Chapter 32 Cengage HW
Any partner:
may act as an agent who binds the partnership.
Which of the following results in a rightful dissociation of a partner? (Select all that apply)
A partner provides the partnership with notice of intent to withdraw A partner dies
Is a written agreement required to form a partnership?
No, a partnership can exist without any writings.
If a partner wrongfully dissociates, do they get a vote on whether the partnership should continue?
No, wrongfully dissociating partners do not get to vote on the matter.
Which of the following are essential elements of a partnership? Choose 2 answers.
Profits and losses are shared among the members. All members have equal right to be involved in the management of the business.
Partners have which of the following duties? Select 3 answers.
Record keeping Fiduciary duties Capital contribution
A written agreement outlining the roles of partners, their rights, and their duties are called:
a partnership agreement.
At what point in dissolution does a partner's liability cease?
after the winding up is complete and the partnership is dissolved
Ben and Jerry are partners in an ice cream shop. They both work in the ice cream shop and share profits and expenses equally. Jerry thinks that expanding their ice cream shop to include a soda fountain would attract more customers. Without getting Ben's approval on the deal, Jerry signs a contract with the construction company to begin building the soda fountain. When Ben finds out, he is furious and says that he will not be responsible for payment under the contract. The construction company can enforce the contract against:
both Ben and Jerry.
What are the three ways in which a partnership can be dissolved? (Choose 3 answers.)
by operation of law by an act of the partners by a court decree
Ellie, Josie, and Dylan are partners in a car dealership. Ellie gives notice to Josie and Dylan that she wants to withdraw from the business. As a result of Ellie leaving the partnership, Josie and Dylan:
can either continue the partnership without Ellie or agree to dissolve the partnership.
Which of the following actions will usually dissolve a partnership?
completion of the purpose of the partnership
After dissolution, a partnership's assets are distributed first:
for the payment of debts to partner and non-partner creditors.
Bly and Ahmik are partners in a sandwich shop. They have been struggling for the last couple of years and, finally, decide to close the sandwich shop and dissolve the partnership. During the winding-up process, Ahmik spends most of his time pursuing his next venture, so Bly is handling most of the work involved in collecting and preserving partnership assets and paying the debts of the partnership. If Bly requests payment for his services in winding up the partnership:
he is entitled to payment for those services.
After dissolution, partners still have authority to do which of the following actions on behalf of the partnership? Choose 2 answers.
pay the debts of the partnership complete transactions that were started before dissolution
Ellie, Josie, and Dylan are partners in a car dealership. Ellie gives notice to Josie and Dylan that she wants to withdraw from the partnership, and Josie and Dylan decide to continue the partnership without her. Shortly after Ellie leaves the partnership, she has lunch with an old friend, Justin. Justin has been looking for a new car and asks about the price of a particular car he saw on the website of the dealership, because he does not know that Ellie has left the partnership. Instead of telling Justin that she has left the partnership, Ellie quotes Dylan a price for the car, and Dylan accepts. When Dylan goes to the car dealership to complete the deal:
the dealership must honor the deal unless it has provided Dylan notice of Ellie's dissociation.
A partnership by estoppel is one in which:
the parties are not actually partners but are held liable as if they were.
In determining whether a partnership exists, the court will look at which of the following factors: (Choose 2 answers)
the sharing of management responsibilities the sharing of profits and losses
Jerry Hall and Lawrence Vaught practice law in the same building. They share equally in the overhead expenses, such as rent and utilities, required to keep the business running. Both Jerry and Lawrence handle their own cases, consult and accept their own clients, and purchase their own advertising. Jerry and Lawrence do occasionally handle a case together, and they have stationery that says "Hall and Vaught" on the letterhead. They each have their own stationery as well. Jerry and Lawrence keep their finances separate, except when they handle a case together; then, they split the proceeds equally. When a client of Jerry's becomes dissatisfied and sues Jerry for malpractice, she sues Lawrence as well. In deciding whether or not a partnership exists here, the court will look at:
whether Jerry and Lawrence share profits and losses, whether they own the business jointly, and whether they have an equal right to be involved in the management of the business.
The formation of a partnership without a partnership agreement requires which of the following? Select 2 answers.
Sharing of management duties Sharing of profits and losses
Which of the following happens when a partner dissociates? Choose 2 answers.
The partnership may remain liable for acts of the dissociated partner for two years after dissociation. The dissociated partner's interest in the partnership must be purchased by the partnership.
