Question 1

The partnership of Fregeun, Pennell and Jones is dissolving and a dispute has arisen about which debts must be paid first. According to the UPA, who must be paid first when liquidated assets of a partnership are distributed?

Accepted Answer

A)   Any investments made by the partners.
B)   Any capital invested by partners.
C)   Any loans made between the partners that covered the partnership.
D)   Any debt owed to creditors of the partnership
E)   Any bills of ladingF) C) and D)
G) A) and E)

Question 2

[Parental Involvement] Lexie and Fernando, both artists, discussed forming a partnership to paint portraits. Fernando's parents were interested in investing in the partnership, but they wanted to avoid any liability. Fernando suggested forming a limited partnership. He told Lexie and his parents that they could do it very informally, that an oral agreement was sufficient, and that the parents would be protected from liability. However, Lexie insisted that a certificate of limited partnership be filed with the secretary of state, over Fernando's objection that it was a waste of money. After a few months, Lexie and Fernando decided that they wanted to add a new partner, Melissa, to the partnership as a general partner. Melissa had some expertise in the portrait field but she had also had some scrapes with local law enforcement. Fernando's parents objected strenuously to the admission of Melissa. Lexie and Fernando took the position that the parents, as limited partners, had no say in the admission of a new partner. Fernando's father, who had an interest in painting and was concerned that the partnership was not making very much money, decided to start coming to the partnership studio to manage the business and attempt to bring it into profitability.
-Are Fernando and Lexie correct that limited partners have no say regarding the admission of new partners?

Accepted Answer

A)   No, because in order to add a new partner, all partners, including limited partners, must agree.
B)   No, because in order to add a new partner, all general partners must agree and at least one half of limited partners must agree.
C)   No, because in order to add a new partner, at least one half of general partners and one half of limited partners must agree.
D)   They are correct only if all general partners agree that limited partners cannot vote on the matter.
E)   They are correct.F) A) and B)
G) C) and D)

Question 3

Which of the following was the result in the Case Opener involving whether a partner wrongfully caused dissolution of a partnership thereby barring him from recovering damages from other partners based upon improvements to an office building that were not properly approved?

Accepted Answer

A)   That the partner at issue was partially at fault for the wrongful dissolution of the partnership but that he would be entitled to sue for damages because the dissolution was not entirely his fault.
B)   That the partner at issue was partially at fault for the wrongful dissolution of the partnership and that he was therefore barred from recovering damages from the other partners.
C)   That the partner at issue was not at fault for the dissolution of the partnership because expenditures were improperly made by the partnership and hidden from him but that he was barred from recovering damages because the partnership had not yet been wound up.
D)   That the partner at issue was fully at fault for the wrongful dissolution of the partnership and that he was therefore barred from recovering damages from the other partners.
E)   That the partner at issue was not at fault for the dissolution of the partnership because expenditures were improperly made by the partnership and hidden from him and that he could sue for damages based upon the wrongful acts of the other partners.F) B) and E)
G) A) and B)

Question 4

As part of the partnership agreement that Malik and Veronica make with their limited partners, Malik insists on and Veronica and the limited partners agrees to a(n)  ________ that allows the continuing partners to keep partnership property and carry on the partnership business?

Accepted Answer

A)   continuation agreement
B)   property agreement
C)   fulfillment agreement
D)   carry over agreement
E)   extenuating agreementF) A) and E)
G) A) and C)

Question 5

What must the general and limited partners sign and file with a secretary state to receive limited liability?

Accepted Answer

A)   Articles of partnership incorporation.
B)   Partnership liability insurance.
C)   Certificate of Intent to Be Partners.
D)   Certificate of Limited Partnership.
E)   There is no formal requirement for limited partners to sign.F) A) and B)
G) B) and E)

Question 6

Set forth the order the Uniform Partnership Act establishes for the distribution of liquidated assets when a partnership is dissolved and has debt.

Accepted Answer

The Uniform Partnership Act establishes ...

Question 7

Which of the following is not a part of the Life Cycle of a Partnership according to the text?

