Question 1

If partners have no partnership, their relations are governed by the UPA or its derivatives.

Accepted Answer

If partners have no formal partnership agreement in place, their relationship is governed by the default rules set out in the Uniform Partnership Act (UPA) or its state-specific derivatives.

Question 2

According to the Uniform Partnership Act, the various forms of joint ownership by themselves do not establish partnership, whether or not the co-owners share profits made by the use of the property.

Accepted Answer

The statement is true according to the Uniform Partnership Act. Joint ownership alone does not establish a partnership, even if the co-owners share profits from the property. Additional factors must be present to create a partnership, such as an agreement to share losses as well as profits or pooling resources to carry on a business for profit.

Question 3

Unlike the Revised Uniform Partnership Act (RUPA), the Uniform Partnership Act (UPA) does not permit partnerships to form among anyone apart from natural persons.

Accepted Answer

The Uniform Partnership Act (UPA) does allow partnerships to form among entities other than natural persons, such as corporations or other partnerships.

Question 4

The existence of an at-will partnership would need to be evidenced by some writing in order to avoid invalidation under the statute of frauds.

Accepted Answer

The statement is false. At-will partnerships do not require a written agreement and can be formed by implication or verbal agreement. However, having a written agreement can help avoid disputes and provide clarity on the terms of the partnership.

Question 5

The mercantile theory of the law merchant held that the partnership is a legal entity that can have rights and duties independent of those of its members.

Accepted Answer

The mercantile theory of the law merchant did indeed hold that the partnership is a legal entity that can have rights and duties independent of those of its members. This view was influential in the development of modern partnership law, particularly in countries that adopted the civil law tradition.

Question 6

The fictitious names statutes in most states of US require that anyone doing business under a name other than his real name register the name.

Accepted Answer

This statement is true. The purpose of fictitious name registration is to provide transparency to consumers and prevent fraud by ensuring that businesses operating under a name other than the owner's real name are properly registered and identifiable.

Question 7

All states have adopted the Revised UPA.

Accepted Answer

Not all states have adopted the Revised UPA (Uniform Partnership Act). Some states have adopted their own versions of partnership laws or have not updated their laws since the original UPA.

Question 8

If a person receives a share of the profits of a business, it is assumed she is a partner.

Accepted Answer

A person who receives a share of the profits of a business is considered a partner because they have a financial stake in the business and share in its profits.

Question 9

No agreement is necessary to form a partnership.

Accepted Answer

According to the law, no formal agreement is necessary to form a partnership. A partnership can be formed through an oral or written agreement, or even by implication through the conduct of the partners. However, it is always recommended to have a written agreement to avoid misunderstandings or legal disputes in the future.

Question 10

The Uniform Partnership Act (UPA) and the Uniform Limited Partnership Act (RUPA) codification and rationalization of the common-law and equitable rules that governed partnerships in the 19th century.

Accepted Answer

The answer of The Uniform Partnership Act (UPA) and the...

Question 11

Partnerships are not taxable entities and so they do not pay income taxes.

Accepted Answer

Partnerships are pass-through entities, which means that the profits and losses flow through to the partners' individual tax returns and they pay taxes on their share of the income. The partnership itself does not pay income taxes.

Question 12

It is possible to become someone's partner without intending to or even realizing that partnership has been created.

Accepted Answer

It is possible for a partnership to be created unintentionally, such as through actions or behaviors that suggest a mutual intention to work together towards a common goal. This can occur even if the individuals involved did not explicitly discuss or plan to form a partnership.

Question 13

The UPA allows partnerships to own property.

Accepted Answer

Yes, the Uniform Partnership Act (UPA) allows partnerships to own property.

Question 14

A corporation can never be a partner in a partnership.

Accepted Answer

Corporations can be partners in a partnership, as they are considered legal entities capable of entering into contracts and business arrangements, including partnerships.

Question 15

Corporations cannot be partners in partnerships.

Accepted Answer

Corporations can be partners in partnerships, but they are referred to as "limited partners" and have limited liability.

Question 16

Partnership law permits an investor to put capital into a general partnership and realize tax benefits without liability for the acts of the other partners.

Accepted Answer

While an investor in a general partnership may realize tax benefits, they also have unlimited personal liability for the acts and debts of the other partners.

Question 17

Non-registration of the partnership name will violate the assumed or fictitious name statutes of most states.

Accepted Answer

Most states require partnerships to register their assumed or fictitious names to prevent deceptive business practices and to ensure proper identification of the entity. Failing to register the partnership name can result in legal consequences.

Question 18

A partnership may or may not have a partnership agreement as long as the tests of partnership are met.

Accepted Answer

A partnership can exist without a formal agreement as long as the essential elements of a partnership, such as sharing of profits and losses, mutual agency, and co-ownership of the business, are present.

Question 19

Partnerships "at will" are not covered by the Statute of Frauds.

Accepted Answer

Partnerships "at will" refer to informal partnerships that have no fixed duration or terms, and are therefore not required to be in writing under the Statute of Frauds.

Question 20

All the states of the U.S. have now adopted the Revised Uniform Partnership Act (RUPA) as promulgated in 1997.

Accepted Answer

As of 2021, there are still a handful of states that have not fully adopted the Revised Uniform Partnership Act (RUPA) as promulgated in 1997, including Louisiana, Georgia, and Wyoming.

Quiz 40: Partnerships: General Characteristics and Formation