Ch. 15.3 (test 3)

Which of the following is necessary content of the limited partnership certificate? 1. The name of the limited partnership 2. The address of its office 3. The latest date upon which the limited partnership is to dissolve

1, 2, 3

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.

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.

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.

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.

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.

The assignee of a partnership interest (limited or general) may become a limited partner if

All partners agree.

What is a possible disadvantage of forming an LLP as opposed to remaining a general partnership?

Creation and continuation require compliance with statutory provisions.

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.

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.

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.

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.

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.

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.

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.

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.

A limited partner

Is liable for obligations of the partnership to the extent of his or her capital contribution.

A limited liability partnership (LLP)

Is typically adopted by providers of professional services.

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.

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 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.

A business entity has the following nontax-related characteristics: Certain owners have no management rights. Death, bankruptcy, or withdrawal of certain owners does not dissolve the entity. Formation of the entity requires public filing. Capitalization is by the resources of owners. The entity with the foregoing characteristics is a

Limited partnership.

A valid limited partnership

May have an unlimited number of partners.

A limited partner

May not withdraw his or her capital contribution absent sufficient limited-partnership property to pay all general creditors.

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.

A limited partner's capital contribution to the limited partnership

Results in the limited partner having an intangible personal property right.

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.

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.

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.

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.

Which of the following statements regarding a limited partner is(are) usually true? 1. The limited partner is subject to personal liability for partnership debts. 2. The limited partner has the right to take part in the control of the partnership.

neither