Assess: Partnerships
Assuming that the partnership agreement contains no provisions for involuntary dissociation of a partner, which of the following is LEAST LIKELY to result in involuntary dissociation? A A partner entity to the partnership dissolves. B A partner becomes bankrupt. C A court orders that a partner must be dissociated. D A majority of the partners vote that a partner should be disassociated.
A majority of the partners vote that a partner should be disassociated.
Which of the following BEST states a partner's liability for partnership obligations? A An incoming partner is only liable for preexisting contract obligations, not tort obligations. B Partners are liable in proportion to their capital contributions. C Partnership creditor may only go after the partners' personal assets after exhausting the partnership's assets. D A partner is personally, jointly and severally liable for all partnership obligations.
A partner is personally, jointly and severally liable for all partnership obligations.
Which of the following BEST states the rule for when partnerships are liable for a partner's tortious conduct. A A partnership is only liable in tort for a partner's intentional torts. B A partnership is only liable in tort for a partner's torts committed with explicit authority. C A partnership is liable in tort for torts committed by partners acting within the scope of their partnership. D A partnership is liable in tort for all of a partner's intentional torts.
A partnership is liable in tort for torts committed by partners acting within the scope of their partnership.
Which of the following provisions in a partnership agreement is MOST likely to be enforceable? A A restriction on the transfer of partnership interests B Denial of a partner's right to access partnership records C Waiver of a partner's duty of care D Waiver of a partner's personal liability to third parties
A restriction on the transfer of partnership interests
Which of the following is LEAST likely to violate a partner's fiduciary duty of loyalty to the partnership? A Charging the partnership reasonable interest for a loan made to the partnership B Lobbying for an interest adverse to the partnership's best interests C Usurping a partnership opportunity D Running a side business in direct competition with the partnership
Charging the partnership reasonable interest for a loan made to the partnership
Which of the following is MOST LIKELY to constitute participation in the running of an LP that would expose a limited partner to third-party liability? A Owning shares in the corporation serving as general partner B Winding up the partnership's affairs upon dissolution C Attending partnership meetings D Entering a contract on behalf of the partnership
Entering a contract on behalf of the partnership
Which of the following statements regarding limited liability partnerships is FALSE? A Limited partners are not personally liable for the obligations of the LLP. B Like partnership formation, LLP formation does not require any formal filing with the state. C Transforming a general partnership into an LLP requires an authorizing vote. D Partners can voluntarily transform and cancel LLP status.
Like partnership formation, LLP formation does not require any formal filing with the state
Which of the following is LEAST likely to violate a partner's fiduciary duty of care to the partnership? A Intentional misconduct B Negligent conduct C Reckless conduct D Knowing unlawful conduct
Negligent conduct
Which of the following statements regarding limited partnerships is FALSE? A LP formation requires a formal filing with the state. B No partners are personally liable for the obligations of the LP. C An LP requires at least one general partner and one limited partner. D The limited partnership comes into existence upon the filing of the certificate unless the certificate specifies a later date.
No partners are personally liable for the obligations of the LP.
Which of the following is TRUE regarding transferring a partnership interest? A A new partner may be introduced any time a majority of existing partners consent to the new partner. B By default, a partner does not have the right to transfer their partnership interest unless the partnership agreement provides that right. C Partners may agree to change the default rule to require a majority vote of the partners to approve transfer of a partnership interest. D If a partner attempts to convey her interest to somebody else, it dissolves the entire partnership.
Partners may agree to change the default rule to require a majority vote of the partners to approve transfer of a partnership interest
Which of the following is LEAST LIKELY to be a valid and enforceable provision of a partnership agreement? A Partners may only access partnership records in person, not by using an authorized agent. B All business matters must be approved by a majority of the partners. C All business matters must be approved unanimously by the partners. D All partners must be present at a meeting for an extraordinary business measure to be approved at that meeting.
Partners may only access partnership records in person, not by using an authorized agent.
What is the required intent to form a partnership? A Specific intent to share profits B Specific intent to form a partnership C Specific intent to carry on a for-profit business as co-owners D General intent to form a partnership
Specific intent to carry on a for-profit business as co-owners
Which of the following will NOT dissolve an at-will partnership? A A judicial determination of dissolution B The dissociation of a partner C An event that makes it unlawful to continue that has not been cured within 90 days D The completion of the partnership's primary undertaking
The completion of the partnership's primary undertaking
Which of the following statements regarding the division of profits and losses in a partnership is FALSE? A The division of profits and losses is generally dictated or determined by agreement. B The division of profits and losses need not be the same. C When there is no partnership agreement regarding division of profits, profits are divided evenly. D When there is no partnership agreement regarding division of losses, losses are divided in accordance with capital contribution.
When there is no partnership agreement regarding division of losses, losses are divided in accordance with capital contribution.
When does a presumption arise that legal persons have a partnership relationship with one another? A When they hold themselves out as a partnership B When they share profits from a business C When they share expenses of running the business D When they file a partnership agreement with the state
When they share profits from a business
A partner's apparent authority depends on the __________________________________________________.
partnership's communication with third parties