FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 37: Partnerships: Termination and Limited Partnerships

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Assuming the limited partnership is properly conducted, what is the maximum amount that a limited partners can be held liable for in a lawsuit against the partnership?

A) Unlimited personal liability.
B) The amount the limited partner brought into the business.
C) The level of liability insurance the partnership purchased for the partners.
D) A court would determine the amount of personal liability of a limited partner.
E) The amount allocated by statute of the state in which the partnership is domiciled.

F) D) and E)
G) A) and B)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Which statement is true regarding the rights of partners to a rightful dissolution of a partnership?

A) All partners can demand that the partnership be wound-up but only the managing partner may participate in the wind-up.
B) The partners may continue the partnership upon majority vote.
C) If the partners unanimously agree, they can continue the business using the partnership's name.
D) Rightful dissolution is by act of a partner only.
E) Rightful dissolution is by act of court only.

F) None of the above
G) C) and D)

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

[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. -Was Fernando's belief that a limited partnership may be created informally through an oral agreement correct?

Which of the following is false regarding the dissolution of a partnership in Germany?

Pietro and Avana have a partnership importing exotic birds from South America. Congress passes a law prohibiting the importation of birds. Does the law have any effect on the partnership?

[Software Dispute] Cole, Kyra, and Morton are partners in a startup company that designs software for the biotechnology industry. Their partnership agreement contained a provision that the partnership would be dissolved when Morton retires, or if any partner commits any act that violates the trust of the other partners. The partnership agreement also provided that all intellectual property related to the business of the partnership, including any patents, be owned by the partnership. Cole decides to open another company, ColeCompany, that would design gaming software. He sets up the company secretively, transfers a patent owned by the partnership to ColeCompany, and does not tell his partners until he is ready to do business at ColeCompany. When Kyra and Morton find out that Cole went behind their backs and opened another business, they tell Cole they can no longer trust him and are dissolving the partnership because of his actions. Cole, who is the software designer for the partnership, tells them if they want to dissolve the partnership, then he will also design software for the biotech industry at ColeCompany. -Was the partnership rightfully dissolved or wrongfully dissolved?

[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. -Which statement is true regarding the issue of Fernando's father deciding to manage the partnership?

[Big Spender] Ryan was a partner in ZYX law firm. He decided to withdraw from the partnership because he wanted to retire early in Costa Rica. The partnership agreement of ZYX law firm did not specify the objective or duration of the partnership. Although Ryan gave proper notice, the other partners claimed that he had no right to withdraw. Ryan was angry and decided to get even. Two days after he withdrew and before the partnership had provided notification to any suppliers of his departure, Ryan went to the office supply store at which he typically purchased supplies on account for the firm. He purchased several cameras, a computer, and other items, which he placed on the firm's account. Ryan just smiled when Joe, the manager at the store, told Ryan that he really appreciated the law firm's business. The next day Ryan headed for Costa Rica and cannot be located. Joe later requests that ZYX firm pay the bill for Ryan's purchases. The law firm, whose members had decided to continue the partnership after the dissolution resulting from Ryan's resignation, refused on the basis that Ryan had no authority to make the purchases. Joe says that he did not know that and that he expects to be paid immediately. -Which statement is true regarding whether the law firm is liable for purchases made by Ryan?

In which phase during the life of a partnership are the partners involved in collecting assets and taking inventory?

A partnership must experience the winding-up stage, but not the dissolution stage, before the partnership may be terminated.

[Software Dispute] Cole, Kyra, and Morton are partners in a startup company that designs software for the biotechnology industry. Their partnership agreement contained a provision that the partnership would be dissolved when Morton retires, or if any partner commits any act that violates the trust of the other partners. The partnership agreement also provided that all intellectual property related to the business of the partnership, including any patents, be owned by the partnership. Cole decides to open another company, ColeCompany, that would design gaming software. He sets up the company secretively, transfers a patent owned by the partnership to ColeCompany, and does not tell his partners until he is ready to do business at ColeCompany. When Kyra and Morton find out that Cole went behind their backs and opened another business, they tell Cole they can no longer trust him and are dissolving the partnership because of his actions. Cole, who is the software designer for the partnership, tells them if they want to dissolve the partnership, then he will also design software for the biotech industry at ColeCompany. -Can Cole design software for the biotech industry at ColeCompany while the partnership is winding-up?

[Candy Company] Milton, Ava, and Hiro own a candy company. The business is failing and Milton is declared bankrupt by the bankruptcy court. Ava wants to keep the business running because she is sure she can turn it around. Hiro tells her that, it's too late, the partnership is already over because of Milton. Ava tells him that no one has asked to end the partnership so they do not have to dissolve. The partnership debts include a loan to the bank, loans Ava made to the company, and the initial capital that all three partners invested. Milton has no money to pay any of their debts. -In what order should the partnership's debts be paid?

[Candy Company] Milton, Ava, and Hiro own a candy company. The business is failing and Milton is declared bankrupt by the bankruptcy court. Ava wants to keep the business running because she is sure she can turn it around. Hiro tells her that, it's too late, the partnership is already over because of Milton. Ava tells him that no one has asked to end the partnership so they do not have to dissolve. The partnership debts include a loan to the bank, loans Ava made to the company, and the initial capital that all three partners invested. Milton has no money to pay any of their debts. -Is Ava correct that they do not have to dissolve the partnership?

In a limited partnership, the general partner has the responsibility in the management of the business.

Raul and Limlin are dissolving their partnership. Raul stops acting as a partner and says that this confirms the dissolution of the partnership. Limlin says that this does not dissolve the partnership. Is Limlin correct?

A general partner has unlimited personal liability for the debts of the limited partnership.

Which of the following was the result in the case in the text, Jack A. Kahn and Denise W. Kahn v. Stewart Mesher and Lieselotte Mesher, the case in which it was claimed that in winding down a partnership, a defending partner wrongfully profited by failing to make appropriate disclosures to other partners regarding an offer to purchase property held by the partnership?

In Spain, which of the following is not a reason for provisional (temporary) dissolution of a partnership?

In Spain, there are two types of dissolutions of partnership possible: ________ and ________.

If the bank loan cannot be paid off after sale of the partnership assets, who is liable for the remainder of the loan?