BUL Unit 8
Assume that Wizard Internet is operating as a general partnership. What is Caleb's personal tort liability for Anna's actions within the scope of the business? Caleb is personally liable only to the extent that Anna cannot pay the damages. Since it is a partnership, neither Caleb nor Anna would have personal liability. Caleb is personally jointly and severally liable, along with Anna. Caleb is only personally responsible for his own actions, not those of Anna.
Caleb is personally jointly and severally liable, along with Anna.
Suppose the agreement that was written does not say anything about how the partnership was to be run, how would the courts determine how the business is controlled? Control would be solely in the hands of the partner the court determined was the "principal partner." Each partner would have equal votes as to the operation of the partnership. Voting would be apportioned based on the amount of time that each has spent running the partnership.
Each partner would have equal votes as to the operation of the partnership.
Which of the following would be an advantage of Lenny running the team as a sole-proprietorship? He would have more flexibility to run the team than with other types of business organizations. He would assume all of the profits of the team. Any taxes on profits made from the team would be reported on Lenny's personal tax return. All of these.
He would have more flexibility to run the team than with other types of business organizations. He would assume all of the profits of the team. Any taxes on profits made from the team would be reported on Lenny's personal tax return. All of these.
Assume that Wizard Internet is allowed by state law to form a Limited Liability Partnership. If Anna and Caleb formed an LLP, which of the following is NOT true? The operation would be similar to that of a general partnership. If Anna were to commit an act of malpractice, Caleb would be liable as well. The company must be formed in compliance with state statutes. The profits from Wizard Internet would pass through to the partners.
If Anna were to commit an act of malpractice, Caleb would be liable as well.
Assume that the football team is set up as limited partnership. Lenny is the only general partner and Sarah and Sam are the only limited partners. Who would make the decision about whether or not to fire the quarterback? Lenny, Sarah, and Sam would vote on the decision. Only Sarah and Sam. The board of directors of the team. Only Lenny.
Only Lenny.
Daniel is a general partner in a real estate investment firm. Hank and Barry are limited partners. Daniel, without the consent or ratification of Hank and Barry, can: a. act as an agent of the partnership. b. rename the partnership using Hank's last name. c. not have almost exclusive managerial control of the business. d. admit another limited partner.
a. act as an agent of the partnership.
When were the last amendments made to the RULPA? a. 1976. b. 1985. c. 2001. d. 2005.
c. 2001.
Winding up involves all but which one of the following? a. Selling assets for cash. b. Collecting debts owed to the partnership. c. Taking orders for business. d. Paying creditors.
c. Taking orders for business
A partnership agreement should include all but which one of the following? a. The duties of the partners. b. The capital contribution of the partners. c. The agreement for dividing tax liability of the partnership. d. The division of profits and losses.
c. The agreement for dividing tax liability of the partnership.
A partner owes all of the following duties to the partnership except: a. duty of loyalty. b. duty of obedience. c. duty of care. d. duty of control.
d. duty of control.
In choosing the form in which to conduct business, if ease of formation is the primary concern, the owners would choose a: a. corporation. b. limited liability partnership. c. limited partnership. d. general partnership.
d. general partnership.
What kind of business organization are Caleb and Anna operating under now? A corporation. A limited partnership. A sole proprietorship. A general partnership.
A general partnership.
Assume the football team is set up as a limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC. The articles of organization specify that it is a member-managed firm. Which of the following statements is true in regards to the management of the firm, such as the decision of whether to fire the quarterback? The members would elect a group of managers, taken only from the LLC members, to manage the firm. The members would designate a group of members, non-members, or a combination of both, to manage the firm. All of the members would have a vote on management decisions. The members would designate a group of only non-member managers to manage the firm.
All of the members would have a vote on management decisions.
Suppose Lenny is the sole owner of the football team and has never created a separate business organization for it. How is the team owned? As a partnership. As a sole-proprietorship. As a limited liability company. As a limited liability proprietorship.
As a sole-proprietorship.
Assume the football team is set up as a limited partnership. Lenny is the only general partner and Sarah and Sam are the only limited partners. Which of the following is incorrect? If Sarah and Sam were involved in managing the team, they would lose their limited liability. The company must be formed through compliance with state statutes. Distribution of the profit among the partners is set by statute even if set forth in an agreement among the parties. The profits from the team would pass through to the partners.
