Question 1

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

Under the Revised Uniform Partnership Act (RUPA), a term partnership does not automatically dissolve if fewer than half of the remaining partners choose to wind up the business within 90 days after a dissolution event.

Question 2

Winding up involves all but which one of the following?

Accepted Answer

Winding up a business involves selling assets, collecting debts, and paying creditors, but not taking new orders for the business.

Question 3

Jane, Kelly, and Lois are partners in an accounting firm 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:

Accepted Answer

Under the Revised Uniform Partnership Act (RUPA), a dissociated partner can be liable for obligations incurred within two years after dissociation if the other party reasonably believed the dissociated partner was still a partner and did not have notice of the dissociation.

Question 4

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

Accepted Answer

In a partnership, each partner is personally liable for the debts and obligations of the partnership, including torts or breaches of trust committed by any partner, making their liability unlimited.

Question 5

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

In legal terms, notice can be actual or constructive. Constructive notice occurs when a person should have known a fact because it was discoverable through reasonable diligence, given the facts available to them at the time.

Question 6

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, if one partner commits fraud, that partner is typically responsible for the entire liability resulting from their fraudulent act, not just their share of the profits and losses.

Question 7

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 the Revised Uniform Partnership Act (RUPA), a partnership can cure an illegality within 90 days after receiving notice of the event that caused the dissolution due to illegality, allowing the partnership to continue.

Question 8

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 9

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

Accepted Answer

A partner in a partnership has the right to dissociate from the partnership at any time by expressing their intent to withdraw, as per the Uniform Partnership Act.

Question 10

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 she was involved in or had knowledge of the criminal activity. Criminal liability is generally individual and based on personal involvement or complicity.

Question 11

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

In many jurisdictions, if a person represents themselves as a partner, they may be held liable as a partner under the doctrine of "partnership by estoppel" to protect third parties who rely on that representation.

Question 12

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 13

Under the RUPA, a partner's dissociation in a term partnership is wrongful if before expiration of the term:

Accepted Answer

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

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

Under the Uniform Partnership Act (UPA), a partner who wrongfully withdraws or is expelled according to the partnership agreement does not have the right to force the liquidation of the partnership.

Question 15

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

Accepted Answer

Under the Uniform Partnership Act (UPA), all partners must consent to arbitration as it involves waiving the right to a court trial, which affects all partners' interests.

Question 16

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 personally liable for the debts and obligations of the partnership, meaning their personal assets can be used to satisfy partnership liabilities.

Question 17

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 if the remaining partners or a new partner agree to assume those liabilities, or if creditors agree to release the retiring partner from those obligations.

Question 18

Under the UPA, which of the following liabilities of a partnership has the highest priority for payment out of partnership assets? Amounts owing to:

Accepted Answer

Under the Uniform Partnership Act (UPA), creditors other than partners have the highest priority for payment out of partnership assets before any amounts are distributed to partners for profits, loans, advances, or capital.

Question 19

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 a partnership, which may or may not require the partnership to wind up and terminate, depending on the circumstances and the terms of the partnership agreement.

Question 20

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

Under the Uniform Partnership Act (UPA), after a partnership is dissolved and its debts are settled, the remaining assets are distributed to partners, first to return their capital contributions before any profits are divided.

Quiz 31: Operation and Dissolution of General Partnerships