Question 1

Limited partners:

Accepted Answer

Limited partners typically cannot use their name in the partnership name, contribute management services, or advise the general partner, as these actions could jeopardize their limited liability status.

Question 2

A, B, and C are partners in a real estate firm. B has just died. B's widow:

Accepted Answer

In a partnership, the death of a partner typically results in the dissolution of the partnership, but the deceased partner's interest in the partnership does not automatically transfer to their heirs. The widow does not own a portion of the partnership land, nor does she become a tenant in partnership or have the right to force a sale of the partnership property.

Question 3

Dissolution:

Accepted Answer

Dissolution can occur due to the death of a partner, which is a common reason for the dissolution of a partnership.

Question 4

Which of the following is not required for the certificate of limited partnership (under RULPA)?

Accepted Answer

None of the above are required.

Question 5

A limited partnership:

Accepted Answer

A limited partnership requires at least one general partner who manages the business and is personally liable for its debts.

Question 6

Transfer of a partner's interest:

Accepted Answer

The answer of Transfer of a partner's interest:
...

Question 7

Evidence of sharing profits is prima facie evidence of partnership existence unless the profits are:

Accepted Answer

Sharing profits as wages or rent does not indicate a partnership, as these are payments for services or use of property, not a share in business ownership.

Question 8

Only the capital (property, cash or services contributed to the partnership)is at risk in a partnership.

Accepted Answer

In a partnership, partners are typically personally liable for the debts and obligations of the business, meaning their personal assets may also be at risk beyond just their capital contributions.

Question 9

The assignment of limited partnership interests:

Accepted Answer

The assignment of limited partnership interests may be considered a sale of securities, which would subject it to federal securities regulations.

Question 10

A partner owes the partnership and other partners the same fiduciary duty that an agent owes to a principal.

Accepted Answer

Partners in a partnership have fiduciary duties similar to those of an agent to a principal, including duties of loyalty and care.

Question 11

For income tax purposes, a partnership:

Accepted Answer

A partnership itself does not pay income taxes; instead, it files an informational return, and the income is passed through to the partners who then pay taxes on their share.

Question 12

A partnership by estoppel:

Accepted Answer

A partnership by estoppel results when third parties are led to believe a partnership exists, even though no actual partnership agreement exists.

Question 13

Unanimous consent of the partners is required for:

Accepted Answer

Confession of a judgment typically requires unanimous consent of all partners because it involves admitting liability and can significantly impact the partnership's financial standing.

Question 14

In Germany, public companies have:

Accepted Answer

In Germany, public companies typically have a two-tier board system consisting of a management board and a supervisory board, which acts similarly to a board of directors. Additionally, they have a shareholder advisory committee known as the "Aufsichtsrat."

Question 15

Limited partners have liability:

Accepted Answer

Limited partners have liability only up to the amount of their contribution to the partnership. They are not liable for the partnership's debts beyond their investment.

Question 16

The corporate veil can be pierced under the alter ego theory when:

Accepted Answer

The alter ego theory allows piercing the corporate veil when there is a lack of separation between personal and corporate assets or debts, indicating that the corporation is merely an extension of the individual.

Question 17

Which of the following is true of a sole proprietorship?

Accepted Answer

The answer of Which of the following is true of...

Question 18

Partnership property:

Accepted Answer

Partnership property is owned by the partners as tenants in partnership, meaning it is owned collectively by the partnership entity rather than individually by the partners.

Question 19

Which of the following is not a method for forming a partnership?

Accepted Answer

A partnership cannot be formed by transfer; it is typically formed by agreement, estoppel, or implication.

Question 20

Partners' personal assets:

Accepted Answer

Partnership creditors can reach partners' personal assets if the partnership assets are exhausted, due to the concept of joint and several liability in partnerships.

Quiz 16: Governance and Structure: the Law of Business Associations