Distribution of the profit among the partners is set by statute even if set forth in an agreement among the parties.
Assume the football team is set up as a limited liability company (LLC), that Lenny, Sarah, and Sam are the owners of the LLC, and it is a member-managed firm. Which of the following is incorrect? If any of the members were to act as a manager of the business, they would not lose their limited liability protection. The company must be formed through compliance with state statutes. Distribution of the profit among the partners would be determined by statute, even if it was spelled out in the LLC agreement. The profits from the team would pass through to the partners unless the LLC chooses to be taxed as a corporation.
Distribution of the profit among the partners would be determined by statute, even if it was spelled out in the LLC agreement.
If Anna originally invested $5,000 and Caleb invested $1,000 in the business, and the business made a profit of $60,000, how would the profit be split? If the partnership agreement specifies how the profits will be split, then they will be split using the terms of the agreement. If the partnership agreement specifies how the profits will be split, then the proceeds will be distributed accordingly, otherwise the profits will be split evenly between Anna and Caleb. If the partnership agreement does not specify how the profits will be split, then the proceeds will be split evenly ($30,000 to both). Regardless of what is in the partnership agreement, Anna will receive $50,000 of the profits and Caleb will receive $10,000.
If the partnership agreement specifies how the profits will be split, then the proceeds will be distributed accordingly, otherwise the profits will be split evenly between Anna and Caleb.
If Lenny owned the team as a sole proprietorship, which of the following is correct? It would be easy to raise capital for the team, since Lenny could sell off equitable shares of the team. If there was a contract dispute between the team and a third party, Lenny's liability would be limited to the amount he invested in the team. If there was a tort lawsuit arising from an activity of the team, Lenny could be sued personally. If Lenny were to die, there would be continuity of the business structure.
If there was a tort lawsuit arising from an activity of the team, Lenny could be sued personally.
Assume the football team is set up as a limited partnership. Lenny is the only general partner and Sarah and Sam are the only limited partners. The team is sued for negligence because an individual who turned to see the quarterback running naked crashed her car. Which of the following is true? Only the company itself is liable. Lenny has unlimited liability and Sarah and Sam have liability limited to their investment in the firm. Lenny, Sarah. and Sam all have unlimited liability. Lenny has liability limited to his investment in the firm and Sarah and Sam have unlimited liability.
Lenny has unlimited liability and Sarah and Sam have liability limited to their investment in the firm.
Assume the football team is set up as a limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC. Which of the following statements is true? The LLC can choose to be taxed like a corporation or like a partnership. Neither the LLC nor its members pay tax on profits earned by it. The LLC is always taxed like a partnership. The LLC is always taxed like a corporation.
The LLC can choose to be taxed like a corporation or like a partnership.
Assume the football team is set up as a limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC. The team is sued for negligence because an individual who turned to see the quarterback running naked crashed her car. Which of the following is true? The individual owners may have liability, but not the LLC itself. The LLC may have liability, but not the individual owners. The LLC may have liability, as well as the owners individually, and the owners' liability is unlimited. The LLC may have liability, as well as the owners individually, but the owners' individual liability is limited to twice their investment in the company.
The LLC may have liability, but not the individual owners.
Assume the football team is set up as a limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC. The articles of organization specify that it is a manager-managed firm. Which of the following statements is true in regards to management of the firm, such as the decision of whether to fire the quarterback? The members would elect a group of managers, taken only from the LLC members, to manage the firm. The members would designate a group of only non-member managers to manage the firm. The members would designate a group of members, non-members, or a combination of both, to manage the firm. All of the members would have a vote on management decisions.
The members would designate a group of members, non-members, or a combination of both, to manage the firm.
Assume the football team is set up as a general partnership and that Lenny, Sarah, and Sam are all general partners in the team. The team is sued for negligence because an individual who turned to see the quarterback running naked crashed her car. Which of the following is true? The partnership may be sued as well as the partners, but the partners' liability is limited to their investment in the firm. The individual partners may be sued, but not the partnership itself. The partnership may be sued, but not the individual partners. The partnership may be sued as well as the partners, and the partners' liability is unlimited.
The partnership may be sued as well as the partners, and the partners' liability is unlimited.
