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Peggy, Crystal and Dean Want to Enter into a Partnership

Question 28

Multiple Choice

Peggy, Crystal and Dean want to enter into a partnership, however, Dean cannot contribute an equal amount of capital or manpower to the partnership. Therefore, they want to ensure that Dean will only be able to get a portion of the profits equal to both his capital and manpower contributions. Which of the following statements would be accurate statement?


A) The partners should create a partnership agreement to override the default rule that partners have an equal right to profits.
B) The default rule will always trump a partnership agreement, therefore, they should not enter into a partnership with Dean if they do not want to split the profits with him equally.
C) Each time profits are divided the court will intervene and determine what is a fair and just distribution.
D) Peggy and Crystal should just hide a portion of the profits from Dean.

Correct Answer:

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