SU 15 MC
D, E, F, and G formed a general partnership. Their written partnership agreement provides that the profits will be divided so that D will receive 40%; E, 30%; F, 20%; and G, 10%. There is no provision for allocating losses. At the end of its first year, the partnership has losses of $200,000. Before allocating losses, the partners' capital account balances are D, $120,000; E, $100,000; F, $75,000; and G, $11,000. G refuses to make any further contributions to the partnership. Ignore the effects of federal partnership tax law. After losses are allocated to the partners' capital accounts and all liabilities are paid, the partnership's sole asset is $106,000 in cash. How much will E receive on dissolution of the partnership?
$37,000
Downs, Frey, and Vick formed the DFV General Partnership to act as manufacturers' representatives. The partners agreed Downs would receive 40% of any partnership profits and Frey and Vick would each receive 30% of such profits. It was also agreed that the partnership would not terminate for 5 years. After the fourth year, the partners agreed to terminate the partnership. At that time, the partners' capital accounts were as follows: Downs, $20,000; Frey, $15,000; and Vick, $10,000. There also were undistributed losses of $30,000. Vick's share of the undistributed losses will be
$9,000
Wilson and Thomas are partners. Wilson contributed $150,000 to the partnership, and Thomas contributed $50,000. Wilson does 40% of the work, and Thomas does 60%. They do not have a partnership agreement that addresses the sharing of profits and losses. By the end of the year, the partnership has earned a profit of $200,000. What is Wilson's share of the profit under the Revised Uniform Partnership Act?
100,000
D, E, F, and G formed a general partnership. Their written partnership agreement provides that the profits will be divided so that D will receive 40%; E, 30%; F, 20%; and G, 10%. There is no provision for allocating losses. At the end of its first year, the partnership has losses of $200,000. Before allocating losses, the partners' capital account balances are D, $120,000; E, $100,000; F, $75,000; and G, $11,000. G refuses to make any further contributions to the partnership. Ignore the effects of federal partnership tax law. What is G's share of the partnership losses?
20,000
The most significant distinction between a general partner and a joint venturer is that
A joint venturer has less apparent authority.
In general, which of the following statements is true with respect to a limited partnership?
A limited partner has the right to obtain from the general partner(s) financial information and tax returns of the limited partnership.
Which of the following is a legal entity separate from its owners
All of the answers are correct
Smith and James were partners in S and J Partnership. The partnership agreement stated that all profits and losses were allocated 60% to Smith and 40% to James. The partners decided to terminate and wind up the partnership. The following was the balance sheet for S and J on the day of the windup: Cash $40,000 Accounts receivable 12,000 Property and equipment 38,000 Total assets $90,000 Accounts payable $24,000 Smith, capital 30,000 James, capital 36,000 Total liabilities and capital $90,000 Of the total accounts receivable, $10,000 was collected, and the remainder was written off as bad debt. All liabilities of S and J were paid by the partnership. The property and equipment are sold for $32,000. Under the Revised Uniform Partnership Act, what amount of cash was distributed to Smith?
25,200
Gillie, Taft, and Dall are partners in an architectural firm. The partnership agreement is silent about the payment of salaries and the division of profits and losses. Gillie works full-time in the firm, and Taft and Dall each work half-time. Taft invested $120,000 in the firm, and Gillie and Dall invested $60,000 each. Dall is responsible for bringing in 50% of the business, and Gillie and Taft 25% each. How should profits of $120,000 for the year be divided? Gillie Taft Dall
40,000 40,000 40,000
Which of the following statements is true with respect to a limited partnership?
A general partner may be a secured creditor of the limited partnership.
Absent any contrary provisions in the agreement, under which of the following circumstances will a limited partnership be dissolved?
A general partner retires and all the remaining general partners do not consent to continue.
What business entity can be voluntarily dissolved and terminated without filing a dissolution document with the state of organization?
A general partnership.
What type of business organization may generally be formed without filing an organizational document or certificate with a state government agency or office?
A general partnership.
In which of the following situations will a limited partner most likely lose limited liability status?
A limited partner participates in control of the partnership by serving as its agent.
Which of the following statement(s) is (are) usually true regarding general partners' liability? I. All general partners are jointly and severally liable for partnership torts. II. All general partners are liable only for those partnership obligations they actually authorized.
