Question 1

If an entire judgment for a tort for which the partnership is liable is paid by one partner,other partners have no legal obligation to indemnify that partner.

Accepted Answer

According to the Uniform Partnership Act, if one partner pays an entire judgment for a tort for which the partnership is liable, that partner has the right to indemnification from the other partners for their share of the judgment. Therefore, the other partners do have a legal obligation to indemnify the paying partner.

Question 2

Under joint and several liability,partners must be sued jointly.

Accepted Answer

Under joint and several liability, any partner can be sued individually or all partners can be sued together for the full amount of the debt or damages.

Question 3

The fiduciary duty includes the duty to be loyal.

Accepted Answer

The fiduciary duty requires the fiduciary to act in the best interests of the beneficiary and to be loyal to the beneficiary over their own interests.

Question 4

In a partnership,every partner is considered to be an agent.

Accepted Answer

In a partnership, every partner is considered an agent of the firm and has the authority to act on behalf of the firm, bind the firm to contracts, and make business decisions. This means that the actions of one partner can affect the entire partnership.

Question 5

Title to property may not be put in the name of a partnership.

Accepted Answer

In many jurisdictions, a partnership can hold title to property in its name, allowing the partnership to own and manage property as a legal entity.

Question 6

The partnership is taxed as a legal entity,thus the partners are not double taxed.

Accepted Answer

Partnerships are typically not taxed as a separate legal entity, but rather the profits and losses are passed through to the individual partners who are then taxed on their individual tax returns. However, there are certain types of partnerships, such as a limited liability partnership (LLP) or a limited liability company (LLC), which may be taxed as a legal entity. In these cases, the partnership itself would be subject to tax on its profits, and the partners would also be taxed on their individual share of the profits. Therefore, the partners would potentially face double taxation.

Question 7

Where no partnership agreement exists,will a court dismiss a suit concerning the existence or terms of the partnership?

Accepted Answer

A)In situations where there are no articles of partnership,the courts may look at other documentation to determine whether a partnership existed.Informal documentation,such as e-mails,notes,and memos,may be used to identify the existence of a partnership and/or the terms of a partnership.
B)In situations where there are no articles of partnership,the courts may look at other documentation to determine whether a partnership existed.Informal documentation,such as e-mails,notes,and memos,may be used to identify the existence of a partnership and/or the terms of a partnership.

Question 8

________ is an association of two or more persons to carry on as co-owners of a business for profit.

Accepted Answer

A)According to UPA Section 6,a partnership is "an association of two or more
persons to carry on as co-owners of a business for profit."
B)According to UPA Section 6,a partnership is "an association of two or more persons to carry on as co-owners of a business for profit."
C)According to UPA Section 6,a partnership is "an association of two or more persons to carry on as co-owners of a business for profit."
D)According to UPA Section 6,a partnership is "an association of two or more persons to carry on as co-owners of a business for profit."
E)According to UPA Section 6,a partnership is "an association of two or more persons to carry on as co-owners of a business for profit."

Question 9

No partnership is created based upon an employer sharing profits with an employee as payment for work.

Accepted Answer

Sharing profits with an employee as payment for work does not in itself create a partnership. A partnership involves a mutual agreement to share both profits and losses of a business and to work together in the business, not just a profit-sharing arrangement.

Question 10

Partnership by estoppel is not recognized by federal law.

Accepted Answer

Partnership by estoppel is recognized under federal law, particularly in the Uniform Partnership Act, which many states have adopted. It allows a person to be held liable as a partner even if they are not formally part of the partnership, based on their conduct or representations.

Question 11

Almost any individual or group of people can serve as a partner.

Accepted Answer

Almost any individual or group of people can serve as a partner, although it may depend on the specific context and purpose of the partnership.

Question 12

Each partner has unlimited personal liability for all acts of the partnership's partners.

Accepted Answer

The answer of Each partner has unlimited personal liability for...

Question 13

A partner who refuses to obey the articles of partnership may be held liable for any losses that the partnership incurs.

Accepted Answer

When partners enter into a partnership agreement, they agree to follow the articles of partnership. Failure to do so can result in legal consequences, including liability for any losses suffered by the partnership.

Question 14

Partnership by estoppel applies only when there is no partnership agreement in place;when there is a written partnership agreement,partners not named in the agreement can deny they are partners.

Accepted Answer

Partnership by estoppel can apply regardless of whether there is a written partnership agreement. It occurs when a person represents themselves as a partner or allows others to believe they are a partner, leading third parties to rely on that representation.

Question 15

Only the partnership agreement determines the implied authority of partners.

Accepted Answer

While a partnership agreement can outline the authority of partners, there are also certain implied authorities that partners have regardless of what is written in the agreement. For example, partners typically have implied authority to enter into contracts on behalf of the partnership.

Question 16

Which of the following generally establishes the rules for the partnership,if no partnership agreement exists?

Accepted Answer

A)The Uniform Partnership Act UPA)is the main statute governing partnership
law.If there is no express partnership agreement,UPA establishes the rules for the partnership.
B)The Uniform Partnership Act UPA)is the main statute governing partnership law.If there is no express partnership agreement,UPA establishes the rules for the partnership.
C)The Uniform Partnership Act UPA)is the main statute governing partnership law.If there is no express partnership agreement,UPA establishes the rules for the partnership.
D)The Uniform Partnership Act UPA)is the main statute governing partnership law.If there is no express partnership agreement,UPA establishes the rules for the partnership.
E)The Uniform Partnership Act UPA)is the main statute governing partnership law.If there is no express partnership agreement,UPA establishes the rules for the partnership.

Question 17

Unless otherwise stated in the partnership agreement,each partner will have one vote in determining how the partnership is managed,even if one partner has an unusually large proportion of management duties.

Accepted Answer

This is a standard provision in partnership agreements known as "one partner, one vote." It ensures that each partner has an equal say in the management of the partnership, regardless of their contributions or duties.

Question 18

Each partner has unlimited personal liability for the obligation,if a partner has authority to act and the partnership is bound by the act giving rise to the obligation.

Accepted Answer

In a general partnership, each partner has unlimited personal liability for the obligations of the partnership if they have authority to act on behalf of the partnership and the partnership is bound by the act giving rise to the obligation. This means that each partner is personally responsible for the debts and obligations of the partnership, even if those debts exceed the value of their personal assets.

Question 19

What was the result in Leoff v.S&J Land Co. ,the case in the text involving a land dispute and whether a partnership existed?

Accepted Answer

A)The appellate court upheld the district court's conclusion that the parties were partners because the applicable management agreement provided for the sharing of profits and losses.
B)The appellate court upheld the district court's conclusion that the parties were partners because the applicable management agreement provided for the sharing of profits and losses.
C)The appellate court upheld the district court's conclusion that the parties were partners because the applicable management agreement provided for the sharing of profits and losses.
D)The appellate court upheld the district court's conclusion that the parties were partners because the applicable management agreement provided for the sharing of profits and losses.
E)The appellate court upheld the district court's conclusion that the parties were partners because the applicable management agreement provided for the sharing of profits and losses.

Question 20

Under the Uniform Partnership Act,which of the following is defined as a "person"?

Accepted Answer

A)The UPA defines persons as "individuals,partnerships,corporations,and other
associations."
B)The UPA defines persons as "individuals,partnerships,corporations,and other associations."
C)The UPA defines persons as "individuals,partnerships,corporations,and other associations."
D)The UPA defines persons as "individuals,partnerships,corporations,and other associations."
E)The UPA defines persons as "individuals,partnerships,corporations,and other associations."

Quiz 36: Partnerships: Nature, formation, and Operation