Partnerships & LLCs Knowledge Check
What level of liability insurance must a partnership carry to satisfy claims against a limited liability partnership ("LLP")?
$500K
Which of the following statements regarding apparent authority is true?
Apparent authority is the authority that a third party would reasonably believe a partner has based on his being held out by the partnership as a partner.
A partner's dissociation will necessarily be considered wrongful in each of the following situations EXCEPT: A When the partner becomes bankrupt before the end of the partnership term or completion of the undertaking. B When a court decides that the partner is incapable of performing a partner's duties. C When the partnership is for a definite term or particular undertaking and the partner withdraws before the term ends or the undertaking is completed. D When the partner is expelled from the partnership before the end of the partnership term or completion of the undertaking.
B
Pursuant to the duty of loyalty, a partner must do all of the following EXCEPT: A Account for profits, property, opportunities, or other benefits derived by the partner in conjunction with partnership business. B Refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or knowing violation of the law. C Refrain from dealing with the partnership as, or on behalf of, a party having an interest adverse to the partnership. D Refrain from competing with the partnership.
B
Which of the following is NOT a consequence of a partner's dissociation? A If the partnership continues, the partnership must buy out the dissociated partner's interest. B The dissociated partner is not liable for any obligation incurred after dissociation. C The dissociated partner's right to participate in management ceases. D The dissociated partner generally remains liable for obligations incurred by the partnership before dissociation.
B
A limited partnership may be dissolved in any of the following ways EXCEPT: A By judicial dissolution. B By administrative dissolution. C With the consent of all general partners; the consent of the limited partners is not needed. D Upon the happening of an event specified in the partnership agreement.
C
Under the Revised Uniform Partnership Act ("RUPA"), which of the following statements regarding dissolution is correct? A After dissolution, a partnership ceases to be bound by a partner's acts. B A partner who wrongfully dissolves a partnership may be entitled to wind up the affairs of the partnership. C After a partnership is dissolved, its liabilities must be paid in the following order: first to creditors (including partners who are creditors), then to partners in settlement of their accounts. D Any time after dissolution and before winding up is completed, the partners may decide by majority vote to continue the partnership business.
C
Under the Revised Uniform Partnership Act, which of the following provisions may be waived in a partnership agreement? A The right to inspect the books and records of the partnership. B The power to dissociate as a partner. C The equal sharing of profits and losses. D A partner's duties of loyalty and care.
C
Under the Revised Uniform Partnership Act, which of the following statements regarding lawsuits involving a partnership is correct? A A partnership may sue or be sued only in the partnership name. B Suits by and against the partnership must name the individual partners. C A partnership may sue or be sued in the names of the individual partners. D Partners may not be sued in their individual capacity.
C
Which of the following statements is NOT true regarding the formation of a limited liability company ("LLC") under Oklahoma law? A The articles of organization must be filed with the secretary of state. B Corporations and partnerships may be members of an LLC. C The number of managers must be specified in the articles of organization or operating agreement. D The articles of organization may, but need not, include a term of existence for the LLC
D
Which of the following statements regarding a partner's liability is NOT true? A Partners are jointly and severally liable for all obligations of the partnership. B Partners are personally and individually liable for the entire amount of all partnership obligations. C Incoming partners are not personally liable for any partnership obligation incurred before their admission to the partnership. D Outgoing partners cease to be personally liable for any obligations incurred by the partnership while members 90 days after they leave the partnership.
D
With respect to limited partnerships, which of the following statements regarding a general partner's liability is NOT true? A General partners are jointly and severally liable for all obligations of the partnership. B General partners are not personally liable on partnership obligations if the limited partnership is also a limited liability partnership. C Incoming general partners are not personally liable for any partnership obligation incurred before they became general partners. D General partners are not personally liable for the obligations of the partnership beyond their agreed-upon contributions.
D
With respect to limited partnerships, which of the following statements regarding the liability of limited partners is true? A A limited partner is personally liable for obligations of the limited partnership only if he participates in management or control of the partnership. B A limited partner is personally liable for all obligations of the limited partnership, no matter the circumstances. C A limited partner is not personally liable for obligations of the limited partnership under any circumstances. D A limited partner is personally liable for obligations of the limited partnership if he also is a general partner.