Would it be easy to cut the quarterback from the team if Lenny owned the team as a sole-proprietorship? No, since he might need approval from the board of directors of the business. Yes, since it would be entirely his decision. No, since he would have to have a vote of the other owners of the team. No, since he would own a fiduciary duty to the shareholders of the business
Yes, since it would be entirely his decision.
Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment complex. Instead of selling it, they decide to continue to operate it for the next few years as a sideline to their other occupations just to see if they can earn some extra money. What are they? a. A partnership. b. Co-owners only. c. A corporation. d. Creditors of the apartment complex.
a. A partnership. A partnership is an association of two or more persons to carry on as co-owners of a business.
Dale and Wayne have a limited partnership. Dale and Wayne agree to allow Salim serve as a limited partner in the limited partnership, on the condition that he provide a contribution to the limited partnership. What may Salim use to fulfill this contribution requirement? a. Cash b. Property c. Services rendered d. All of these are correct
a. Cash b. Property c. Services rendered d. All of these are correct
Mike and Tom are partners who started a car dealership. Mike, however, secretly started a car dealership on the other side of town without consulting the partnership. What duty did Mike violate? a. Fiduciary duty. b. Duty of the partnership track. c. Duty to contract d. None of these answers are correct.
a. Fiduciary duty.
Which of the following forms of business association may elect that only the partners/members are taxed? a. General partnerships. b. Limited partnership. c. Limited liability company. d. All of these are correct.
a. General partnerships. b. Limited partnership. c. Limited liability company. d. All of these are correct.
Joe and Josh are in a partnership with one another to sell electronics. Which of the following examples does Josh have apparent authority to do under the partnership? a. Indorse checks and notes. b. Make representations and warranties in selling electronics. c. Enter into a contract with the local newspaper for advertising sales. d. All of these answers are correct.
a. Indorse checks and notes. b. Make representations and warranties in selling electronics. c. Enter into a contract with the local newspaper for advertising sales. d. All of these answers are correct.
Jill is a member of ABC LLC, and Sam is the manager. Which of the following aspects do they share in common? a. Liability. b. Control. c. Financial interest. d. Profit and loss sharing.
a. Liability.
Jerry, Beaux and Nate want to form a business organization for their new accounting firm, and want to shield innocent owners from malpractice liability generated from other owners in the firm. Which type of entity should they form? a. Limited liability partnership. b. Limited liability company. c. Limited partnership. d. General partnership.
a. Limited liability partnership.
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? a. Partnership by estoppel. b. Delectus personae. c. A fiduciary duty. d. Torts of partnership.
a. Partnership by estoppel.
Marilyn, George, and Christine pool their money to buy land to operate a vegetable farm from which they plan to sell the produce and share the profits or losses. Are they partners? a. Yes, since they are associating to carry on a for-profit business that they co-own. b. No, because they each control the use of the land. c. Yes, because if there is a loss in the land's value, they will all share that loss. d. No, they are merely joint venturers.
a. Yes, since they are associating to carry on a for-profit business that they co-own.
Cindy and Ashley want to form a business entity that is a non-corporate business that limits liability for its owners, and allows for Cindy and Ashley to participate in the management of the company. Which business form should Cindy and Ashley adopt? a. a limited liability company. b. a corporation. c. a general partnership. d. a limited partnership.
a. a limited liability company.
Sue and Jesse formed a limited liability company, which sells electronics. Which of the following proposals may Sue and Jesse vote on related to the limited liability company? a. adopt or amend the operating agreement. b. sell all or substantially all of the limited liability company's assets prior to dissolution. c. merge the limited liability company with another limited liability company. d. All of these are correct.
a. adopt or amend the operating agreement. b. sell all or substantially all of the limited liability company's assets prior to dissolution. c. merge the limited liability company with another limited liability company. d. All of these are correct.
Typically, members of a limited liability company have the right to vote on proposals to: a. adopt or amend the operating agreement. b. sell all or substantially all of the limited liability company's assets prior to dissolution. c. merge the limited liability company with another limited liability company. d. All of these are correct.
a. adopt or amend the operating agreement. b. sell all or substantially all of the limited liability company's assets prior to dissolution. c. merge the limited liability company with another limited liability company. d. All of these are correct.
