Question 1

Which of the following is true about the effect of LLP statutes after appointment of a new partner?

Accepted Answer

If a new partner enters an LLP,the RUPA provides that the partner has no liability for the obligations of the LLP beyond his capital contribution,whether incurred before or after his admission.

Question 2

Bob was a partner in F & B Co., a partnership. Bob dissociated himself from it on June 1, 2000. On December 1, 2000, F & B Co. entered into a contract with Carey. Under which of the following scenarios may Bob be held liable to Carey, even though he is no longer a partner?

Accepted Answer

Bob may still be held liable to Carey if the contract was entered into on the partnership's premises and Bob's name is still listed as a partner on the office door. This is because it gives the appearance that Bob is still a partner of the firm, and Carey may reasonably rely on this appearance when entering into a contract with the company. Filing a Statement of Dissociation with the secretary of state or the court may help to limit Bob's liability, but it depends on the specific requirements under state law. Telling Carey on November 1, 2000 that he was no longer a partner does not necessarily affect Bob's liability, as Carey may still reasonably rely on the appearance created by the partnership's listing of Bob as a partner.

Question 3

In an LLP that is continuing business after dissociation:

Accepted Answer

A dissociated partner may still be held liable for torts that occurred before or after their departure, but they have less risk compared to contractual obligations which may arise after their dissociation.

Question 4

Which of the following is true about the liability of a dissociated partner for obligations incurred while a partner?

Accepted Answer

To completely release a dissociated partner from liability, the requirements for novation must be met and the dissociated partner must also secure their release from the partnership's creditors. Novation is the substitution of one party for another in a contract or obligation.

Question 5

Discuss the rules of dissociation and dissolution for mining partnerships.

Accepted Answer

The answer of Discuss the rules of dissociation and dissolution...

Question 6

Which of the following is true about buyout of nonwrongfully dissociated partners?

Accepted Answer

When the dissociated partner has not wrongfully dissociated and there is no partnership agreement on the issue,the RUPA requires the partnership to pay the dissociated partner in cash within 120 days after he has demanded payment in writing.

Question 7

Discuss a partner's authority to borrow money during winding up.

Accepted Answer

The answer of Discuss a partner's authority to borrow money...

Question 8

Poxabogue Associates, a partnership, is dissociated by the retirement of a partner. The business is continued by the remaining partners and a new partner, Enrica. What is Enrica's liability to creditors for partnership obligations that arose before she became a partner?

Accepted Answer

The RUPA states that a new partner has no liability for partnership obligations incurred before he became a partner.

Question 9

Termination of a partnership occurs automatically after:

Accepted Answer

After the assets of a partnership have been distributed,termination of the partnership occurs automatically.

Question 10

As per RUPA, if a nonwrongfully dissociated partner demands payment from the partnership, he should be paid:

Accepted Answer

When the dissociated partner has not wrongfully dissociated and there is no partnership agreement on the issue,the RUPA requires the partnership to pay the dissociated partner in cash within 120 days after he has demanded payment in writing.The buyout amount must include interest from the date of dissociation.

Question 11

Carlita retires from Mortex Associates, a partnership. The business is continued by the remaining partners. What is Carlita's liability on debts incurred while she was a partner?

Accepted Answer

Dissociated partners remain liable to partnership creditors for partnership liabilities incurred while they were partners;however,a dissociated partner's liability may be eliminated by the process of novation.

Question 12

Leonard, Ted, and Julius are partners at Jutle Associates. They signed a two year lease agreement with Property Company for business purposes. Five months into the new agreement, Leonard dissociates from the partnership. Under what circumstances will Leonard no longer be liable on the lease agreement?

Accepted Answer

In order for Leonard to be relieved of liability under the lease agreement, the partnership and Property Company must enter into a novation agreement. This agreement would release Leonard from any further obligations under the lease and would substitute the remaining partners as the new lessees. Simply giving notice or filing a statement of dissociation does not automatically release Leonard from his obligations under the lease.

Question 13

The RUPA makes a dissociated partner liable as a partner to a party that entered into a transaction with the continuing partnership, unless:

Accepted Answer

The RUPA makes a dissociated partner liable as a partner to a party that entered into a transaction with the continuing partnership,unless the transaction was entered into more than two years after the partner has dissociated.

Question 14

Which of the following is true about successor's liability for predecessor's obligations?

Accepted Answer

The original partners remain liable for obligations incurred prior to dissociation unless there is agreement with the creditors to the contrary.

Question 15

Karla retires from Orton Associates, a partnership. The business is continued by the remaining partners and Wes, a new partner who has agreed to assume Karla's liability for partnership obligations. Creditors have not been notified of Karla's retirement. What are Karla's and Wes's liabilities to the creditors?

