Question 1

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

Partnership law does not provide limited liability to general partners, meaning they are personally liable for the acts of the partnership and the other partners. Limited liability can only be obtained through a limited partnership or a limited liability partnership.

Question 2

Partnership is limited to a direct association between human beings.

Accepted Answer

Partnership can exist between human beings as well as between businesses, organizations, and other entities.

Question 3

The theory that a business firm is a collection of individual owners who bind themselves together to share profits is known as _____

Accepted Answer

The theory that a business firm is a collection of individual owners who bind themselves together to share profits is known as the aggregate theory. The entity theory suggests that a business entity is a separate legal entity from its owners, while the conduit theory argues that businesses serve as conduits for shareholders to receive profits. The concession theory and appropriation theory are not relevant theories in this context.

Question 4

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

Accepted Answer

Partnership can be formed through various ways such as implied partnership, partnership by estoppel, or even informal agreements. It is important to be aware of the legal implications of any business relationship to avoid unintended partnerships.

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 separate from its members. This concept is still recognized in modern partnership law.

Question 6

A corporation can never be a partner in a partnership.

Accepted Answer

A corporation can be a partner in a partnership, but it would have to be a separate legal entity created specifically for that purpose, such as a limited liability company (LLC) owned by the corporation.

Question 7

The _____, completed in 1914 and the _____, completed in the 1916 were the basis of partnership law in United States for many decades.

Accepted Answer

The answer of The _____, completed in 1914 and the...

Question 8

Under the common-law theory, a partnership was:

Accepted Answer

Under the common-law theory, a partnership is not considered a legal entity separate from its individual partners. Rather, it is a common name for an aggregate of individuals who have come together to carry on a business for profit. The partnership itself does not have separate legal rights or the ability to own property or sue and be sued in its own name.

Question 9

The Uniform Partnership Act UPA) and the Uniform Limited Partnership Act RUPA) were adopted by all the states of the U.S., except Pennsylvania.

Accepted Answer

The Uniform Partnership Act (UPA) and the Uniform Limited Partnership Act (ULPA) were adopted by all the states of the U.S. except for Louisiana, which adopted a version of ULPA, and Pennsylvania, which has adopted a modified version of UPA.

Question 10

The concept of a business firm as a legal person, with existence and accountability separate from its owners stems from _____.

Accepted Answer

The concept of a business firm as a legal person, with existence and accountability separate from its owners, comes from the entity theory. This theory holds that a business is a distinct entity from its owners, with its own rights and responsibilities.

Question 11

Unlike corporations, partnerships can be created accidentally.

Accepted Answer

Partnerships can be formed unintentionally when two or more individuals enter into a business agreement without formalizing their partnership status.

Question 12

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

Accepted Answer

In most states, partnerships are required to register their assumed or fictitious name in order to comply with state law. Failure to do so can result in legal penalties and violations.

Question 13

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

Fictitious name statutes, also commonly known as "doing business as" (DBA) laws, do require the registration of a name under which a person, sole proprietorship, partnership, or corporation conducts business that is not the legal name of the entity or individual. This registration process is typically done at the county or state level and serves to inform the public of who is behind the business in question.

Question 14

A _____ is the association of two or more people carrying on a business as co-owners for profit.

Accepted Answer

A partnership is the association of two or more people carrying on a business as co-owners for profit. A limited liability company, trust, proprietorship, and agency relationship are all different types of business structures that do not involve co-ownership by definition.

Question 15

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 answer of Unlike the Revised Uniform Partnership Act RUPA),...

Question 16

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

Accepted Answer

Partnerships "at will" are not required to be in writing or satisfy the requirements of the Statute of Frauds.

Question 17

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

Accepted Answer

While many states have adopted RUPA or a variation of it, not all states have adopted it. Some states still use the original Uniform Partnership Act (UPA) or their own state-specific partnership laws.

Question 18

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 19

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 Uniform Partnership Act states that joint ownership by itself does not establish a partnership, even if the co-owners share profits. Additional factors, such as sharing in management and control, must be present to establish a partnership.

Question 20

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

Accepted Answer

The answer of A partnership may or may not have...

Quiz 22: Partnerships: General Characteristics and Formation