Question 1

If a partner's act is not apparently for carrying on in the ordinary course the partnership business:
A) the partnership is bound only where the partner has actual authority.
B) the third person dealing with the partner becomes liable along with the partner.
C) the partner is necessarily acting without authority.
D) the partnership is bound anyway because a partner always has authority to bind the partnership.

Accepted Answer

In situations where a partner's actions do not seem to be for conducting the usual business of the partnership, the partnership is only bound by those actions if the partner had actual authority to perform them. This is because partners are generally presumed to have authority for acts in the ordinary course of business, but for acts outside of that scope, specific, actual authority is required.

Question 2

Jane,Kelly,and Lois are partners in an accounting firm,but Jane intends to retire and withdraw from the partnership at the end of the year.Under the RUPA,Jane is liable to the firm's creditors:
A) for a partnership obligation incurred within two years after her dissociation if at the time of entering into the transaction the other party reasonably believed Jane was then a partner,did not have notice of Jane's dissociation,and is not deemed to have had constructive notice of the dissociation.
B) only for all debts incurred prior to her retirement.
C) until the day of her retirement when she will be absolved of all liability.
D) for an amount not to exceed her partnership interest on the day of her retirement.

Accepted Answer

Under the RUPA, a dissociated partner is liable to the firm's creditors for partnership obligations incurred within two years after dissociation if the other party reasonably believed the partner was still a partner, had no notice of the dissociation, and is not deemed to have had constructive notice of the dissociation. Therefore, Jane would be liable for a partnership obligation incurred within two years after her dissociation if these conditions are met.

Question 3

Under the RUPA,in which of the following situations may a court order dissolution upon application by a partner?
A) An event makes it unlawful to continue substantially all of the partnership's business.
B) A definite term for the partnership has expired.
C) A partner files a petition for personal bankruptcy.
D) The court finds the economic purpose of the partnership is likely to be unreasonably frustrated.

Accepted Answer

The answer of Under the RUPA,in which of the following...

Question 4

A partner has ____ authority to hire and fire employees whose services are necessary to carry on the business of the partnership.
A) actual implied
B) apparent
C) no
D) limited

Accepted Answer

A partner has actual implied authority to hire and fire employees whose services are necessary to carry on the business of the partnership. This means that it is understood and accepted that partners have the power to perform necessary actions to carry out the business of the partnership, even if it is not explicitly stated in the partnership agreement.

Question 5

Which of the following is true regarding an insolvent partnership under the UPA?
A) The partners must contribute their respective share to the losses in order to pay creditors.
B) If one of the partners is out of the jurisdiction and refuses to contribute,the other parties must contribute the additional amount necessary to pay the firm's liabilities in the relative proportions in which they share the profits.
C) Any partner who pays an amount in excess of his proper share of the losses has a right of contribution against the partners who have not paid their share.
D) All of these are true.

Accepted Answer

All of the statements are true regarding an insolvent partnership under the UPA. According to Section 25 of the Uniform Partnership Act, when a partnership is insolvent, the partners must contribute their respective share to the losses in order to pay creditors. If one of the partners is out of the jurisdiction and refuses to contribute, the other parties must contribute the additional amount necessary to pay the firm's liabilities in the relative proportions in which they share the profits. And finally, any partner who pays an amount in excess of his proper share of the losses has a right of contribution against the partners who have not paid their share. Therefore, option D is the correct choice.

Question 6

Shannon has just become a partner in A & R Accounting Partnership.Her capital contribution is $10,000,which she paid from her savings.Which of the following is correct with respect to Shannon's liability for partnership obligations?
A) Shannon has no liability for partnership debts that existed at the time of her admission as a partner.
B) Shannon is liable only to the extent of her capital contribution for partnership debts that occur after her admission as a partner.
C) Shannon has unlimited personal liability for all partnership debts regardless of whether they were incurred before or after she became a partner.
D) Shannon has unlimited personal liability for all partnership obligations that occur after she became a partner;she has liability to the extent of her capital contribution for obligations that existed at the time she became a partner.

Accepted Answer

According to the principle of unlimited liability, partners are personally liable for all partnership debts and obligations. Therefore, Shannon has unlimited personal liability for all partnership obligations that occur after she became a partner. However, she is only liable to the extent of her capital contribution for obligations that existed at the time she became a partner. This means that if the partnership had debts or obligations prior to Shannon's admission as a partner, she would not be personally liable for those pre-existing obligations beyond her capital contribution of $10,000.

Question 7

A partner:
A) cannot be held criminally liable for the crimes of his partners.
B) may be criminally liable for the crimes of his partners if he authorized the acts.
C) who commits a tort is liable to the third party only through the partnership entity.
D) has joint and several liability with his partners for contracts entered and for torts and crimes committed by other partners.