I only
Which of the following is necessary content of the limited partnership certificate? I. The name of the limited partnership II. The address of its office III. The latest date upon which the limited partnership is to dissolve
I, II, III
Cobb, Inc., a partner in TLC Partnership, assigns its partnership interest to Bean, who is not made a partner. After the assignment, Bean may assert the rights to: I. Participation in the management of TLC II. Cobb's share of TLC's partnership profits
II only
Major Supply, Inc., is seeking a judgment against Les Danforth on the basis of a representation made by Dirk Coleman, in Danforth's presence, that they were in partnership together doing business as the D & C Trading Partnership. Major Supply received an order from Coleman on behalf of D & C and shipped $800 worth of goods to Coleman. Coleman has defaulted on payment of the bill and is insolvent. Danforth denies he is Coleman's partner and that he has any liability for the goods. Insofar as Danforth's liability is concerned, which of the following is true?
If Major Supply gave credit in reliance upon the misrepresentation by Coleman, Danforth is a partner by estoppel.
Stanley is a well-known retired movie personality who purchased a limited partnership interest in Terrific Movie Productions upon its initial syndication. Which of the following is true?
If Stanley permits his name to be used in connection with the business and is held out as a participant in the management of the venture, he will be liable as a general partner.
James Quick was a partner in the Fast, Sure, and Quick Factors partnership. He subsequently died. His will left everything to his wife including a one-third interest in the land and building owned by Fast, Sure, and Quick. Which of the following statements is true?
Mrs. Quick has the right to receive a settlement for her husband's interest in the partnership.
Bonanza Real Estate Ventures was formed under a state's version of the Revised Uniform Limited Partnership Act. It has three general partners and 1,100 limited partners. The limited partnership interests were offered to the general public at $5,000 per interest. Julie Kay purchased a limited-partnership interest. As such, she
Must include her share of partnership profits in her taxable income even if she withdraws nothing.
Generally, under the Revised Uniform Partnership Act, a partnership has which of the following characteristics? Unlimited duration Obligation for payment of federal income tax
NO NO
Unless the partnership agreement prohibits it, a partner in a general partnership may validly assign rights to: Partnership property Partnership distribution
NO YES
A partner's interest in specific partnership property is: Assignable to the partners individual creditors Subject to Attachment to attachment by the partners individual
NO NO
Which of the following statements regarding a limited partner is(are) usually true? I. The limited partner is subject to personal liability for partnership debts. II. The limited partner has the right to take part in the control of the partnership.
Neither I nor II
Lewis, Clark, and Beal entered into a written agreement to form a partnership. The agreement required that the partners make the following capital contributions: Lewis, $40,000; Clark, $30,000; and Beal, $10,000. It was also agreed that, in the event the partnership experienced losses in excess of available capital, Beal would contribute additional capital to the extent of the losses. The partnership agreement was otherwise silent about division of profits and losses. Which of the following statements is true?
Profits are to be divided equally among the partners.
Jackie Daniels, Jess Beal, and Sid Wade agreed to form the DBW Partnership to engage in the import-export business. They had been life-long friends and had engaged in numerous business dealings with each other. It was orally agreed that Daniels would contribute $20,000, Beal $15,000 and Wade $5,000. It was also orally agreed that in the event the venture proved to be a financial disaster all losses above the amounts of capital contributed would be assumed by Daniels and that she would hold her fellow partners harmless from any additional amounts lost. The partnership was consummated with a handshake and the contribution of the agreed-upon capital by the partners. There were no other express agreements. Under these circumstances, which of the following is true?
Profits are to be divided equally.
The formation of a sole proprietorship:
Requires a formal "doing business as" filing under state law if the proprietor plans to do business under a fictitious name.
A limited partner's capital contribution to the limited partnership
Results in the limited partner having an intangible personal property right.
Billie Donovan, a partner of Monroe, Lincoln, and Washington, is considering selling or pledging all or part of her interest in the partnership. The partnership agreement is silent on the matter. Donovan may
Sell or pledge her entire partnership interest without causing a dissolution.
Which of the following is false regarding the taxation of a sole proprietorship?
Sole proprietorships are subject to tax at both the business and individual level.
