Question 1

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 2

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

According to Section 802 of the Revised Uniform Partnership Act (RUPA), if a partnership becomes illegal because of an event that was not agreed upon in the partnership agreement, the partnership will be dissolved automatically. However, the partnership can be cured of the illegality within 90 days after notice to the partnership of the event, and the partnership will continue as if the event had never occurred.

Question 3

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 definition of notice as per legal terms.

Question 4

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 5

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

According to the UPA, Section 38, each partner is entitled to the return of their capital after partnership creditors have been paid upon termination of the firm.

Question 6

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 term...

Question 7

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 from a partnership at any time by expressing the intent to withdraw. This can be done with or without the consent of the other partners.

Question 8

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:
A)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.
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.
E)for an amount not to exceed her initial capital contribution to the partnership.

Accepted Answer

Under the RUPA, a partner who dissociates from the partnership is liable to the firm's creditors 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 the partner was then a partner. Therefore, Jane would still be liable for partnership obligations incurred within two years after her dissociation from the firm if the other party reasonably believed she was still a partner at the time of entering into the transaction.

Question 9

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

Accepted Answer

Taking orders for business is not part of the winding up process; rather, it involves continuing the normal operations of the partnership, which should be ceased during winding up. The other options (selling assets for cash, collecting debts owed to the partnership, paying creditors) are all part of the winding up process.

Question 10

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

Accepted Answer

According to the Partnership Act 1890, all partners are jointly and severally liable for the tortious or breach of trust acts committed by any partner in the course or scope of partnership business, which means they bear unlimited personal liability for such actions.

Question 11

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 UPA, if a partner wrongfully withdraws or is expelled pursuant to the partnership agreement, they are not entitled to force liquidation of the partnership. Instead, the remaining partners may continue the partnership or choose to wind it up and distribute the assets.

Question 12

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

Accepted Answer

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

Question 13

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 has unlimited personal liability for the partnership's obligations and contracts. Therefore, if the partnership is bound by a contract, each individual partner is also bound by it and has unlimited personal liability for it.

Question 14

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 15

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 apparent authority, making the person liable as if they were a partner.

Question 16

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

Accepted Answer

According to Section 69 of the Indian Partnership Act, 1932 (applicable under UPA), any dispute arising among the partners of a firm in the course of the business of the firm can be referred to arbitration only if all the partners agree to do so in writing. Therefore, submission of a partnership claim to arbitration requires the consent of all the partners.

Question 17

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 in, or had knowledge of, the criminal activity and participated in some way.

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:
A)partners for profits.
B)partners for loans or advances.
C)creditors other than partners.
D)partners for capital.

Accepted Answer

Under the Uniform Partnership Act (UPA), liabilities to creditors other than partners have the highest priority for payment out of partnership assets. This means that if the partnership assets are not enough to pay off all liabilities, creditors other than partners must be paid first before any distribution is made to partners for profits, loans or advances, or capital.

Question 19

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 of the Revised Uniform Partnership Act (RUPA), if less 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, the partnership will not dissolve.

Question 20

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 between the retiring partner, the remaining partners, and the creditors.

Quiz 31: Operation and Dissolution of General Partnerships