Accepted Answer

A partner may be criminally liable for the crimes of his partners if he authorized those acts, indicating a direct involvement or endorsement of the criminal behavior.

Question 8

Under the UPA,which of the following requires the unanimous consent of the partners?
A) Submission of a partnership claim to arbitration
B) Confession of judgment
C) Disposing of the goodwill of the business
D) All of these require the unanimous consent of the partners.

Accepted Answer

All three options listed require unanimous consent of the partners. Submission of a partnership claim to arbitration allows for resolution of disputes outside of court, but requires agreement from all partners to participate. Confession of judgment is a legal action where a partner admits fault and allows the other partners to sue them for damages, which can have significant financial implications for the business and therefore requires agreement from all partners. Disposing of the goodwill of the business means selling the intangible value or reputation of the company, which can greatly impact its future profitability and also requires unanimous consent.

Question 9

Where a partner acts without either actual or apparent authority,the partnership:
A) cannot be bound.
B) is bound only if it ratifies the act.
C) is bound only if the third person did not know the partner was acting on behalf of the partnership.
D) is bound under all circumstances,since the partner is an agent of the partnership.

Accepted Answer

The partnership is only bound by the actions of a partner without actual or apparent authority if the partnership ratifies those actions. Ratification can be explicit or implied, but it must occur for the partnership to be legally bound by the partner's actions.

Question 10

Enzo and Watson Partnership agrees to hire an "errand runner" 20 hours per week for the summer.Alan Watson,a partner,interviews a college student and decides to offer her the job.But she says she needs a 40-hour-a-week job,so Alan agrees to make it 40 hours.What result?
A) Enzo and Watson Partnership is not bound to hire her.
B) Enzo and Watson Partnership is bound to pay her for 40 hours per week.
C) Alan is personally bound to pay her for 20 hours per week.
D) Alan is personally bound to pay her for 40 hours per week.

Accepted Answer

Enzo and Watson Partnership have agreed to hire an errand runner for 20 hours per week, but they offered the job to a college student who requested a full-time 40-hour-a-week job. Alan, a partner, agreed to make it a 40-hour-a-week job. Therefore, Enzo and Watson Partnership is bound to pay her for 40 hours per week as agreed upon by one of their partners.

Question 11

Under the UPA,in what circumstances do the remaining partners after dissolution have the right to continue the partnership?

Accepted Answer

The answer of Under the UPA,in what circumstances do the...

Question 12

David,a partner in the Tri-State Express Mail delivery partnership,negligently drove his delivery truck onto the curb during a rush-hour package delivery.Marlene was injured.Against whom can Marlene collect?
A) Only David
B) Only the other partners
C) Tri-State Express Mail Partnership or any partner
D) Only Tri-State Express Mail Partnership

Accepted Answer

Marlene can collect from both the partnership and any partner who was involved in the negligence. Since David is a partner in the Tri-State Express Mail delivery partnership, he is also liable for the negligence. Therefore, Marlene can collect from either the partnership or David. The other partners may not be directly involved in the negligence but they can still be held liable under the rule of vicarious liability.

Question 13

Under the RUPA,a partner's dissociation:
A) terminates the partner's right to participate in the management and conduct of the partnership business.
B) eliminates that partner's right to participate in winding up the partnership.
C) does not terminate the duty not to compete with the partnership until the process of winding up the partnership has been completed.
D) terminates that partner's duty to account to the firm for any fees received on behalf of the partnership.

Accepted Answer

Under the Revised Uniform Partnership Act (RUPA), a partner's dissociation terminates their right to participate in the management and conduct of the partnership business.

Question 14

Chuck,Bob,and Bert form CB&B Partnership to run a specialty grocery store.Bert is the day-to-day manager of the store,Bob buys the groceries,and Chuck does all the administrative work.Bob decides he would like a new car to drive to visit prospective wholesalers.He makes a contract with Big Ben Motors in the name of CB&B without consulting Chuck and Bert.The partnership is:
A) bound by Bob's actual implied authority to buy a car.
B) bound by Bob's apparent authority to buy a car.
C) bound by Bob's ostensible authority to buy a car.
D) not bound because buying a car is outside the scope of the partnership business.

Accepted Answer

Bob's role in the partnership is to buy groceries, not vehicles. Making a contract for a car, especially without consulting the other partners, falls outside the scope of the partnership's business and his authority within that business.

Question 15

A(n)____ imposes partnership duties and liabilities upon a nonpartner who has either represented himself or consented to be represented as a partner.
A) accounting
B) delectus personae
C) fiduciary proceeding
D) partnership by estoppel

Accepted Answer

Partnership by estoppel occurs when a non-partner is held liable as if they were a partner because they either represent themselves as a partner or fail to correct the impression that they are a partner. This imposes the same duties and liabilities on the non-partner as if they were a true partner.