Accepted Answer

A)   Formation.
B)   Performance.
C)   Annual Dividend Sharing
D)   Dissolution
E)   Winding-Up.F) B) and D)
G) B) and C)

Question 8

[Fishy Fiasco] James agreed to be a limited partner in Ingrid and Darnell's tropical fish importing business. Ingrid and Darnell were general partners. James contributed $10,000 to the partnership as his capital contribution. The partnership made a profit of $30,000 the first year. James was paid nothing. When he inquired, Ingrid told him that a limited partner was only entitled to a share of profits as approved by the general partners and that perhaps things would be better the next year. The next year, however, importation was banned because of a fish disease, and the partnership lost money and owed debts of $60,000. At the end of the year, Ingrid and Darnell asked James to contribute $20,000 to cover the debts. When James complained about the amount, Darnell told him that he and Ingrid were being overly reasonable and that James actually was legally liable for an even larger percentage. In an attempt to keep the business afloat, James told Ingrid and Darnell that they should consider suing a customer who had not paid a large account. Ingrid and Darnell replied, however, that they were morally opposed to lawsuits and that they had the final say on litigation.
-Which statement is true regarding James's entitlement to sue on behalf of the partnership?

Accepted Answer

A)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring the suit.
B)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring suit but only after obtaining the permission of all general partners.
C)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring suit but only after obtaining the permission of a majority of the general partners.
D)   A limited partner has no rights to bring suit on behalf of the partnership.
E)   A limited partner has a right to bring suit on behalf of the partnership only if the litigation is in an amount of over $75,000 and then only with the permission of all general partners.F) None of the above
G) C) and D)

Question 9

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Accepted Answer

A COURT MAY DISSOLVE A PARTNERSHIP FOR T...

Question 10

Which of the following was the result on appeal in Urbain v. Beierling, the case in the text in which the court decides whether or not to dissolve a partnership?

Accepted Answer

A)   The appellate court reversed the dismissal of plaintiff's claims because she was a "co-owner" of partnership property and entitled to a valuation of the property.
B)   The appellate court reversed the dismissal of plaintiff's claims because, although the partnership was not successful, plaintiff was entitled to a distribution of assets.
C)   The appellate court remanded the case to the trial court to determine the amount of assets or profits of the partnership for distribution.
D)   The appellate court affirmed the dismissal of plaintiff's claims because she failed to show she was damaged since there were no assets or profits of the partnership to distribute to her.
E)   The appellate court affirmed the dismissal of plaintiff's claims because she failed to show she was a "co-owner" of the partnership.F) D) and E)
G) None of the above

Question 11

Which of the following is false regarding dissolution of a partnership either by act of a partner or by operation of law?

Accepted Answer

A)   Death of a partner results in dissolution of a partnership by operation of law.
B)   A partnership engaging in an activity that suddenly becomes illegal results in dissolution of a partnership by operation of law.
C)   A partner's engagement in any other business activity results in dissolution of a partnership through an act by a partner.
D)   A partner withdrawing from the partnership at will results in dissolution through an act by a partner.
E)   A partner withdrawing or being expelled pursuant to the partnership agreement results in dissolution through an act by a partner.F) B) and C)
G) A) and D) C

Question 12

Shawn and Jasmine want to start a partnership to sell hand woven sweaters. Jasmine's parents would like to invest, but they do not wish to be subject to liability for losses in excess of their capital contribution. Jasmine's mother tells Shawn and Jasmine that if she invests, she expects to have a significant say in the management of the business. Should Shawn, Jasmine, and Jasmine's parents enter into a limited partnership with the parents being limited partners, and why or why not? Would a limited liability company be a good option, and why or why not?

Accepted Answer

The parties should not enter into a limited partnership because the limited liability available to limited parties will likely be lost upon the participation in management. A limited liability company would be a good option because Jasmine's parents could avoid personal liability while maintaining the option to participate in management.

Question 13

Tino, Jesse, Aldo, and Inez have a partnership. Tino and Jesse are general partners and the others are limited partners. Tino wants to add his cousin Manny to the partnership. Whose consent does Tino need to add Manny?

Accepted Answer

A)   He does not need consent to add another limited partner.
B)   Only Jesse, unless Manny will be a general partner, then he needs consent of all partners.
C)   He needs a majority of the partners to add another partner.
D)   Only Jesse, because Aldo and Inez are limited partners
E)   Jesse, Aldo, and Inez.F) B) and D)
G) B) and E)

Question 14

[Fishy Fiasco] James agreed to be a limited partner in Ingrid and Darnell's tropical fish importing business. Ingrid and Darnell were general partners. James contributed $10,000 to the partnership as his capital contribution. The partnership made a profit of $30,000 the first year. James was paid nothing. When he inquired, Ingrid told him that a limited partner was only entitled to a share of profits as approved by the general partners and that perhaps things would be better the next year. The next year, however, importation was banned because of a fish disease, and the partnership lost money and owed debts of $60,000. At the end of the year, Ingrid and Darnell asked James to contribute $20,000 to cover the debts. When James complained about the amount, Darnell told him that he and Ingrid were being overly reasonable and that James actually was legally liable for an even larger percentage. In an attempt to keep the business afloat, James told Ingrid and Darnell that they should consider suing a customer who had not paid a large account. Ingrid and Darnell replied, however, that they were morally opposed to lawsuits and that they had the final say on litigation.
-Which statement is true regarding James' entitlement to share in profits?

Accepted Answer

A)   During the first year of business, a limited partner is not legally entitled to a share of the profits.
B)   During the first year of business, a limited partner is only entitled to a share of the profits at the discretion of the general partners.
C)   A limited partner is generally entitled to a share of the profits, but during the first year of business, a limited partner is only entitled to one-half of whatever the share would normally have been.
D)   During the first year of business and also in subsequent years, a limited partner has a right to share in the profits.
E)   A new limited partner is only entitled share in the profits after a partnership has been successful for three consecutive years.F) B) and D)
G) None of the above

Question 15

Which of the following is true about limited partners?

Accepted Answer

A)   A limited partner has no right to participate in management, has limited liability up to the amount of his or her assumption of debt, and is an agent of the partnership.
B)   A limited partner has a limited right to participate in management, has limited liability up to the amount of capital, and is not an agent of the partnership.
C)   A limited partner has no right to participate in management, has limited liability up to the amount of his or her assumption of debt, and is not an agent of the partnership.
D)   A limited partner has no right to participate in management, has limited liability up to the amount of capital, and is not an agent of the partnership.
E)   A limited partner has a limited right to participate in management, has limited liability up to the amount of capital, and is an agent of the partnership.F) B) and D)
G) None of the above

Question 16

To ensure that a dissolving partner does not create additional liability for the partnership, which of the following is true regarding notice to be provided to a third party that has provided credit to a partnership?

Accepted Answer

A)   There is no requirement that notice be provided because by law, the dissolving partner has no authority to bind the partnership.
B)   The third party may be notified through advertisement in the newspaper.
C)   The third party may be notified through a general post on the Internet at the partnership's website.
D)   The third party must be provided direct verbal or written notice.
E)   The third party must be provided written notice based on the statute of frauds.F) A) and B)
G) A) and C)

Question 17

When a partner dissolves a partnership in violation of the partnership agreement, this is known as ________.

Accepted Answer

A)   wrongful termination
B)   termination without cause
C)   wrongful dissolution
D)   termination at will
E)   dissolution by conflictF) B) and C)
G) A) and C)

Question 18

A partner being expelled from the partnership in accordance with the partnership agreement is not a reason for rightful dissolution of the partnership.

Accepted Answer

A) True 
 B)False

Question 19

In a suit alleging wrongful dissolution, if the partner dissolves a partnership in violation of the partnership agreement, they are not liable, they simply must fix the underlying issue.

Accepted Answer

A) True 
 B)False  False

Question 20

A limited partnership is an agreement between ________

Accepted Answer

A)   at least one general partner and one limited partner
B)   at least one general partner and two limited partners
C)   at least two general partners and one limited partner
D)   at least two general partners and two limited partners
E)   each state sets the amount of general and limited partners by statute.F) B) and C)
G) B) and E)

Exam 37: Partnerships: Termination and Limited Partnerships

The partnership of Fregeun, Pennell and Jones is dissolving and a dispute has arisen about which debts must be paid first. According to the UPA, who must be paid first when liquidated assets of a partnership are distributed?

Correct Answer
verified

Correct Answer
verified

Which of the following was the result in the Case Opener involving whether a partner wrongfully caused dissolution of a partnership thereby barring him from recovering damages from other partners based upon improvements to an office building that were not properly approved?

Correct Answer
verified

As part of the partnership agreement that Malik and Veronica make with their limited partners, Malik insists on and Veronica and the limited partners agrees to a(n) ________ that allows the continuing partners to keep partnership property and carry on the partnership business?

Correct Answer
verified

What must the general and limited partners sign and file with a secretary state to receive limited liability?