Berry, Drake, and Flanigan are partners in a general partnership. The partners made capital contributions as follows: Berry, $150,000; Drake, $100,000; and Flanigan, $50,000. Drake made a loan of $50,000 to the partnership. The partnership agreement specifies that Flanigan will receive a 50% share of profits and that Drake and Berry each will receive a 25% share of profits. Under the Revised Uniform Partnership Act and in the absence of any partnership agreement to the contrary, which of the following statements is correct regarding the sharing of losses?
The partners will share in losses according to the allocation of profits specified in the partnership agreement.
Buster and Rover formed a partnership to invest in real estate. However, Buster also decided to sell TVs on the side. Buster went to Harold, a wholesaler, and purchased 20 TVs on credit in the name of the partnership. Harold knew the partnership was formed for the purpose of investing in real estate because he had been solicited to be one of the partners. If Buster does not pay for the TVs,
The partnership is not liable because it is not a trading partnership.
A parent and children currently own and operate a farm as equal partners. Under the Revised Uniform Partnership Act, what effect would the death of the parent have on the partnership?
The surviving partners could continue the partnership.
The partnership agreement for Owen Associates, a general partnership, provided that profits be paid to the partners in the ratio of their financial contribution to the partnership. Moore contributed $10,000, Noon contributed $30,000, and Kale contributed $50,000. For the year ended December 31, Owen had losses of $180,000. What amount of the losses should be allocated to Kale?
100,000
Unless otherwise provided in the limited partnership agreement, which of the following statements is true?
A person may own a limited partnership interest in the same partnership in which (s)he is a general partner.
A general partner will not be personally liable for which of the following acts or transactions?
A personal mortgage loan obtained by one of the other partners on his or her residence to which that partner, without authority, signed the partnership name on the note.
Which of the following statements is true regarding sole proprietorships?
A sole proprietorship located and registered in Florida also may operate in Nevada and Michigan without having to register formally in those states.
In a general partnership, which of the following acts must be approved by all the partners?
Admission of a partner.
Harry, Harriet, and Horance operate the Triple H used car lot as a general partnership. Pursuant to their agreement, each drives a Triple H vehicle to and from work, makes various business trips about the city either from home or the lot, and keeps a "for sale" sign displayed in the vehicle's windshield. Each car is for sale at all times of the day and night and at any location. One afternoon, Harriet was driving on a business trip when her car collided with one driven by Paine, who was seriously injured. Harriet's conduct was found to be criminally negligent. In a tort action by Paine against Harry, Harriet, and Horance, both as individuals and as the Triple H partnership, who is liable?
All defendants because Harriet was acting within the ordinary course of the partnership business.
Dowling is a promoter and has decided to use a limited partnership for conducting a securities investment venture. Which of the following is unnecessary to form the partnership?
All limited partners' capital contributions must be paid in cash.
Armer, Ltd. is a limited partnership that invests in pork bellies. To obtain additional capital, the general partners want to admit additional limited partners. Some of the existing limited partners are unhappy with their investments and want to sell their interests. The certificate and agreement of limited partnership provide no guidelines. Which of the following statements is true?
All partners must unanimously consent to admitting additional limited partners.
Which of the following partners of a limited liability partnership (LLP) may avoid personal liability when a partner commits a negligent act?
All the partners other than the negligent partner and his or her supervisor.
A joint venture is
An association of persons engaged as co-owners in a single undertaking for profit.
B approached L and proposed they form a partnership to exploit a profitable idea of B's. L declined, citing the risk of unlimited liability. B then proposed that L lend B $50,000 and that B go into the business as a sole proprietor. L would receive half the profits and the right to veto any of B's decisions. The debt would have a long-term maturity date to facilitate operation of the business during its development stage. If L accepts the above proposition, the likely result is that
B and L have formed a partnership even if they did not intend to.
The rights of the general and limited partners regarding the assignment of their partnership interests are
Basically the same with respect to both types of partners.
Under the Revised Uniform Partnership Act (RUPA), which of the following statements concerning the powers and duties of partners in a general partnership is(are) true? I. Each partner is an agent of every other partner and acts as both a principal and an agent in any business transaction within the scope of the partnership agreement. II. Each partner is subject to joint and several liability on partnership debts and contracts.
Both I and II
Marshall formed a limited partnership for the purpose of engaging in the export-import business. Marshall obtained additional working capital from Franklin and Lee by selling them each a limited partnership interest. Under these circumstances, the limited partnership
Can exist as such only if it is formed under the authority of a state statute.