The __________ of a partner may be cash, property, services rendered, a promissory note, or an obligation to contribute cash or property or to perform services. a. contribution b. capital c. assets d. liabilities
a. contribution
A legal entity separate and distinct from its owners referred to as shareholders, and formed by filing articles of incorporation is a: a. corporation. b. limited liability company. c. limited partnership. d. general partnership.
a. corporation.
Actual authority terminates upon: a. dissolution of the partnership. b. illness of one of the partners. c. physical destruction of partnership papers. d. All of these are correct.
a. dissolution of the partnership.
Deborah, Olga, and Nashim are partners. Each partner has implied authority to: a. hire and fire employees necessary for operation of the business of the partnership. b. purchase property necessary for the business of the partnership. c. receive performance of obligations due the partnership. d. All of these are correct.
a. hire and fire employees necessary for operation of the business of the partnership. b. purchase property necessary for the business of the partnership. c. receive performance of obligations due the partnership. d. All of these are correct.
A partner has implied authority to: a. hire and fire employees necessary for operation of the business. b. purchase property necessary for the business. c. receive performance of obligations due the partnership. d. All of these are correct.
a. hire and fire employees necessary for operation of the business. b. purchase property necessary for the business. c. receive performance of obligations due the partnership. d. All of these are correct.
A partner who has no right to participate in control of the business and who has limited liability is called a: a. limited partner. b. nominal partner. c. secret partner. d. general partner.
a. limited partner.
Martha is a partner with JOA Partnership, but Martha has no right to participate in the control of the partnership's business and has limited liability. Which best describes Martha's role in the partnership? a. limited partner. b. nominal partner. c. silent partner. d. general partner.
a. limited partner.
The court in Wyler v. Feuer stated that: a. the general partner owes the limited partners a duty of reasonable care in the management of the business. b. the general partner may be held liable to the limited partner for any mistakes made or losses incurred in management of the business. c. a limited partner has a limited right to manage and control the partnership business. d. a limited partner's liability can exceed his investment.
a. the general partner owes the limited partners a duty of reasonable care in the management of the business.
In the case of Warnick v. Warnick, the court found that: a. the payments by the partners for the partnership mortgage was an advance and loan to the partnership b. the letter sent by Randall's attorney was a request to dissociate. c. the buyout price is the amount a partner is owed on the date of dissociation, less any offsets to creditors. d. All of these are correct.
a. the payments by the partners for the partnership mortgage was an advance and loan to the partnership b. the letter sent by Randall's attorney was a request to dissociate. c. the buyout price is the amount a partner is owed on the date of dissociation, less any offsets to creditors. d. All of these are correct.
The liability of partners for a tort or breach of trust committed by any partner is: a. unlimited, personal liability. b. limited liability. c. no liability. d. nominal liability.
a. unlimited, personal liability.
In the case of Thomas v. Lloyd, the court held: a. whether real estate titled in the names of individual partners is partnership property is a question of fact, and the burden of proof is on the one alleging that the actual ownership does not match the names on the legal title. b. payment of promissory note payments for the real estate out of partnership funds is determinative of the fact that the realty is a partnership asset. c. the use of land by a partnership is determinative of the fact that the land is owned by the partnership. d. payment of real estate taxes out of partnership funds is determinative of the fact that the land is a partnership asset.
a. whether real estate titled in the names of individual partners is partnership property is a question of fact, and the burden of proof is on the one alleging that the actual ownership does not match the names on the legal title.
Which of the following would lack the capacity to become a partner? a. A trust. b. An adjudicated incompetent. c. A corporation. d. All of these are correct.
b. An adjudicated incompetent.
In the case of Conklin Farm v. Leibowitz, the Supreme Court of New Jersey held that: a. Doris Leibowitz was personally liable for the accrued interest on the note while she was a partner. b. Doris Leibowitz, as an incoming partner, was not liable for any pre-existing debts, including interest on the note. c. Doris Leibowitz was personally liable for all the debts of the partnership d. All of the partners were jointly and severally liable for the debts of partnership.
b. Doris Leibowitz, as an incoming partner, was not liable for any pre-existing debts, including interest on the note.
Which of the following is NOT considered to be dissolution by operation of law under the UPA? a. Bankruptcy of a partner. b. Expulsion of a partner according to the partnership agreement. c. Subsequent illegality of the partnership. d. Death of a partner.
b. Expulsion of a partner according to the partnership agreement.