Correct Answer
verified

Set forth the order the Uniform Partnership Act establishes for the distribution of liquidated assets when a partnership is dissolved and has debt.

Correct Answer
verified
The Uniform Partnership Act establishes ...
View Answer

Which of the following is not a part of the Life Cycle of a Partnership according to the text?

Correct Answer
verified

Correct Answer
verified

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Correct Answer
verified
A COURT MAY DISSOLVE A PARTNERSHIP FOR T...
View Answer

Which of the following was the result on appeal in Urbain v. Beierling, the case in the text in which the court decides whether or not to dissolve a partnership?

Correct Answer
verified

Which of the following is false regarding dissolution of a partnership either by act of a partner or by operation of law?

Correct Answer
verified
C

Tino, Jesse, Aldo, and Inez have a partnership. Tino and Jesse are general partners and the others are limited partners. Tino wants to add his cousin Manny to the partnership. Whose consent does Tino need to add Manny?

Correct Answer
verified

Correct Answer
verified

Which of the following is true about limited partners?

Correct Answer
verified

To ensure that a dissolving partner does not create additional liability for the partnership, which of the following is true regarding notice to be provided to a third party that has provided credit to a partnership?

Correct Answer
verified

When a partner dissolves a partnership in violation of the partnership agreement, this is known as ________.

Correct Answer
verified

A partner being expelled from the partnership in accordance with the partnership agreement is not a reason for rightful dissolution of the partnership.

Correct Answer
verified

In a suit alleging wrongful dissolution, if the partner dissolves a partnership in violation of the partnership agreement, they are not liable, they simply must fix the underlying issue.

Correct Answer
verified
False

A limited partnership is an agreement between ________

Correct Answer
verified

Exam 37: Partnerships: Termination and Limited Partnerships

The partnership of Fregeun, Pennell and Jones is dissolving and a dispute has arisen about which debts must be paid first. According to the UPA, who must be paid first when liquidated assets of a partnership are distributed?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following was the result in the Case Opener involving whether a partner wrongfully caused dissolution of a partnership thereby barring him from recovering damages from other partners based upon improvements to an office building that were not properly approved?

Correct AnswerverifiedShow Answer

As part of the partnership agreement that Malik and Veronica make with their limited partners, Malik insists on and Veronica and the limited partners agrees to a(n) ________ that allows the continuing partners to keep partnership property and carry on the partnership business?

Correct AnswerverifiedShow Answer

What must the general and limited partners sign and file with a secretary state to receive limited liability?

Correct AnswerverifiedShow Answer

Set forth the order the Uniform Partnership Act establishes for the distribution of liquidated assets when a partnership is dissolved and has debt.

Correct AnswerverifiedThe Uniform Partnership Act establishes ...View AnswerShow Answer

Which of the following is not a part of the Life Cycle of a Partnership according to the text?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Correct AnswerverifiedA COURT MAY DISSOLVE A PARTNERSHIP FOR T...View AnswerShow Answer

Which of the following was the result on appeal in Urbain v. Beierling, the case in the text in which the court decides whether or not to dissolve a partnership?

Correct AnswerverifiedShow Answer

Which of the following is false regarding dissolution of a partnership either by act of a partner or by operation of law?

Correct AnswerverifiedC

Tino, Jesse, Aldo, and Inez have a partnership. Tino and Jesse are general partners and the others are limited partners. Tino wants to add his cousin Manny to the partnership. Whose consent does Tino need to add Manny?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true about limited partners?

Correct AnswerverifiedShow Answer

To ensure that a dissolving partner does not create additional liability for the partnership, which of the following is true regarding notice to be provided to a third party that has provided credit to a partnership?

Correct AnswerverifiedShow Answer

When a partner dissolves a partnership in violation of the partnership agreement, this is known as ________.

Correct AnswerverifiedShow Answer

A partner being expelled from the partnership in accordance with the partnership agreement is not a reason for rightful dissolution of the partnership.

Correct AnswerverifiedShow Answer

In a suit alleging wrongful dissolution, if the partner dissolves a partnership in violation of the partnership agreement, they are not liable, they simply must fix the underlying issue.

Correct AnswerverifiedFalse

A limited partnership is an agreement between ________

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Uniform Partnership Act establishes ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A COURT MAY DISSOLVE A PARTNERSHIP FOR T...
View Answer

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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