Fox, Harrison, and Dodge are the general partners of a limited partnership. If the limited partnership certificate is silent on these matters, the general partners
Cannot admit additional limited partners absent unanimous written consent or ratification by the limited partners.
Chuck Borris invested $250,000 for a limited partnership share in Kong-Foo, a company that distributes antique furniture. Which of the following statements is correct?
Chuck's liability for partnership debts is limited to $250,000.
What is a possible disadvantage of forming an LLP as opposed to remaining a general partnership?
Creation and continuation require compliance with statutory provisions.
Which of the following is least likely to dissolve an LLC?
Dissociation by any member.
Dawn was properly admitted as a partner in the ABC Partnership after purchasing Jim's partnership interest. Jim immediately withdrew. The partnership agreement states that the partnership will continue on the withdrawal or admission of a partner. Unless the partners otherwise agree,
Dawn's personal liability for existing partnership debts will be limited to Dawn's interest in partnership property.
James Fine is doing business as Fine's Apparels, a sole proprietorship. In the past year Fine had regularly joined with Charles Walters in the marketing of bathing suits and beach accessories. Which of the following factors is the most important in ascertaining whether Fine and Walters have created a partnership relationship?
Fine and Walters divide the net profits equally on a quarterly basis.
Donald Fisk is a limited partner of Sparta Oil Development. He paid $10,000 for his limited-partnership interest. In addition, he lent Sparta $7,500. Sparta failed to find oil and is in financial difficulty. Upon dissolution and liquidation,
Fisk and all outside general creditors will receive repayment of their loans prior to any other distributions.
Under the Revised Uniform Partnership Act, which of the following statements, if any, are correct regarding the effect of the assignment of an interest in a general partnership? I. The assignee is personally responsible for the assigning partner's share of past and future partnership debts. II. The assignee is entitled to the assigning partner's interest in partnership profits and surplus on dissolution of the partnership.
II only
Ms. Wall is a limited partner of the Amalgamated Limited Partnership. She is insolvent, and her debts exceed her assets by $28,000. Goldsmith, one of Wall's largest creditors, is resorting to legal process to obtain the payment of Wall's debt to him. Goldsmith has obtained a charging order against Wall's limited partnership interest for the unsatisfied amount of the debt. As a result of Goldsmith's action, which of the following will happen?
Goldsmith becomes in effect an assignee of Wall's partnership interest.
Grey and Carr entered into a written partnership agreement to operate a hardware store. Their agreement was silent as to the duration of the partnership. Grey wishes to dissolve the partnership. Which of the following is true?
Grey may dissociate from the partnership at any time.
An LLC may be formed when I. One person files articles of organization with the appropriate secretary of state. II. Two or more persons file articles of organization with the appropriate secretary of state.
I and II
An LLC must maintain which of the following contacts with the state where it was formed? I. An agent for service of process II. An attorney for representation in lawsuits III. An office
I and III only
In the absence of a specific provision in a general partnership agreement, partnership losses will be allocated
In the same manner as partnership profits.
An LLC's articles of organization most likely do not
Include all names of future members.
A limited liability partnership (LLP)
Is typically adopted by providers of professional services.
Which of the following statements is correct regarding a limited liability company's operating agreement?
It is designed to forestall and resolve disputes among the owners.
Which of the following is a true statement about an LLC's operating agreement?
It may address matters such as profit sharing, voting rights, and dissolution.
The limited liability company combines some aspects of all of the following organizations excluding
Joint ventures.
Jones, Smith, and Bay wanted to form a company called JSB Co. but were unsure about which type of entity would be most beneficial based on their concerns. They all desired the opportunity to make tax-free contributions and distributions when appropriate. They wanted earnings to accumulate tax-free. They did not want to be subject to personal holding company tax and did not want double taxation of income. Bay was going to be the only individual giving management advice to the company and wanted to be a member of JSB through his current company, Channel, Inc. Which of the following would be the most appropriate business structure to meet all of their concerns?
Limited liability partnership.
The following are nontax-related characteristics of certain business entities: 1. Unless provided otherwise, all owners have management rights. 2. All owners have limited liability. 3. Formation requires a public filing. 4. A transferee of an owner's financial interest does not become an owner. The entities with the foregoing characteristics are
Limited liability partnerships and limited liability companies.
