Question 1

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 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

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 partnership, each partner has unlimited personal liability for the obligations of the partnership if they have the authority to act on behalf of the partnership and the partnership is bound by their actions. This means that personal assets of the partners can be used to satisfy partnership debts and liabilities.

Question 4

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 5

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

In a partnership, unless the partnership agreement specifies otherwise, each partner typically has an equal vote in the management decisions of the partnership, regardless of the proportion of management duties or capital contribution.

Question 6

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

Accepted Answer

A partner who refuses to obey the articles of partnership is acting against the agreed terms, and thus can be held liable for any losses that result from such disobedience, as these actions can directly impact the partnership's operations and financial health.

Question 7

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 8

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

Under partnership law, if one partner pays more than their share of a liability or judgment for which the partnership is liable, the other partners are typically required to indemnify (reimburse) that partner for their excess payment, ensuring that all partners bear their fair share of partnership liabilities.

Question 9

________ is an association of two or more persons to carry on as co-owners of a business for profit.
A) A joint operation
B) A combined partnership
C) A partnership
D) A joint business arrangement
E) A primary partnership

Accepted Answer

A partnership is defined as an association of two or more persons who come together to carry on as co-owners of a business for profit. This is the standard legal definition used in many jurisdictions to describe such a business arrangement.

Question 10

The fiduciary duty includes the duty to be loyal.

Accepted Answer

The fiduciary duty encompasses the duty to act in the best interest of another party, which includes being loyal, avoiding conflicts of interest, and not profiting at the expense of the party to whom the duty is owed.

Question 11

The partnership is not taxed as a legal entity, thus the partners are taxed on the income generated by the partnership.

Accepted Answer

In a partnership, the business itself is not subject to income tax. Instead, the profits and losses are passed through to the partners, who then report this income on their personal tax returns.

Question 12

Which of the following is the main statute governing partnership law?
A) The Partnership Act of America
B) The General Partnership Act
C) Partnerships and Joint-Venture's Act
D) The Uniform Partnership Act
E) The Partnership Governance Act

Accepted Answer

The Uniform Partnership Act is the primary statute that governs partnership law in the United States, providing a uniform set of rules for the formation, operation, and dissolution of partnerships.

Question 13

In a partnership, a minimum of one of the partners must be an agent while the others are considered employees of the partnership.

Accepted Answer

In a partnership, all partners are principals and agents of the partnership, not employees, and they all have the authority to act on behalf of the partnership within the scope of the business.

Question 14

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?
A) The appellate court upheld the lower court's decision that a partnership between the parties existed because the agreement between the parties provided for the sharing of profits and losses.
B) The appellate court upheld the lower court's decision that no partnership existed because, while the parties had an agreement regarding management, no partnership agreement existed.
C) The appellate court upheld the lower court's decision that a partnership existed because the parties were involved in a type of joint venture.
D) The appellate court reversed the lower court's decision that a partnership existed because the plaintiff had never judicially admitted the existence of a partnership.
E) The appellate court reversed the lower court's decision that no partnership existed because by completing a dissociation, the defendant admitted the existence of a partnership.

Accepted Answer

The appellate court upheld the lower court's decision that a partnership existed because the agreement between the parties provided for the sharing of profits and losses.

Question 15

Partnership by estoppel is not recognized by most states.

Accepted Answer

Partnership by estoppel is recognized by most states as a legal principle where a person may be treated as a partner in a business, and held liable for its debts or actions, even if no formal partnership agreement exists, if they have represented themselves or allowed themselves to be represented as a partner.

Question 16

Where no partnership agreement exists, will a court dismiss a suit concerning the existence or terms of the partnership?
A) No, 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) No, under federal law, oral testimony is sufficient to set forth the existence and terms of the partnership.
C) Yes, because of the statute of frauds.
D) Informal documentation is sufficient to set forth the existence of the partnership, but not sufficient to set forth the terms of the partnership.
E) Yes, the written agreement is necessary.

Accepted Answer

Informal documentation, such as e-mails, notes, and memos, can indeed be used to establish the existence of a partnership and its terms, even in the absence of a formal partnership agreement. Courts often look at the conduct of the parties and any available documentation to determine if a partnership exists and what the terms might be.

Question 17

Only the partnership agreement determines the implied authority of partners.

Accepted Answer

The implied authority of partners can also be determined by the law and the nature of the business, in addition to what is specified in the partnership agreement.

Question 18

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

Accepted Answer

Partnerships can be formed between various types of individuals or groups, including businesses, governments, non-profit organizations, or any combination thereof, as long as they agree to cooperate to achieve their mutual interests.

Question 19

Under the Uniform Partnership Act, which of the following is defined as a "person"?
A) Individuals only
B) Partnerships and individuals
C) Partnerships, individuals, and corporations
D) Partnerships, individuals, corporations, and other associations
E) Corporations only

Accepted Answer

Under the Uniform Partnership Act, a "person" is broadly defined to include partnerships, individuals, corporations, and other associations. This inclusive definition allows for a wide range of entities and individuals to engage in partnerships.

Question 20

The law requires that all title to property must be in the name of a partnership.

Accepted Answer

The law does not require all property titles to be in the name of a partnership. Property can be held in the names of the individual partners or in the name of the partnership depending on the agreement among the partners and the legal requirements of the jurisdiction.

Quiz 36: Partnerships: Nature, Formation, and Operation