Question 1

A partner has the power to dissociate at any time by expressing the intent to withdraw.

Accepted Answer

According to the Uniform Partnership Act, a partner has the power to dissociate at any time by expressing the intent to withdraw.

Question 2

If the general partnership is bound by a contract, then each individual general partner has unlimited personal liability for that obligation.

Accepted Answer

In a general partnership, each partner is jointly and severally liable for the debts and obligations of the partnership. This means that if the partnership is bound by a contract, each partner is personally responsible for fulfilling the obligations of that contract, and there is no limit to their liability.

Question 3

Under the RUPA, a partner in a term partnership who wrongfully dissociates before the end of a definite term cannot receive payment of a portion of the buyout price before the expiration of the term.

Accepted Answer

The answer of Under the RUPA, a partner in a...

Question 4

The withdrawal of a partner in a partnership at will may be either a rightful or wrongful dissociation.

Accepted Answer

The answer of The withdrawal of a partner in a...

Question 5

The liability of partners for a tort or breach of trust committed by any partner is unlimited, personal liability.

Accepted Answer

According to the principle of joint and several liability, all partners in a partnership are jointly and severally liable for any tort or breach of trust committed by any partner in the course of partnership business. This means that each partner can be held personally liable for the entire amount of damages resulting from the wrongful act, even if they did not directly participate in it. Therefore, the liability of partners for a tort or breach of trust committed by any partner is unlimited, personal liability.

Question 6

Under the UPA, upon termination of a firm, each partner is entitled to the return of his capital after partnership creditors have been paid.

Accepted Answer

This statement is true according to the provisions of the Uniform Partnership Act (UPA). After partnership creditors have been paid, each partner is entitled to the return of his or her capital contribution. Any remaining assets are then distributed among the partners in accordance with their partnership agreement or state law.

Question 7

Jane, Keegan, and Lois are partners in a state that has adopted the RUPA.Jane intends to retire and withdraw from the partnership at the end of the year.Jane is liable to the firm's creditors:
A) only for all debts incurred prior to her retirement.
B) for an amount not to exceed her partnership interest on the day of her retirement.
C) for an amount not to exceed her initial capital contribution to the partnership.
D) for a partnership obligation incurred within two years after dissociation if the partnership did not dissolve and if at the time of entering into the transaction the other party reasonably believed Jane was then a partner.

Accepted Answer

Under the Revised Uniform Partnership Act (RUPA), a partner who withdraws from a partnership is liable for partnership obligations incurred before their withdrawal and can also be liable for obligations incurred within two years after their dissociation if the partnership has not dissolved and the creditor reasonably believed the dissociated partner was still a partner at the time of the transaction.

Question 8

Dissociation refers to those situations in which the RUPA requires a partnership to wind up and terminate.

Accepted Answer

Dissociation refers to a partner leaving the partnership, which does not necessarily require the partnership to wind up and terminate; the partnership can continue with the remaining partners.

Question 9

Under the UPA, submission of a partnership claim to arbitration requires the consent of all the partners.

Accepted Answer

According to Section 10 of the Uniform Partnership Act (UPA), in the absence of an agreement between the partners, a partnership claim can be submitted to arbitration only with the unanimous consent of all the partners.

Question 10

Under the UPA, which of the following liabilities of a partnership has the highest priority for payment out of partnership assets? Amounts owing to:
A) partners for profits.
B) partners for loans or advances.
C) partners for capital.
D) creditors other than partners.

Accepted Answer

Under the Uniform Partnership Act (UPA), the liabilities of a partnership are prioritized for payment out of partnership assets in a specific order. The highest priority is given to creditors other than partners, meaning that debts owed to external creditors must be settled before any distributions are made to partners for profits, loans, advances, or capital contributions.

Question 11

Under the RUPA, it is possible to cure an illegality within 90 days after notice to the partnership of the event dissolving the partnership for illegality.

Accepted Answer

Under Section 801 of the RUPA, a partnership that becomes illegal can be cured if the illegality is removed within 90 days after notice to the partnership of the event dissolving the partnership for illegality.

Question 12

A partner is criminally liable for the crimes of her partners.

Accepted Answer

A partner is not automatically criminally liable for the crimes of her partners unless it can be proven that they were involved or complicit in the commission of the crime.

Question 13

A retiring partner has no way of being discharged from her existing liabilities other than by paying them off.

Accepted Answer

A retiring partner can be discharged from existing liabilities by an agreement among the retiring partner, the remaining partners, and the creditors.

Question 14

Under the UPA, neither a partner who causes dissolution by wrongfully withdrawing nor a partner expelled pursuant to the partnership agreement can force liquidation of the partnership.

Accepted Answer

According to the UPA, a partner who wrongfully withdraws or is expelled cannot force the liquidation of the partnership. Instead, they are entitled to receive their share of the partnership assets upon dissolution.

Question 15

Under the RUPA, in a term partnership, if within 90 days after any specified cause of dissolution occurs, fewer than half of the remaining partners express their will to wind up the partnership business, the partnership will not dissolve.

Accepted Answer

According to Section 801(b) of the Revised Uniform Partnership Act (RUPA), if fewer than half of the remaining partners express their will to wind up the partnership business within 90 days after any specified cause of dissolution occurs in a term partnership, the partnership will not dissolve.

Question 16

Under the RUPA, a partner's dissociation in a term partnership is wrongful if before expiration of the term:
A) the partner dies.
B) the partner becomes a debtor in bankruptcy.
C) a court determines the partner became incapable of performing her duties under the partnership agreement.
D) the partner voluntarily withdraws one month after another partner dies.

Accepted Answer

The answer of Under the RUPA, a partner's dissociation in...

Question 17

A person who represents himself to third persons as being a partner when in fact he is not, may have the liability of a partner.

Accepted Answer

This is known as "holding out" and can create what is called "ostensible authority," where third parties reasonably believe that the individual is a partner and rely on their representations, resulting in the individual being held liable as if they were a partner.

Question 18

A person has notice of a fact if the person has reason to know it exists from all of the facts known to the person at the time in question.

Accepted Answer

This is the legal definition of the term "notice of a fact."

Question 19

In a partnership of A, B , and C, A commits fraud which creates a liability to the partnership of $9,000.If the three partners share profits and losses equally, A 's liability to the partnership for his fraudulent act is $3,000.

Accepted Answer

In a partnership, each partner is jointly and severally liable for the actions of the other partners if those actions are within the scope of the partnership's business. This means that A would be liable for the full $9,000 to the outside party due to his fraudulent act, not just his share of the loss. However, internally, the partnership agreement might require A to compensate B and C for their portions of the loss, but to the external party affected by the fraud, A is liable for the entire amount.

Question 20

Winding up involves all but which one of the following?
A) Paying creditors.
B) Collecting debts owed to the partnership.
C) Taking orders for business.
D) Selling assets for cash.

Accepted Answer

Winding up a business involves concluding its affairs by paying off creditors, collecting debts owed to the business, and selling off assets for cash. Taking orders for new business is not part of the winding-up process, as the purpose is to close down the business, not continue its operations.

Quiz 31: Operation and Dissolution of General Partnerships