Question 1

When a partnership is dissolved based upon the withdrawal of a partner,that partner no longer has actual authority to bind the partnership.

Accepted Answer

A partner who intends to dissolve or withdraw from the partnership must give the other partners notice of this intent. Once the partnership is dissolved, the partner no longer has actual authority to bind the partnership.

Question 2

Which of the following terms is used when a partner dissolves a partnership in violation of the partnership agreement?

Accepted Answer

A partner who dissolves the partnership in violation of the partnership agreement can be held liable for wrongful dissolution.

Question 3

During the winding-up process,the partners must still fulfill their fiduciary duty to one another in the sense that they must disclose all information about the partnership assets.

Accepted Answer

During the winding-up process, the partners must still fulfill their fiduciary duty to one another and disclose all information about the partnership assets.

Question 4

Which of the following is defined as the change in the relation of the partners caused by any partner's ceasing to be associated with the carrying on,as distinguished from the winding up,of the business?

Accepted Answer

Section 29 of UPA defines dissolution as "the change in the relation of the partners caused by any partner's ceasing to be associated with the carrying on, as distinguished from the winding up"-the activity of completing unfinished partnership business, collecting and paying debts, collecting partnership assets, and taking inventory-"of the business."

Question 5

A general partner has unlimited personal liability for the debts of the limited partnership.

Accepted Answer

In a limited partnership the general partner has unlimited personal liability for the debts of the partnership.

Question 6

Which of the following is true regarding rights of partners in regard to a rightful dissolution of a partnership?

Accepted Answer

If a partnership is rightfully dissolved, all partners can demand that it be wound up and can participate in that process. Moreover, if the partners unanimously agree, they can continue the business using the partnership's name.

Question 7

When is dissolution of a partnership considered complete?

Accepted Answer

Dissolution is complete when any partner stops fulfilling the role of a partner to the business (by choice or default).

Question 8

If a partner dissolves a partnership in violation of the partnership agreement,the partner can be held liable for wrongful dissolution.

Accepted Answer

A partner who dissolves the partnership in violation of the partnership agreement can be held liable for wrongful dissolution.

Question 9

Which of the following stages must be experienced before the termination of a partnership may be considered complete?

Accepted Answer

Before any partnership can be considered completely terminated, it must go through the dissolution stage and the winding-up stage.

Question 10

In the case of a limited partnership,if the partners do not correctly fill or do not file the certificate of limited partnership with the secretary of state,the limited partners will not receive limited liability.

Accepted Answer

The general and limited partners must sign a certificate of limited partnership and file it with the secretary of state to receive limited liability.

Question 11

Remaining partners have a right to continue a partnership after dissolution.

Accepted Answer

After a partnership has been dissolved, the remaining partners have several options, one of which is to continue the partnership.

Question 12

Which of the following is true if a partner wrongfully dissolves a partnership?

Accepted Answer

A partner who dissolves the partnership in violation of the partnership agreement can be held liable for wrongful dissolution. That partner cannot require that the business be wound up but can be held liable for damages to the remaining partners. They can choose to continue the business under the partnership name or wind it up.

Question 13

Which of the following is a type of partnership,if any,that does not specify the objective or duration of the partnership?

Accepted Answer

A partnership at will is an agreement that does not specify the objective or duration of the partnership.

Question 14

Before a partnership may be terminated,the partnership must experience the winding-up stage,but not the dissolution stage.

Accepted Answer

Before any partnership can be considered completely terminated, it must go through the dissolution stage and the winding-up stage.

Question 15

Only officers in a limited partnership have a say in the management of the company.

Accepted Answer

The general partner has management responsibility for the partnership.

Question 16

Which of the following may cause the dissolution of a partnership?

Accepted Answer

The dissolution may occur by an act of the partners, an operation of the law, or an act of the court.

Question 17

Which of the following was the ruling of the court on appeal in the case of In re Leah Beth Woskob,debtor; Alex Woskob; Helen Woskob; the Estate of Victor Woskob v.Leah Beth Woskob,the case in the text involving a dispute regarding whether a partnership was dissolved prior to the death of one of the partners making the attempt of the other partner to buy out the deceased partner's interest untimely?

Accepted Answer

The appeals court found that the partnership had not dissolved prior to the death of one of the partner's and that the attempt to buy out the deceased's interest in the partnership was, therefore, timely.

Question 18

When is the winding-up stage in the termination of a partnership complete?

Accepted Answer

Partners complete the winding-up stage by taking account of the assets of the partner who has left and redistributing them among the other partners.

Question 19

During the winding-up process,the partners may not engage in a business that competes with the partnership business.

Accepted Answer

During winding up partners can engage in business that competes with the partnership business.

Question 20

A partner being expelled from the partnership in accordance with the partnership agreement is not a reason for rightful dissolution of the partnership.

Accepted Answer

A reason for the rightful dissolution of a partnership occurs when a partner is expelled from the partnership in accordance with the partnership agreement.

Quiz 37: Partnerships: Termination and Limited Partnerships