval is required for every decision.

Question 5

Bob was a partner in F & B Co. ,a partnership.Bob dissociated himself from it on June 1,2000.On December 1,2000,F & B Co.entered into a contract with Carey.Under which of the following scenarios may Bob be held liable to Carey,even though he is no longer a partner?

Accepted Answer

A)  Bob files a Statement of Dissociation with the secretary of state.
B)  Bob tells Carey on November 1,2000 that he is no longer a partner.
C)  The contract was entered into on the company's premises and Bob's name is still listed as a partner on the office door.
D)  Bob files a Statement of Dissociation with the court.

Question 6

Andrew,being a partner,has appointed a custodian for his property.Therefore,he has committed a wrongful dissociation.

Accepted Answer

A) True 
 B)False

Question 7

Mr.Smith and Mr.Blue enter into a partnership at will in which each owns half of the business.Mr.Blue decides to leave the partnership.What should Mr.Blue be paid for leaving the business?

Accepted Answer

A)  Mr.Blue should be paid half of the value of the business.
B)  Mr.Blue should receive 15% of the value of the business for leaving.
C)  Mr.Blue receives 1/3 of the value of the business for leaving.
D)  Mr.Blue receives nothing for his dissociation.

Question 8

The Barrel & Wine partnership is being wound up and liquidated.Net assets are to be distributed according to which of the following order of priority?

Accepted Answer

A)  First to creditors who are not partners,then to creditors who are partners
B)  First to all creditors,then to partners as per their capital accounts
C)  First to partners per their capital accounts,then to all creditors
D)  First to partners who have made loans to the partnership,then to all other creditors

Question 9

If a disagreement among partners threatens the economic viability of the partnership,a court may order a ________.

Accepted Answer

A)  winding up
B)  wrongful dissociation
C)  nonwrongful dissociation
D)  dissolution

Question 10

A new partner to an LLP is liable only to the amount of capital invested in the business.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a consequence of wrongful dissociation?

Accepted Answer

A)  The dissociated partner may demand dissolution of the partnership.
B)  The partnership must terminate on grounds of wrongful dissociation.
C)  The dissociated partner should contribute to performing the winding up.
D)  The dissociated partner is not entitled to receive the buyout price until the term of the partnership has expired.

Question 12

The partnership rules of dissociation and dissolution apply to joint ventures.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would be within a winding-up partner's implied authority to borrow money?

Accepted Answer

A)  Taking a new loan to consolidate the partnership's existing loans to make payments more convenient.
B)  Taking a new loan to buy more assets.
C)  Refinancing a loan to preserve a valuable asset.
D)  Refinancing a loan to buy more time.

Question 14

Carlita retires from Mortex Associates,a partnership.The business is continued by the remaining partners.What is Carlita's liability on debts incurred while she was a partner?

Accepted Answer

A)  Carlita has liability to the extent of her capital contribution.
B)  Carlita is fully liable.
C)  Carlita has no liability.
D)  Carlita has liability to the extent of partnership assets at the time of dissociation.

Question 15

Termination of a partnership occurs automatically after:

Accepted Answer

A)  wrongful dissociation has occurred.
B)  dissolution has occurred.
C)  the assets of the partnership have been distributed.
D)  the winding up process has begun.

Question 16

Under the RUPA,when the dissociated partner has not wrongfully dissociated and there is no partnership agreement on the issue,he should be paid within 120 days after his written demand.

Accepted Answer

A) True 
 B)False

Question 17

Poxabogue Associates,a partnership,is dissociated by the retirement of a partner.The business is continued by the remaining partners and a new partner,Enrica.What is Enrica's liability to creditors for partnership obligations that arose before she became a partner?

Accepted Answer

A)  Enrica is liable to the extent of partnership assets.
B)  Enrica is liable only if she agrees to assume the retired partner's liability.
C)  Enrica is fully liable.
D)  Enrica has no liability.

Question 18

Abraham,who is a partner in Adona's firm,has been found guilty of the crime of tax evasion.His partners at the firm want to expel him from partnership but they are not ready to give up his interest in the partnership.Is Abraham entitled to his interest in the partnership?

Accepted Answer

The answer of Abraham,who is a partner in Adona's firm,has...

Question 19

Emmy,Shane,and Rusty are partners of the firm Esha Associates.Rusty nonwrongfully dissociates himself from the partnership.Under these circumstances,Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

Accepted Answer

A)  if all the partners consent to it.
B)  if there is an agreement.
C)  if there is a court order.
D)  by novation.

Question 20

Termination occurs after all partnership assets have been distributed.

Accepted Answer

A) True 
 B)False

Exam 39: Partners Dissociation and Partnerships Dissolution and Winding up

A & K Inc.obtains a charging order against Bob,a partner in Foter and Poter Partnership.Such an act will cause the partnership to dissociate.

Which of the following is an apparent authority during winding up?

Xavier,Yellie,and Zelda are partners of Koral Associates.The term of the partnership is 5 years,but Zelda withdraws after 1 year because she no longer wished to continue.Discuss the nature and consequences of Zelda's dissociation.

When the winding up partners disagree during the process:

Bob was a partner in F & B Co. ,a partnership.Bob dissociated himself from it on June 1,2000.On December 1,2000,F & B Co.entered into a contract with Carey.Under which of the following scenarios may Bob be held liable to Carey,even though he is no longer a partner?

Andrew,being a partner,has appointed a custodian for his property.Therefore,he has committed a wrongful dissociation.

Mr.Smith and Mr.Blue enter into a partnership at will in which each owns half of the business.Mr.Blue decides to leave the partnership.What should Mr.Blue be paid for leaving the business?

The Barrel & Wine partnership is being wound up and liquidated.Net assets are to be distributed according to which of the following order of priority?

If a disagreement among partners threatens the economic viability of the partnership,a court may order a ________.

A new partner to an LLP is liable only to the amount of capital invested in the business.

Which of the following is a consequence of wrongful dissociation?

The partnership rules of dissociation and dissolution apply to joint ventures.

Which of the following would be within a winding-up partner's implied authority to borrow money?

Carlita retires from Mortex Associates,a partnership.The business is continued by the remaining partners.What is Carlita's liability on debts incurred while she was a partner?

Termination of a partnership occurs automatically after:

Under the RUPA,when the dissociated partner has not wrongfully dissociated and there is no partnership agreement on the issue,he should be paid within 120 days after his written demand.

Poxabogue Associates,a partnership,is dissociated by the retirement of a partner.The business is continued by the remaining partners and a new partner,Enrica.What is Enrica's liability to creditors for partnership obligations that arose before she became a partner?

Abraham,who is a partner in Adona's firm,has been found guilty of the crime of tax evasion.His partners at the firm want to expel him from partnership but they are not ready to give up his interest in the partnership.Is Abraham entitled to his interest in the partnership?

Emmy,Shane,and Rusty are partners of the firm Esha Associates.Rusty nonwrongfully dissociates himself from the partnership.Under these circumstances,Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

Termination occurs after all partnership assets have been distributed.