A business entity has the following nontax-related characteristics: 1 Certain owners have no management rights. 2 Death, bankruptcy, or withdrawal of certain owners does not dissolve the entity. 3 Formation of the entity requires public filing. 4 Capitalization is by the resources of owners. The entity with the foregoing characteristics is a
Limited partnership.
One form of business organization is the limited liability company (LLC). In accordance with many state statutes, an LLC
May have a tax status similar to that of a partnership.
The CPA was preparing the financial statement for a limited liability company. To which of the following would the CPA's report be addressed?
Member
Which of the following parties generally has the most management rights?
Member of a limited liability company.
The owners of a limited liability company are known as which of the following?
Members
Under the RUPA, unless otherwise provided in a general partnership agreement, which of the following statements is true when a partner dies? The deceased partner's executor would automatically become a partner The deceased partner's estate would be free from any partnership liabilities The partnership would be dissolved automatically
NO NO NO
The partners of College Assoc., a general partnership, decided to dissolve the partnership and agreed that none of the partners would continue to use the partnership name. Which of the following events will occur on dissolution of the partnership? Each partner's existing liability would be discharged Each partner's apparent authority would continue
NO YES
Which of the following is an advantage of forming an LLP instead of a general partnership?
Partners are subject to a broad personal liability shield.
Joe Perone was a member of Caddy, Shack, & Perone, a general trading partnership. He died and the partnership is being liquidated in a bankruptcy proceeding, but Perone's estate is substantial. The creditors of the partnership are seeking to collect on their claims from Perone's estate. Which of the following statements is true insofar as their claims are concerned?
Partnership creditors and Perone's personal creditors are on an equal footing regarding the assets of Perone's estate.
X, Y, and Z have capital balances of $30,000, $15,000, and $5,000, respectively, in the XYZ Partnership. The general partnership agreement is silent as to the manner in which partnership losses are to be allocated but does provide that partnership profits are to be allocated as follows: 40% to X, 25% to Y, and 35% to Z. The partners have decided to dissolve and liquidate the partnership. After paying all creditors, the amount available for distribution will be $20,000. X, Y, and Z are individually solvent. Z will
Personally have to contribute an additional $5,500.
Which of the following is a false statement about the taxation of an LLC?
Single-member LLCs must be taxed as corporations.
The advantage of a limited liability company is
Tax status as a pass through entity
Rivers and Lee want to form a partnership. For the partnership agreement to be enforceable, it must be in writing if
The agreement cannot be completed within 1 year from the date of its formation.
Which of the following statements best describes the effect of the assignment of an interest in a general partnership?
The assignment transfers the assignor's interest in partnership profits and losses and the right to distributions.
Which of the following is not a characteristic of both a sole proprietorship and a general partnership?
The death of an owner causes the termination of the business.
Which of the following rights would a limited partner not be entitled to assert?
To be elected as a general partner by a majority vote of the limited partners in number and amount.
The certificate of limited partnership filed in the public records must contain
The name of the partnership and the names of the general partners.
Which of the following will cause the dissolution of a limited partnership?
The occurrence of the time specified in the partners' agreement.
Under the RUPA, in which of the following situations will a partner in an LLP most likely be personally liable?
The partner who personally incurs an obligation in the conduct of partnership business.
Three independent sole proprietors decided to pool their resources and form a partnership. The business assets and liabilities of each were transferred to the partnership. The partnership commenced business on September 1, but the parties did not execute a formal partnership agreement until October 15. Which of the following is true?
The partnership began its existence on September 1.
Swing, Ltd., a limited partnership that supplies sheet music to educational institutions, did not have sufficient profits to make any distributions due to lack of public interest in musical instruments. Wally Worried, a limited partner, is concerned. Which of the following may Wally participate in without jeopardizing his limited partner status?
Voting for removal of the general partner.
The apparent authority of a partner to bind the partnership in dealing with third parties
Will be effectively limited by the filing of a statement of partnership authority.
The partnership of Joe Baker, Art Green, and Guy Madison is insolvent. The partnership's liabilities exceed its assets by $123,000. The liabilities include a $25,000 loan from Madison. Green is personally insolvent. His personal liabilities exceed his personal assets by $13,500. Green has filed a voluntary petition in bankruptcy. Under these circumstances, partnership creditors
Will have the first claim to partnership property to the exclusion of the personal creditors of Green.