Brody and Kris were the only member-managers of Computers4U, LLC. Computers4U, LLC is dissolving, and Brody and Kris wish to extinguish the company. Which of the following is not a step to extinguishing an LLC? a. Termination b. Filing a certificate of extinguishment with the state LLC office. c. Wind up or liquidation d. Dissolution
b. Filing a certificate of extinguishment with the state LLC office.
Which of the following is correct regarding the fiduciary duties in a limited partnership? a. A general partner has a fiduciary relationship to the limited partners, but not to any other general partners. b. Judicial authority seems to suggest that the limited partner has no fiduciary duty to the partnership. c. The fiduciary duty of the general partner has little effect upon the interests of the limited partners, because they have no ability to manage or control the partnership. d. All of these are correct.
b. Judicial authority seems to suggest that the limited partner has no fiduciary duty to the partnership.
Tony is a general partner of a limited partnership in which Alice and Mary are limited partners. Which of the following correctly states Tony's duties to Alice and Mary? a. Tony owes a duty of partnership to Alice and Mary. b. Tony owes a fiduciary duty to Alice and Mary. c. Tony owes a limited duty to Alice and Mary. d. None of these are correct.
b. Tony owes a fiduciary duty to Alice and Mary.
A general partner of a limited partnership has a(n) __________ relationship to the general and limited partners. a. limited b. fiduciary c. foreign d. None of these are correct
b. fiduciary
Robert and Keith want to form a business entity with equal control and limited liability. They should form a: a. limited partnership. b. limited liability company. c. corporation. d. joint venture.
b. limited liability company.
In the case of Enea v. The Superior Court of Montery County, the court held: a. that the partners could lease partnership property to themselves at rents below market. b. partners owe a fiduciary duty to the partnership and may not take advantages for themselves at the expense of the partnership. c. the partners had no duty to collect market rents in the absence of a contract requiring them to do so. d. that the partnership can waive the partners' fiduciary duty.
b. partners owe a fiduciary duty to the partnership and may not take advantages for themselves at the expense of the partnership
In the case of In Re Keytronics, the court held: a. that being co-owners of property is evidence of being co-owners in a business for profit. b. that King and Wilson had formed a partnership based on their actions, even if they did not intend to form a partnership. c. that intent is a relevant factor in partnership formation. d. that only objective factors should be taken into consideration in proving co-ownership in a business.
b. that King and Wilson had formed a partnership based on their actions, even if they did not intend to form a partnership.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose out of the operation of the business. Jess, a business owner, is not personally liable if: a. he is a sole proprietor of the business. b. the business is a corporation and he is a shareholder. c. he committed the tort. d. he is a general partner of the business.
b. the business is a corporation and he is a shareholder.
Andre invested $100,000 in a partnership with Erik and Louis for the purchase of an apartment complex, with each owner sharing equally in the profits and losses. The property is owned by: a. Andre, Erik, and Louis as co-tenants. b. the general partnership. c. the joint venture. d. Andre, Erik, and Louis as shareholders.
b. the general partnership.
Under the RULPA, if Jack contributed $1000 as a limited partner and signed a certificate, but the certificate was filed in the wrong office, Jack: a. is not a partner, but may receive future profits. b. will not be liable as a general partner if he quickly withdraws from the business and renounces future profits. c. may become a limited partner by giving constructive notice of the defective filing to all potential business contacts by an advertisement in a publication of general circulation. d. cannot avoid liability as a general partner under any circumstances.
b. will not be liable as a general partner if he quickly withdraws from the business and renounces future profits.
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. What will Gene get in distribution under the UPA, assuming there is no agreement on the distribution of profits? a. $7,000. b. $8,000. c. $11,000. d. $5,000.
c. $7,000. - Gene is entitled to payment for his loan ($5,000) plus distribution from any remaining profits:(((34,000 - 23,000)- 5,000)/3) = $2,000.
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 is the result? a. Alan has to pay her for 40 hours per week. b. Alan is bound to pay her for 20 hours per week. c. ABC Partnership is bound to pay her for 40 hours per week. d. ABC Partnership is not bound to hire her
c. ABC Partnership is bound to pay her for 40 hours per week.