Question 16

The RUPA provides that partners are ____ liable on all contract obligations of the partnership.
A) jointly and severally
B) strictly
C) not
D) partially

Accepted Answer

According to the RUPA (Revised Uniform Partnership Act), partners are jointly and severally liable on all contract obligations of the partnership. This means that each partner is individually responsible for the entire amount of the obligation.

Question 17

Under the UPA,which of the following acts does not bind the partnership unless authorized by all of the partners?
A) Selling goods in the ordinary course of the partnership business
B) Use of partnership property for partnership business
C) Acting as an agent for the partnership
D) Confessing judgment in a claim against the partnership

Accepted Answer

Confessing judgment in a claim against the partnership requires authorization from all partners, as it involves legally binding the partnership to a settlement or judgment without the opportunity for a trial. The other choices (A, B, and C) are actions that are considered within the scope of partnership business and can be authorized by any partner unless the partnership agreement states otherwise.

Question 18

Nolan is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car.The customer sues the partnership and recovers $6,000 in damages.What liability do the other partners have for Nolan's actions?
A) No liability
B) Liability based on their capital contributions
C) Individual liability but not joint liability
D) Joint and several liability

Accepted Answer

In a partnership, partners have joint and several liability for the actions of any partner acting within the scope of the partnership's business. This means that each partner is individually liable for the full amount of the damages, not just a portion based on their capital contributions. Therefore, the other partners in this case would also have joint and several liability for the $6,000 in damages caused by Nolan's negligence.

Question 19

Which of the following is true of dissociation?
A) All of the common law causes of dissociation are also causes under the RUPA.
B) A partner has the power to dissociate at any time by expressing the intent to withdraw from the partnership.
C) Which dissociations are wrongful are set forth by statute and cannot be modified by the partnership agreement.
D) The partnership agreement cannot modify the effects of wrongful dissociation.

Accepted Answer

Under both the common law and RUPA, a partner has the power to dissociate at any time by expressing the intent to withdraw from the partnership. Options A, C, and D are incorrect because not all common law causes of dissociation are also causes under RUPA, which also allows for wrongful dissociation to be modified by the partnership agreement.

Question 20

The Star General Partnership had assets worth $34,000 after liquidation.Frank,Gene,and Hank,equal partners,each contributed $3,000 into the capital pool at the inception of the business.Gene later loaned the business $5,000.They owe $23,000 to creditors.What will Gene get in distribution,assuming there is no agreement on the distribution of profits?
A) $5,000
B) $7,000
C) $8,000
D) $11,000

Accepted Answer

Gene will first be repaid his loan of $5,000 as a creditor. After paying all creditors ($23,000), the remaining $11,000 is divided equally among the three partners, giving Gene an additional $3,667. Thus, Gene gets a total of $8,667, but since this option is not available, the closest correct choice is $7,000.

Quiz 31: Operation and Dissolution of General Partnerships

If a partner's act is not apparently for carrying on in the ordinary course the partnership business:

Jane,Kelly,and Lois are partners in an accounting firm,but Jane intends to retire and withdraw from the partnership at the end of the year.Under the RUPA,Jane is liable to the firm's creditors:

Under the RUPA,in which of the following situations may a court order dissolution upon application by a partner?

A partner has ____ authority to hire and fire employees whose services are necessary to carry on the business of the partnership.

Which of the following is true regarding an insolvent partnership under the UPA?

Shannon has just become a partner in A & R Accounting Partnership.Her capital contribution is $10,000,which she paid from her savings.Which of the following is correct with respect to Shannon's liability for partnership obligations?

A partner:

Under the UPA,which of the following requires the unanimous consent of the partners?

Where a partner acts without either actual or apparent authority,the partnership:

Enzo and Watson Partnership agrees to hire an "errand runner" 20 hours per week for the summer.Alan Watson,a partner,interviews a college student and decides to offer her the job.But she says she needs a 40-hour-a-week job,so Alan agrees to make it 40 hours.What result?

Under the UPA,in what circumstances do the remaining partners after dissolution have the right to continue the partnership?

David,a partner in the Tri-State Express Mail delivery partnership,negligently drove his delivery truck onto the curb during a rush-hour package delivery.Marlene was injured.Against whom can Marlene collect?

Under the RUPA,a partner's dissociation:

A(n) ____ imposes partnership duties and liabilities upon a nonpartner who has either represented himself or consented to be represented as a partner.

The RUPA provides that partners are ____ liable on all contract obligations of the partnership.

Under the UPA,which of the following acts does not bind the partnership unless authorized by all of the partners?

Nolan is driving a truck delivering goods for his partnership when he negligently backs into a customer's new car.The customer sues the partnership and recovers $6,000 in damages.What liability do the other partners have for Nolan's actions?

Which of the following is true of dissociation?