When parties intend to create a partnership that will be recognized under the Revised Uniform Partnership Act, they must agree to: Conduct a business for profit Share gross receipts
YES NO
A limited partner
May not withdraw his or her capital contribution absent sufficient limited-partnership property to pay all general creditors.
What term is used to describe a partnership without a specified duration?
A partnership at will.
The assignee of a partnership interest (limited or general) may become a limited partner if
All partners agree.
Fact Pattern: Downs, Frey, and Vick formed the DFV General Partnership to act as manufacturers' representatives. The partners agreed Downs would receive 40% of any partnership profits and Frey and Vick would each receive 30% of such profits. It was also agreed that the partnership would not terminate for 5 years. After the fourth year, the partners agreed to terminate the partnership. At that time, the partners' capital accounts were as follows: Downs, $20,000; Frey, $15,000; and Vick, $10,000. There also were undistributed losses of $30,000. Under the RUPA, if Frey died before the partnership terminated,
Downs and Vick, as a majority of the partners, would have been able to continue the partnership.
Which of the following statements is true concerning liability when a partner in a general partnership commits a tort while engaged in partnership business?
Each partner is jointly and severally liable.
Eller, Fort, and Owens do business as Venture Associates, a general partnership. Trent Corp. brought a breach of contract suit against Venture and Eller individually. Trent won the suit and filed a judgment against both Venture and Eller. Venture then entered bankruptcy. Under the RUPA, Trent will generally be able to collect the judgment in full from
Eller's personal assets.
Ann Grand, a general partner, retired. The partnership held a testimonial dinner for her and invited 10 of its largest customers. A week later a notice was placed in various trade journals indicating that Grand had retired and was no longer associated with the partnership in any capacity. After the appropriate public notice of Grand's retirement, which of the following best describes her legal status?
Grand has the apparent authority to bind the partnership in contracts she makes with persons unaware of her retirement who have previously dealt with the partnership.
Unless otherwise provided in the certificate of limited partnership, which of the following is true if Grey, one of the limited partners, dies?
Grey's personal representative will have all the rights of a limited partner for the purpose of settling the estate.
Laura Lark, a partner in DSJ, a general partnership, wishes to withdraw from the partnership and sell her interest to Ward. All of the other partners in DSJ have agreed to admit Ward as a partner and to hold Lark harmless for the past, present, and future liabilities of DSJ. As a result of Lark's withdrawal and Ward's admission, Ward
Has the right to participate in DSJ's management.
Fact Pattern: Ted Fein, a partner in the ABC Partnership, wishes to withdraw from the partnership and sell his interest to Ian Gold. All of the other partners in ABC have agreed to admit Gold as a partner and to hold Fein harmless for the past, present, and future liabilities of ABC. A provision in the original partnership agreement states that the partnership will continue upon the death or withdrawal of one or more of the partners. As a result of Fein's withdrawal and Gold's admission to the partnership, Gold
Has the right to participate in the management of ABC.
Many states require partnerships to file the partnership name under laws known as fictitious name statutes. These statutes
Have little effect on the creation or operation of a partnership other than the imposition of a fine or other minor penalty for noncompliance.
A general partnership must
Have two or more partners.
A valid limited partnership
May have an unlimited number of partners.
General partners have a fiduciary relationship with each other. Accordingly, a general partner
May not earn a secret profit in dealings with the partnership or partners.
Stanley and Martin formed a partnership to engage in the trucking business. Stanley contributed the capital and Martin was to contribute the labor. However, Stanley did not want his name associated with the partnership due to interests in other trucking businesses. Martin was involved in an accident while carrying goods on behalf of the partnership. Which of the following would Stanley not be liable for as a result of the accident?
Illegal drug activities when Martin was also carrying illegal drugs in the truck unknown to Stanley.
Under the Revised Uniform Partnership Act, which of the following have the right to inspect partnership books and records?
Inactive partners.
A limited partner
Is liable for obligations of the partnership to the extent of his or her capital contribution.
Which of the following statements about the form of a general partnership agreement is true?
It must be in writing if the partnership is to last for longer than 1 year.
