Question 1

Which of the following is true about partnership rules for mining partnerships?

Accepted Answer

Mining partnerships are difficult to dissolve,because of the free transferability of mining partnership interests.The death of a mining partner does not affect a dissolution.In addition,a mining partner may sell his interest to another person.

Question 2

To avoid winding up:

Accepted Answer

To avoid winding up after dissolution has occurred,under the RUPA all the partners who have not wrongfully dissociated must consent to continuing the business.That means that any partner who has not wrongfully dissociated may force winding up if dissolution has occurred.

Question 3

Which of the following is an implied authority of a partner winding up the business of an accounting partnership?

Accepted Answer

The implied authority of a winding-up partner is the power to do those acts appropriate for winding up the partnership business.He may collect money due,sue to enforce partnership rights,prepare assets for sale,sell partnership assets,pay partnership creditors,and do whatever else is appropriate to wind up the business.

Question 4

Which of the following is true about a wrongfully dissociated partner?

Accepted Answer

A wrongfully dissociated partner is entitled to his share of the value of his partnership interest,minus the damages he caused the partnership.Damages may include the cost of obtaining new financing and the harm to the partnership goodwill caused by the loss of a valuable partner.

Question 5

Which of the following is true about dissociation?

Accepted Answer

A partner has the power to dissociate from the partnership at any time,such as by withdrawing from the partnership.A partner does not,however,always have the right to dissociate.

Question 6

Which of the following is an apparent authority during winding up?

Accepted Answer

Winding-up partners have apparent authority to conduct business as they did before dissolution,when notice of dissolution is not given to those persons who knew of the partnership prior to its dissolution.

Question 7

Which of the following is true about eliminating partners' apparent authority?

Accepted Answer

As for parties that may know about the partnership but with whom the partnership has not done business,the partnership should post notice of the dissolution at its place of business and in newspapers of general circulation in its area,increasing the chance that third parties will know of the dissolution.

Question 8

Which of the following causes a dissociation of a partnership?

Accepted Answer

A nonwrongful dissociation occurs when a partner withdraws at any time from a partnership at will.A partnership at will is a partnership whose partnership agreement does not specify any term or undertaking to be accomplished.

Question 9

Which of the following is a wrongful dissociation?

Accepted Answer

The grounds for judicial dissociation are when a partner's wrongful conduct adversely and materially affects the partnership business;a partner willfully and persistently breaches the partnership agreement or her fiduciary duties;or a partner's conduct makes it not reasonably practicable to conduct partnership business with the partner.Such expulsion of a partner by a court at the request of the partnership or another partner is wrongful dissociation.

Question 10

What is the term for the orderly sale of the assets of the partnership as part of dissociation?

Accepted Answer

Winding up is the orderly liquidation-or sale-of the assets of the business.

Question 11

Which of the following causes dissociation?

Accepted Answer

A partner's transfer of his transferable partnership interest,by itself,does not cause a dissociation from the partnership,and neither does a creditor's obtaining a charging order.Also,the addition of a partner to a partnership is not a dissociation,because no one ceases to be associated in the business.However,a partner's wrongful conduct that adversely and materially affects the partnership business results in a wrongful dissociation.

Question 12

Anthony,a partner of a partnership firm,was convicted for rash driving.Following this,all other partners dissociated him from the partnership,as per the terms of the agreement.This is an example of a ________ dissociation.

Accepted Answer

An example of nonwrongful dissociation is expulsion of a partner in accordance with the partnership agreement.For example,the removal of a partner who has been convicted of a crime causes a dissociation from the partnership if the partnership agreement allows removal on such grounds.

Question 13

Which of the following is a nonwrongful dissociation?

Accepted Answer

A dissociation may be caused by a partner's retirement,death,expulsion,or bankruptcy filing,among other things.The death of a partner before the expiration of the term of a partnership is a nonwrongful dissociation.

Question 14

Hagus was a partner at Ace-Star General partnership.The partnership agreement stated that all partners would continue as partners until the year 2010.However,in 2006,Hagus was offered another business opportunity that was more attractive than remaining a partner with Ace-Star.Following this,he dissociated himself from Ace-Star.Which of the following is true with regard to this situation?

Accepted Answer

A partner has the power to dissociate from the partnership at any time,such as by withdrawing from the partnership.A partner does not,however,always have the right to dissociate.

Question 15

Which of the following causes dissolution and winding up?

Accepted Answer

Completing the undertaking for which a partnership was created leads to dissolution and winding up of the partnership.

Question 16

Mr.Smith and Mr.Blue enter into a partnership at will in which each owns half of the business.Mr.Blue decides to leave the partnership.What should Mr.Blue be paid for leaving the business?

Accepted Answer

A party who nonwrongfully dissociates from the partnership is entitled to be paid the value of their partnership interest.

Question 17

Which of the following is true about the effect of partnership agreement?

Accepted Answer

The dissociations listed in the RUPA are merely default rules.The partners may limit or expand the definition of dissociation and those dissociations that are wrongful,and they may change the effects of nonwrongful and wrongful dissociations.The partners may require dissociation if a partner transfers his transferable partnership interest.

Question 18

What is the term for a dissociation that violates the partnership agreement?

Accepted Answer

Wrongful dissociation is when a partner violates the partnership while dissociating from the partnership.

Question 19

Which of the following is true about dissolution and winding up the partnership?

Accepted Answer

During winding up,the partners continue as fiduciaries to each other,especially in negotiating sales or making distributions of partnership assets to members of the partnership.

Question 20

Which of the following is a consequence of wrongful dissociation?

Accepted Answer

A wrongfully dissociated partner is entitled to his share of the value of his partnership interest,minus the damages he caused the partnership.But he is not entitled to receive the buyout price until the term of the partnership has expired.

Quiz 39: Partners Dissociation and Partnerships Dissolution and Winding up