Accepted Answer

The answer of Karla retires from Orton Associates, a partnership....

Question 16

Abraham, who is a partner in Adona's firm, has been declared a terrorist by the court following investigations of a criminal case. His partners at the firm want to expel him from partnership but they are not ready to give his interest in partnership. Is Abraham entitled to his interest in partnership?

Accepted Answer

The answer of Abraham, who is a partner in Adona's...

Question 17

Xavier, Yellie, and Zelda are partners of Koral Associates. The term of the partnership is 5 years, but Zelda withdraws after 1 year because she no longer wished to continue. Discuss the nature and consequences of Zelda's dissociation.

Accepted Answer

The answer of Xavier, Yellie, and Zelda are partners of...

Question 18

Emmy, Shane, and Rusty are partners of the firm Esha Associates. Rusty nonwrongfully dissociates himself from the partnership. Under these circumstances, Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

Accepted Answer

Dissociated partners remain liable to partnership creditors for partnership liabilities incurred while they were partners;however,a dissociated partner's liability may be eliminated by the process of novation.

Question 19

Ace Software Co. signed a deal with Gill Associates, a partnership, and has extended credit to it. Paul, a partner in Gill associates, retires but his partners continue the business. In order to release Paul from the debt owned to Ace, which of the following must occur?

Accepted Answer

In a partnership, each partner is personally and jointly responsible for the debts and obligations of the partnership. If Paul retires, he would still be liable for the debt owed to Ace unless he is released from his obligation. The continuing partners must release Paul from liability on the debt so that he is no longer responsible for the debt owed to Ace. This would require renegotiating the terms of the credit agreement with Ace and ensuring that Paul's name is removed from the agreement. Option B is incorrect because Paul securing his release from Ace would not release him from liability to Ace. Option C is incorrect because it does not address the issue of releasing Paul from liability. Option D is incorrect because setting off Paul's liability requires the consent of Ace, which may not be feasible.

Question 20

Mark is a partner in Harbin Associates, a partnership. The term of the partnership agreement is one year and includes a clause on buyouts. After the term expires, Mark decides to dissociate while the remaining partners wish to continue. Under the RUPA:

Accepted Answer

Under the RUPA, when a partner dissociates from a partnership at the end of the term, the remaining partners can continue the partnership and must buy out the dissociating partner's interest on demand, unless otherwise agreed upon in the partnership agreement. Therefore, in this case, the remaining partners must buy out Mark's interest if he demands it. The other choices are not applicable as they do not reflect the provisions of the RUPA for dissociation at the end of the partnership term.

Quiz 39: Partners Dissociation and Partnerships Dissolution and Winding up

Which of the following is true about the effect of LLP statutes after appointment of a new partner?

Bob was a partner in F & B Co., a partnership. Bob dissociated himself from it on June 1, 2000. On December 1, 2000, F & B Co. entered into a contract with Carey. Under which of the following scenarios may Bob be held liable to Carey, even though he is no longer a partner?

In an LLP that is continuing business after dissociation:

Which of the following is true about the liability of a dissociated partner for obligations incurred while a partner?

Discuss the rules of dissociation and dissolution for mining partnerships.

Which of the following is true about buyout of nonwrongfully dissociated partners?

Discuss a partner's authority to borrow money during winding up.

Poxabogue Associates, a partnership, is dissociated by the retirement of a partner. The business is continued by the remaining partners and a new partner, Enrica. What is Enrica's liability to creditors for partnership obligations that arose before she became a partner?

Termination of a partnership occurs automatically after:

As per RUPA, if a nonwrongfully dissociated partner demands payment from the partnership, he should be paid:

Carlita retires from Mortex Associates, a partnership. The business is continued by the remaining partners. What is Carlita's liability on debts incurred while she was a partner?

The RUPA makes a dissociated partner liable as a partner to a party that entered into a transaction with the continuing partnership, unless:

Which of the following is true about successor's liability for predecessor's obligations?

Xavier, Yellie, and Zelda are partners of Koral Associates. The term of the partnership is 5 years, but Zelda withdraws after 1 year because she no longer wished to continue. Discuss the nature and consequences of Zelda's dissociation.

Emmy, Shane, and Rusty are partners of the firm Esha Associates. Rusty nonwrongfully dissociates himself from the partnership. Under these circumstances, Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:

Ace Software Co. signed a deal with Gill Associates, a partnership, and has extended credit to it. Paul, a partner in Gill associates, retires but his partners continue the business. In order to release Paul from the debt owned to Ace, which of the following must occur?

Mark is a partner in Harbin Associates, a partnership. The term of the partnership agreement is one year and includes a clause on buyouts. After the term expires, Mark decides to dissociate while the remaining partners wish to continue. Under the RUPA: