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ICAEW Law 09: Sole traders and partnerships. > 09. Sole traders, ordinary partnerships. > Flashcards

09. Sole traders, ordinary partnerships. Flashcards

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1
Q

In a sole tradership, there is no … between the individual and the business.

A

legal distinction

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2
Q

Partnership is the relation which subsists between two or more persons carrying on … with a view to profit.

A

business in common

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3
Q

… is the relation which subsists between two or more persons carrying on business in common with a view to profit.

A

Partnership

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4
Q

Partnership is the relation which subsists between two or more persons carrying on business in common with a …

A

view to profit

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5
Q

A partnership (does / does not) require a written partnership agreement.

A

does not

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6
Q

A partnership (is / is not) a separate legal entity from its partners.

A

is not

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7
Q

A ‘person’ in a partnership (can / can not) be a company.

A

can

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8
Q

Ordinary, or general partnerships are governed by the … (1890).

A

Partnership Act

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9
Q

Persons who have entered into partnership with one another are called collectively a …

A

firm

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10
Q

A partnership subsisting for the duration of a single transaction is often known as a …

A

Joint Venture

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11
Q

The term ‘carrying on in business’ implies …

A

activity

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12
Q

The receipt by a person of a share of the … is prima facie evidence that he is a partner in the business.

A

profits

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13
Q

The receipt by a person of a share of the profits is prima facie evidence that he is a … in the business.

A

partner

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14
Q

The sharing of gross receipts (does / does not) of itself create a partnership.

A

does not

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15
Q

The sharing of gross receipts does not of itself create a …

A

partnership

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16
Q

The receipt by a person of a payment contingent on the profits of a business (does / does not) make that person a partner.

A

does not

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17
Q

Carrying on business ‘in common’ implies a broadly … relationship between partners.

A

equal

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18
Q

… v Miah (2001): two persons were deemed to be partners in a restaurant business even before it opened, their relationship beginning when they made the decision to do so and started preparations.

A

Khan

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19
Q

Khan v Miah (2001): two persons were deemed to be partners in a … even before it opened, their relationship beginning when they made the decision to do so and started preparations.

A

restaurant business

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20
Q

Khan v Miah (2001): two persons were deemed to be partners in a restaurant business even before it opened, their … beginning when they made the decision to do so and started preparations.

A

relationship

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21
Q

The receipt of payment for a debt contingent on the profits of a partnership (does / does not) make the recipient a partner.

A

does not

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22
Q

The receipt of a bonus or other variable remuneration contingent on the profits of a partnership (does / does not) make the recipient a partner.

A

does not

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23
Q

The advance of money by way of loan to a partnership (does / does not) make the lender a partner provided that the contract is in writing and signed by all parties.

A

does not

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24
Q

The advance of money by way of loan to a partnership does not make the lender a partner provided that the contract is … and signed by all parties.

A

in writing

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25
Q

The advance of money by way of loan to a partnership does not make the lender a partner provided that the contract is in writing and …

A

signed by all parties

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26
Q

The receipt of payment for the sale of goodwill contingent on the profits of a partnership (does / does not) make the recipient a partner.

A

does not

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27
Q

Departure from the Partnership Act (1890) requires … within any partnership agreement.

A

express provision

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28
Q

In the absence of an express provision to the contrary within any partnership agreement, a partnership is governed by the …

A

Partnership Act (1890)

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29
Q

In the absence of of contrary agreement, the profits and losses of a partnership are shared … between partners.

A

equally

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30
Q

Ordinary management decisions within a partnership can be made by … of partners.

A

a majority

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31
Q

Any decision on changing the nature of the partnership’s business must be …

A

unanimous

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32
Q

The firm must indemnify any partner against liabilities incurred in the … of the firm.

A

ordinary course of business

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33
Q

A partner (is / is not) automatically entitled to remuneration for acting in the partnership business [beyond a share of any profits.]

A

is not

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34
Q

A partnership agreement may be varied with the consent of … of the partners.

A

all

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35
Q

Partners are bound to render … and full information of all things affecting the partership to any partner or his legal representatives.

A

true accounts

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36
Q

Partners are bound to render true accounts and … of all things affecting the partership to any partner or his legal representatives.

A

full information

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37
Q

Partners are bound to render true accounts and full information of all things affecting the partership to any partner or his …

A

legal representatives

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38
Q

New partners may only be introduced with the … consent of existing partners.

A

unanimous

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39
Q

The Partnership Act (1890) (does / does not) allow the expulsion of a partner by a majority of other partners in the absence of a partnership agreement.

A

does not

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40
Q

Upon the dissolution of a partnership, the authority of the partners continues so far as is necessary to … the affairs of the partnership.

A

wind up

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41
Q

Upon dissolution, … can insist upon the ‘liquidation’ of partnership assets.