Under the UPA, which of the following liabilities of a partnership has the highest priority for payment out of partnership assets? a. Amounts owing to partners for profits. b. Amounts owing to partners for loans or advances. c. Amounts owing to creditors other than partners. d. Amounts owing to partners for capital.
c. Amounts owing to creditors other than partners.
Hillary, Carly, and Donald are partners in a political consulting firm. Donald committed a tort against Jeb while in the course of conducting business for the partnership. What is the extent of Hillary and Carly's liability resulting from Donald's tort? a. Hillary and Carly face only limited liability for Donald's tort. b. Hillary and Carly face nominal liability for Donald's tort. c. Hillary and Carly face unlimited and personal liability for Donald's tort. d. Hillary and Carly face no liability for Donald's tort.
c. Hillary and Carly face unlimited and personal liability for Donald's tort.
Which of the following is correct regarding a limited partnership? a. The general partner must make a capital contribution. b. It can be created in such a way that the general partner has limited liability. c. It can only be created pursuant to statutory provisions. d. Limited partners are unable to vote on the incurrence of debt other than in the ordinary course of business under the safe harbor provisions of the RULPA
c. It can only be created pursuant to statutory provisions.
Members of member-managed LLCs and manager-managed LLCs are the same in which of the following aspects? a. Control. b. Who has fiduciary duties. c. Liability. d. All of these are correct.
c. Liability.
Sam, John, Richard, and Fred are partners. Mary is interested in becoming a new partner with the partnership. Under RUPA, in order for Mary to properly become a partner, which of the following is true? a. Mary must receive the consent of only a majority of the existing partners. b. Mary must receive the consent of only one of the existing partners. c. Mary must receive the consent of all of the partners. d. Mary must receive the consent of two-thirds of the partners.
c. Mary must receive the consent of all of the partners.
Which of the following need NOT be included in the certificate filed by a limited partnership? a. The name of the limited partnership. b. The name and address of the agent for service of process. c. The names and addresses of each of the limited partners. d. The name and business address of each general partner.
c. The names and addresses of each of the limited partners.
Which of the following is the most convincing evidence of a partnership arrangement?Not Ans a. Two or more persons are co-owners of property used in a business. b. Two or more persons have a written agreement regarding a fundraiser for charity. c. Two or more persons carry on a business for profit, but they have no formal agreement. d. Two persons share a joint savings account in which they deposit money and share the interest.
c. Two or more persons carry on a business for profit, but they have no formal agreement.
The best and most reliable tool for preserving a partnership business after dissolution is: a. a court order. b. the filing of a request with the secretary of state's office in the state where the original partnership was located. c. a continuation agreement. d. There is no tool for preserving a partnership after dissolution. A new partnership must be formed after distributing all partnership property from the original partnership.
c. a continuation agreement.
A company that is in a non-corporate business, limits liability for owners, and all members may participate in management is: a. a limited partnership. b. a corporation. c. a limited liability company. d. a general partnership
c. a limited liability company.
A partner's interest is subject to the claims of that partner's creditors who may obtain a judicial lien known as a(n) __________ against the partner's transferable interest. a. assignability b. distribution c. changing order. d. indemnification
c. changing order.
The UPA provides that partners are __________ liable on all debts and contract obligations of the partnership. a. jointly b. strictly c. jointly and severally d. partially
c. jointly and severally
A __________ is a partnership in which the liability of the general partners has been limited to the same extent as in a limited liability partnership. a. limited partnership b. limited liability company c. limited liability limited partnership d. None of these are correc
c. limited liability limited partnership
Smarth, King, and Finkel have been partners for years, but a court of equity is now segregating and considering separately the assets and liabilities of the partnership and the respective assets and liabilities of the individual partners. This process is called: a. winding up. b. liquidation. c. marshaling of assets. d. dissolution of the partnership
c. marshaling of assets.
Under the UPA, after dissolution: a. the partnership must be liquidated. b. the remaining partners have the right to continue the partnership if the majority of them agree c. the remaining partners have the right to continue the partnership if the partnership was dissolved in contravention of the partnership agreement. d. the partnership must be liquidated only if the dissolution was caused by the expulsion of a partner in accordance with the partnership agreement.
c. the remaining partners have the right to continue the partnership if the partnership was dissolved in contravention of the partnership agreement.
