Question 1

Austin withdraws from a partnership and the remaining three partners decide to continue in business.Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

Accepted Answer

The answer of Austin withdraws from a partnership and the...

Question 2

Define dissolution under the UPA and discuss its three causes.

Accepted Answer

The answer of Define dissolution under the UPA and discuss...

Question 3

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 partnership agreement, Shannon has unlimited personal liability for all partnership obligations that occur after she became a partner. However, she only has liability to the extent of her capital contribution for obligations that existed at the time she became a partner. Therefore, choice D is the correct answer.

Question 4

David, a partner in the Speedy 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)Speedy Delivery Partnership.
D)Any partner.
E)Both (c) and (d).

Accepted Answer

Marlene can collect from both the Speedy Delivery Partnership and any individual partner because they have joint and several liability for the negligence of their partner, David. This means that Marlene can choose to collect the full amount of damages from either the partnership as a whole or from any individual partner, depending on who has the ability to pay.

Question 5

Bernice is withdrawing from a partnership.How can she protect herself against liability on contracts the firm enters after her withdrawal?

Accepted Answer

The answer of Bernice is withdrawing from a partnership.How can...

Question 6

Carolee, Joanna, and Ellen form Capital City Partnership.Carolee contributes expertise; Joanna, $15,000; and Ellen, $20,000.After a year, Joanna adds $12,000 as a loan.Ten years later, Capital owes $44,000 to creditors, total assets are $112,000, and the partners decide to dissolve the business.How will the assets be distributed, and what will each partner receive?

Accepted Answer

The answer of Carolee, Joanna, and Ellen form Capital City...

Quiz 32: Operation and Dissolution of General Partnerships

Austin withdraws from a partnership and the remaining three partners decide to continue in business.Discuss the effect of the withdrawal on the partnership and on creditors rights under the UPA.

Define dissolution under the UPA and discuss its three causes.

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?

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

Bernice is withdrawing from a partnership.How can she protect herself against liability on contracts the firm enters after her withdrawal?