Leslie, Kelly, and Blair wanted to form a business. Which of the following business entities does not require the filing of organization documents with the state?
Joint venture.
General partnerships and LLPs vary in terms of
Liability.
Wichita Properties is a limited partnership created in accordance with the provisions of the Uniform Limited Partnership Act. The partners have voted to dissolve and settle the partnership's accounts. Which of the following will be the last to be paid?
Limited and general partners in respect to their undistributed profits.
The XYZ Limited Partnership has two general partners: Smith and Jones. A provision in the partnership agreement allows the removal of a general partner by a majority vote of the limited partners. The limited partners vote to remove Jones as a general partner. Which of the following statements is true?
Limited partners may vote to remove a general partner without losing their status as limited partners.
Which of the following statements is true regarding the apparent authority of a partner to bind the partnership in dealings with third parties? Under the RUPA, the apparent authority
May allow a partner to bind the partnership to representations made in connection with the sale of goods.
Fil and Breed are 50% partners in F&B Cars, a used-car dealership. F&B maintains an average used-car inventory worth $150,000. On January 5, National Bank obtained a $30,000 judgment against Fil and Fil's child on a loan that Fil had cosigned and on which Fil's child had defaulted. National sued F&B to be allowed to attach $30,000 worth of cars as part of Fil's interest in F&B's inventory. Will National prevail in its suit?
No, because the judgment was not against the partnership.
Unless otherwise provided for in the partnership agreement, the assignment of a partner's interest in a general partnership will
Not affect the assigning partner's liability to third parties for obligations existing at the time of the assignment.
Fact Pattern: Ted Fein, a partner in the ABC Partnership, wishes to withdraw from the partnership and sell his interest to Ian Gold. All of the other partners in ABC have agreed to admit Gold as a partner and to hold Fein harmless for the past, present, and future liabilities of ABC. A provision in the original partnership agreement states that the partnership will continue upon the death or withdrawal of one or more of the partners. The agreement to hold Fein harmless for all past, present, and future liabilities of ABC will
Not affect the rights of partnership creditors to hold Fein personally liable for those liabilities of ABC existing at the time of his withdrawal.
Which of the following will result in a dissolution of a partnership under the RUPA?
Notice to a partnership at will of a partner's express will to withdraw.
If no provisions are made in an agreement, a general partnership allocates profits and losses based on the
Number of partners.
Park and Graham entered into a written partnership agreement to operate a retail store. Their agreement was silent as to the duration of the partnership or its purposes. Which of the following statements is true?
Park may dissociate from the partnership at any time.
Locke and Vorst were general partners in a kitchen equipment business. On behalf of the partnership, Locke contracted to purchase 15 stoves from Gage. Unknown to Gage, Locke was not authorized by the partnership agreement to make such contracts. Vorst refused to allow the partnership to accept delivery of the stoves, and Gage sought to enforce the contract. Gage will
Win, because Locke had apparent authority to bind the partnership.
Wind, who has been a partner in the PLW general partnership for 4 years, decides to withdraw from the partnership despite a written partnership agreement that states, "No partner may withdraw for a period of 5 years." Under the Revised Uniform Partnership Act (RUPA), what is the result of Wind's withdrawal?
Wind's withdrawal causes dissociation from the partnership despite being in violation of the partnership agreement.
Under the Revised Uniform Limited Partnership Act and in the absence of a contrary agreement by the partners, which of the following events is most likely to dissolve a limited partnership?
Withdrawal of the only general partner.
When the Revised Uniform Partnership Act applies and there is no general partnership agreement, which of the following events, if any, occur(s) when a partner dies? The partners is dissociated The Deceased partner's estate is free from any partnership liability
YES NO
When a party deals with a partner who lacks actual or apparent authority, a general partnership will be bound by the resulting contract if the other partners: Ratify the Contract Amend the Partnership Agreement
YES NO
Bob decides to start a bicycle repair shop. He is the sole owner and raises additional capital by borrowing from a local bank. Which of the following may become at risk if Bob defaults on the repayment of the loan? Assets of the Bicycle Repair Shop Bob's equity Capital Invested Bobs Personal Assets
YES YES YES
Which of the following statements is true regarding the division of profits in a general partnership when the written partnership agreement only provides that losses be divided equally among the partners? Profits are to be divided
equally among the partners