Luke typically spends 50-55 hours per week working in the real estate partnership he co-owns with Spencer. Spencer only spends about 30 hours a week on partnership business. Under the RUPA: a. Luke would be entitled to payment from the partnership for the extra 20-25 hours per week he spends on partnership business unless a partnership agreement denies this right. b. the partners cannot agree to deny extra payment for extra work by a partner. c. unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the partnership, even if it is disproportionate to his partner's work. d. Luke would be entitled to payment from the partnership only if the amount of time and effort he expends on partnership business is grossly disproportionate to that spent by his partner.
c. unless the partners have otherwise agreed, Luke is not entitled to payment for his work for the partnership, even if it is disproportionate to his partner's work.
Roberts, Smith, and Thomas have been partners for twenty years. The partners, however, are now collecting debts, converting assets to cash, paying creditors, and distributing remaining assets to each partner. Roberts, Smith, and Thomas are engaged in: a. dissolution. b. marshaling assets. c. winding up. d. reformation.
c. winding up.
Bobby, Sammy, and Joan are in a partnership. If the partnership incurs debt of $100,000 from a contractual obligation. What is the liability on such debt by Bobby, Sammy, and Joan under the UPA? a. Bobby, Sammy, and Joan are strictly liable for the debt. b. Bobby, Sammy and Joan are only partially liable for the debt. c. Bobby, Sammy, and Joan are jointly liable for the debt. d. Bobby, Sammy, and Joan are jointly and severally liable for the debt.
d. Bobby, Sammy, and Joan are jointly and severally liable for the debt
Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals. They each work two days a week. Donations fund the day-to-day operations. Do they have a partnership? a. Yes, since each has control of the operation. b. Yes, because they are all co-equals in ownership of the shelter. c. No, because they have made no formal agreement. d. No, because there is no business for profit.
d. No, because there is no business for profit.
Shannon has just become a partner in A & R Accounting Partnership. Her capital contribution is $10,000, which she paid from her savings. Which of the following is correct with respect to Shannon's liability for partnership obligations? a. Shannon has unlimited personal liability for all partnership debts regardless of whether they were incurred before or after she became a partner. b. Shannon has no liability for partnership debts that existed at the time of her admission as a partner. c. Shannon is liable only to the extent of her capital contribution for partnership debts that occur after her admission as a partner. d. Shannon 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.
d. Shannon 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.
A __________ is an unincorporated business association consisting of at least one general partner and at least one limited partner. a. joint venture b. limited liability company c. limited liability partnership d. limited partnership
d. limited partnership
Peter is a general partner to an unincorporated business association, and Diane is a limited partner to this business association. Which best describes Peter and Diane's business formation? a. joint venture b. limited liability company c. limited liability partnership d. limited partnership
d. limited partnership A limited partnership is an unincorporated business association consisting of at least one general partner and at least one limited partner.
In Alzado v. Blinder, Robinson & Company, Inc., Blinder, Robinson & Co. was found: a. liable to partnership creditors as a general partner because it assumed control of the business and thus lost its limited partnership status. b. liable to the partnership creditors as a general partner because it required the formation of the limited partnership, and as a result it was deemed to be a general partner. c. not liable, because by only putting up the letter of credit and requiring Alzado to sign a personal guaranty, it was not a true partner. d. not liable to partnership creditors as a general partner because it only engaged in a few promotional activities that did not rise to the level of management or control of the partnership.
d. not liable to partnership creditors as a general partner because it only engaged in a few promotional activities that did not rise to the level of management or control of the partnership.
Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car. The customer sues the partnership and recovers $8,000 in damages. Under the RUPA: a. Paul has no duty to indemnify the partnership for any payments made because of his negligent behavior since he was on partnership business. b. regardless of whether the partnership has assets, all partners must equally share payment because Paul was an agent of the partnership. c. if the partnership is liable, the partners other than Paul have liability up to the amount of their capital contributions to the partnership. d. the partnership is liable under the doctrine of respondeat superior.
d. the partnership is liable under the doctrine of respondeat superior. Under the doctrine of respondeat superior a partnership may be liable for an unauthorized tort committee by its employee in the scope of his employment.
Assume the football team is set up as a limited liability company (LLC) and that Lenny, Sarah, and Sam are the owners of the LLC. Lenny, Sarah and Sam are properly referred to as: members. shareholders. limited partners. partners.
members.