A

any partner

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42
Q

Money which a partner owes but cannot pay back is known as a …

A

capital deficiency

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43
Q

Partners share a capital deficiency in relation to their …

A

original capital contribution

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44
Q

A partner must … for any private profits derived from any transaction concerning the partnership undertaken without the consent of the other partners.

A

account

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45
Q

A partner must account for any private profits derived from any transaction concerning the partnership undertaken without the … of the other partners.

A

consent

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46
Q

If a partner, without the consent of the other partners, competes with the firm, he must … for all profits made.

A

account

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47
Q

If a partner assigns their rights, the assignee is ONLY entitled to their …

A

profit share

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48
Q

If a partner assigns their rights, the assignee (is / is not) entitled to become involved in the management of the firm.

A

is not

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49
Q

An assignee is only entitled to accounts upon the … of a partnership.

A

dissolution

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50
Q

Partners are … liable for the acts of their fellow partners in so far as they bind the firm.

A

jointly and severally

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51
Q

Partners are jointly and severally liable for the acts of their … in so far as they bind the firm.

A

fellow partners

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52
Q

Partners are jointly and severally liable for the acts of their fellow partners in so far as they …

A

bind the firm

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53
Q

Every partner is an agent of the … and his other partners for the purpose of the business of the partnership.

A

firm

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54
Q

Every partner is an agent of the firm and his … for the purpose of the business of the partnership.

A

other partners

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55
Q

Every partner is an agent of the firm and his other partners for the purpose of the …

A

buisness of the partnership

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56
Q

Every partner has the authority to … the firm and his other partners for the purpose of the business of the partnership.

A

bind

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57
Q

A “partner’s” actions DO NOT bind the firm and the other partners if the party with whom they deal either knows they have … or knows that they are not in fact a partner.

A

no authority

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58
Q

A “partner’s” actions DO NOT bind the firm and the other partners if the party with whom they deal either knows they have no authority or knows that they are not in fact a …

A

partner

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59
Q

An act or instrument relating to the business of the firm and done or executed in the firm name by an … is binding on the firm and all the partners.

A

authorised person

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60
Q

An act or instrument relating to the business of the firm and done or executed in the firm name by an authorised person is … on the firm and all the partners.

A

binding

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61
Q

An act or instrument relating to the business of the firm and done or executed in the firm name by an authorised person is binding on the firm and …

A

all the partners

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62
Q

Where one partner pledges the … of the firm for a purpose apparently not connected with the firm’s ordinary course of business, the firm is not bound.

A

credit

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63
Q

Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm’s …, the firm is not bound.

A

ordinary course of business

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64
Q

Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm’s ordinary course of business, the firm is …

A

not bound

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65
Q

If a firm issues a … regarding the restriction of a partner to bind the firm then no act in contravention of this notice is binding.

A

notice

66
Q

In the event of the death of a partner with partnership debts, these are satisfied from their estate (before / after) their separate debts.

A

after

67
Q

In the event of a wrongful act or omission by a partner in the …, the firm is liable to the same extent as the partner.

A

ordinary course of business

68
Q

In the event of a wrongful act or omission by a partner in the ordinary course of business, the … is liable to the same extent as the partner.

A

firm

69
Q

In the event of a wrongful act or omission by a partner in the ordinary course of business, the firm is liable to the … as the partner.

A

same extent

70
Q

In the event of a wrongful act or omission by a partner in the ordinary course of business, the firm is liable to the same extent as the …

A

partner

71
Q

If a partner misapplies … recieved for or in custody of the firm, then the firm is liable to make good the loss.

A

money or property

72
Q

If a partner misapplies money or property recieved for or in custody of the firm, then the firm is liable to …

A

make good the loss

73
Q

Any person ‘…’ themselves to be a partner is as liable as a partner.

A

holding out

74
Q

Notice to a partner is USUALLY equivalent to notice to …

A

the firm

75
Q

A new partner is not liable to the creditors of the firm for anything done … he became a partner.

A

before

76
Q

A retiring partner does not cease to be liable for partnership debts or obligations incurred … his retirement.

A

before

77
Q

A retiring partner may be discharged from any exisiting liabilities by an agremeent between themselves, the new …, and its creditors.

A

firm

78
Q

A retiring partner may be discharged from any exisiting liabilities by an agremeent between themselves, the new firm, and its …

A

creditors

79
Q

Any guarantees given to a firm are deemed to be … when that firm changes.

A

revoked

80
Q

The mutual rights and duties of partners may be varied with the consent of … the partners.

A

all

81
Q

Property, including stock, acquired on behalf of the firm is known as …

A

partnership property

82
Q

‘Partnership property’ is that acquired on behalf of a …

A

firm

83
Q

Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of …

A

the firm

84
Q

A writ of execution shall not issue against any partnership property except on a judgement against the …

A

firm

85
Q

If a County Court Judgement is made against an individual partner, a writ (can / can not) be executed against partnerhsip property.