D
Which of the following events will NOT cause the dissolution of a limited liability company ("LLC")?
Death of a member
Which of the following statements regarding a partner's right to participate in management of the partnership is correct?
Decisions regarding matters within the ordinary course of partnership business may be controlled by a majority vote of all the partners, but matters outside the ordinary course of partnership business require the consent of all partners.
The absence of an agreement to share losses is:
Evidence that the parties DID NOT intend to form a partnership
Under the doctrine of partnership by estoppel, even though there is no partnership agreement and the parties as between themselves are not partners, they may be held liable to third parties as if they were partners. This issue is likely to arise when a person:
Holds another person out to be her partner.
Which of the following statements regarding the management of a limited liability company ("LLC") is true in Oklahoma?
It is presumed that managers will manage an LLC
Under the Uniform Limited Partnership Act, the name of a limited partnership ____________________ contain ____________________.
May; the name of any limited partner
Generally, a member of a limited liability company ("LLC") may bring a derivative action on behalf of the LLC if:
She has made an unsuccessful demand on the LLC's management to enforce the right at issue.
Under the Revised Uniform Limited Liability Company Act ("RULLCA"), which of the following is necessary to form a limited liability company ("LLC")?
The filing of a certificate of organization with the secretary of state.
Under the Revised Uniform Partnership Act ("RUPA"), how long does a partnership continue to exist after dissolution?
The partnership continues until winding up of the business is complete.
The Uniform Limited Partnership Act ("ULPA") grants certain rights to general and limited partners. Which of the following rights is exclusive to general partners?
The right to manage the limited partnership's activities.
Titled property is deemed or presumed to be partnership property UNLESS it is:
Titled in the name of one or more partners
How does Oklahoma law address the allocation of profits and losses in a limited liability company ("LLC")?
Unless otherwise provided in the operating agreement, profits and losses are divided according to the percentage of capital contribution to the extent they have been received by the LLC and not returned.``
Which of the following is required to form a partnership?
atleast two persons
A transfer of a partner's transferable interest in a partnership entitles the transferee to:
receive distributions to which the transferring partner would otherwise be entitled
Which of the following factors raise a presumption that a partnership has been formed?
sharing of profits
Which of the following statements regarding remuneration of a partner is correct?
A partner is not entitled to remuneration except for services rendered in winding up the partnership's business.
Which of the following statements regarding a partner's interest in the partnership is correct?
A partner may transfer his interest in profits, losses, and distributions
A partner is liable for each of the following EXCEPT: A Crimes committed by a co-partner within the scope of partnership business of which the partner had knowledge. B Torts committed by a co-partner or an employee of the partnership within the scope of partnership business. C Contracts made by a co-partner within the scope of partnership business. D Frauds committed by a co-partner in the course of partnership business, even if the other partners have no connection with, knowledge of, or participation in the fraud.
A
Under the Revised Uniform Limited Liability Company Act ("RULLCA"), which of the following statements is correct regarding the management of a limited liability company ("LLC")? A It is presumed that members will manage an LLC. B It is presumed that managers will manage an LLC. C It is presumed that each member will have voting strength proportionate to his ownership interest. D It is presumed that each manager will have voting strength proportionate to his capital contribution.
A
Which of the following statements is true regarding a way in which limited liability partnerships ("LLPs") and general partnerships are similar? A Partners of both entities have the same financial rights and obligations. B Both entities must file a statement of qualification with the secretary of state. C Partners of both entities are personally liable for any obligations of the partnership. D Both entities have the same naming requirements.
A
Which of the following statements regarding actual authority of a partner is true? A If the partnership agreement authorizes a partner to act, no further action is required for a partner to act. B A partner is prohibited from taking any action that is not specifically authorized by the partnership agreement. C A partner has actual authority to act on behalf of the partnership by virtue of being a partner. D Unanimous consent is required to grant a partner actual authority to act on behalf of the partnership in all cases.
A
With respect to limited liability companies ("LLCs"), a court will pierce the veil of limited liability in each of the following circumstances EXCEPT when an LLC: A Fails to observe formalities. B Is the alter ego of the members or managers. C Is inadequately capitalized at its inception. D Was formed to perpetrate a fraud.
A
