bus 251- chapter 28 assessment

To date, how many states in the US have adopted all or substantial portions of the Revised Uniform Partnership Act?

About 80 percent, 40 states.

Dissolving a limited partnership requires:

a unanimous vote of the general partners and consent of any limited partner who owns a majority of the rights to receive a distribution as a limited partner.

When an LLP is formed, who files the initial paperwork?

An individual representing two or more persons desiring to start a new business. Correct

Boris, Carina, and Theo have decided to go into business as a limited partnership importing and selling exotic spices. Boris and Carina will manage the business, and Theo will have no role in the day-to-day operations. Boris and Carina have each invested $500,000, and Theo has contributed the building and land that the business will be operated from. Alina, a customer, contracts a rare disease from a contaminated spice sold by the company and sues. Alina is awarded a judgment for $5 million. After she exhausts the assets of the partnership, having the property and building sold, and seizing all other property, $3 million remains unpaid.

Boris and Carina each owe $3 million jointly and severally, so Alina may sue one or both of them; Theo has no additional liability.

Christin and Paola operate a business in which both have contributed $50,000 to the business's capitalization. Christin makes all business decisions, and Paola made Christin sign a partnership agreement saying that Paola is liable only for partnership debts up to $50,000.

Christin is a general partner, and Paola is a limited partner.

When a partnership has reached its agreed-upon term or when the partners unanimously agree to end the partnership this is called

Dissolution

All of the following are fiduciary duties of partners to the partnership except

Duty of wisdom

The duty of a partner to act in the best interests of the partnership is called __________ duty.

Fiduciary

Limited partnerships are required to file a(n) __________ return with the IRS each year.

Information

General partners' personal assets are at risk both together and separately for all debts and liabilities of the partnership regardless of the source of the debt or liability is called

Joint and several liability

Personal financial contributions may be required by previous agreement with regard to

LLPs.

A partnership where the partners have not agreed to remain partners until the expiration of a definite term or event is known as __________.

Partnership at will

Siegfried and Roy enter into a white tiger training business as partners, but did not create a partnership agreement. Much to Roy's disappointment, Siegfried is terrified of tigers and refuses to do any of the work. Therefore, Roy shoulder 95 percent of the labor while Siegfried only answer the office phone on occasion when he feels like it. At the end of the fiscal year, because of all of Roy's hard work, the business makes $1,000,000.00 in profit. How much will each partner get of the profit?

Siegfried and Roy will split the profit 50/50.

Limited liability partnerships are formed when a general partnership files a __________.

Statement of qualification

In the case, Meinhard v. Salmon, the court ruled

That Salmon breached his duty of loyalty.

Principals generally have no personal liability for the business entity's debts regarding

corporations.

All income and losses of an LLP are reported

on the partners' individual returns.

A general partnership may be formed by

oral, written, or implied agreement.

Which of the following does not require two or more principals?

sole proprietorships

Redrock GP has decided to go out of business. Selling the partnership assets and making payments to creditors will occur during the __________ phase of the closing of a partnership.

winding-up