A

can not

86
Q

If a County Court Judgement is made against the firm, a writ (can / can not) be executed against partnerhsip property.

A

can

87
Q

Unless a partnership agreement determines otherwise, the Partnership Act provides for … interest on additional capital introduced.

A

5%

88
Q

Whether or not a “partner’s” actions bind a firm is dependent upon the perceptions of the …

A

third party

89
Q

A retiring partner must ensure that the firm’s … are aware of their retirement to prevent potential liablity for debts incurred post retirement.

A

creditors

90
Q

Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm as still being members of the firm until he has … of the change.

A

notice

91
Q

Dissolution of a partnership: E* (FT, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE)

A

expiry

92
Q

Dissolution of a partnership: E (FT*, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE)

A

fixed term

93
Q

Dissolution of a partnership: E (FT, SV*), N, B, D, CoP, I, C (PI, PA, LM, JaE)

A

single venture

94
Q

Dissolution of a partnership: E (FT, SV), N*, B, D, CoP, I, C (PI, PA, LM, JaE)

A

notice

95
Q

Dissolution of a partnership: E (FT, SV), N, B*, D, CoP, I, C (PI, PA, LM, JaE)

A

bankruptcy

96
Q

Dissolution of a partnership: E (FT, SV), N, B, D*, CoP, I, C (PI, PA, LM, JaE)

A

death

97
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP*, I, C (PI, PA, LM, JaE)

A

charge of property

98
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I*, C (PI, PA, LM, JaE)

A

illegality

99
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C* (PI, PA, LM, JaE)

A

court

100
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI*, PA, LM, JaE)

A

permanent incapacity

101
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA*, LM, JaE)

A

prejudicial action

102
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA, LM*, JaE)

A

loss making

103
Q

Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE*)

A

just and equitable

104
Q

A partnership (does / does not) have a separate legal personality distinct from its members.

A

does not

105
Q

The liability of a member of a company is USUALLY …

A

limited

106
Q

The liability of a partner in an ordinary partnership is …

A

unlimited

107
Q

The property of a company is owned by …

A

that company

108
Q

The property of a partnership is owned by …

A

its partners

109
Q

A partnership may not give … charge security to a lender.

A

floating

110
Q

Only a … may give floating charge security to a lender.

A

company

111
Q

In the absence of an agreement to the contrary a partnership (does / does not) have perpetual succession.

A

does not

112
Q

Notwithstanding a provision in a company’s articles, the transfer of a share transfers … the rights attached to that share.

A

all

113
Q

Notwithstanding a provision in a company’s articles, the transfer of a share (does / does not) transfer the management [voting] rights attached to it.

A

does

114
Q

A partner may only … their interest in a partnership.

A

assign

115
Q

The minimium number of partners in a partnership is …

A

two

116
Q

The minimum number of members of a company incorporated under the Companies Act 2006 is …

A

one

117
Q

A partnership (must / need not) file accounts with the registrar.

A

need not

118
Q

There (is / is not) a statutory requirement that partnership accounts are audited.

A

is not

119
Q

A partner in a partnership (does / does not) normally have the right to be involved in management decisions.

A

does

120
Q

A partnership is a effectively a collection of … with a common trade.

A

sole traders

121
Q

A court (may / may not) deem that two or more persons are partners even if they expressly state that they are not.

A

may

122
Q

Any disputes between partners which cannot be resolved using the partnership agreement are settled with reference to the …

A

Partnership Act (1890)

123
Q

Partnerships can do anything which they want so long as it is …

A

legal

124
Q

Partnership Act (1890): M* E D I C S I N B E D

A

Management: every partner may take part in the managment of the partnership business.

125
Q

Partnership Act (1890): M E* D I C S I N B E D

A

Equality: all the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses whether of capital or otherwise sustained by the firm.

126
Q

Partnership Act (1890): M E D* I C S I N B E D

A

Derived benefit: every partner must account to the firm for any benefit derived by him without the consent of the orher partners from any transaction concerning the partnership, or from any use by him of the partnership property name or business connection.

127
Q

Partnership Act (1890): M E D I* C S I N B E D

A

Indemnity: the firm must indemnify every partner in respect of payments made and personal liabilities incurred by him in the ordinary and proper conduct of the business of the firm, or about anything necessarily done for the preservation of the business or property of the firm.

128
Q

Partnership Act (1890): M E D I C* S I N B E D

A

Competition: if a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.

129
Q

Partnership Act (1890): M E D I C S I* N B E D

A

Interest: a partner making, for the purpose of the partnership, any actual payment or advance beyond the amount of capital which he agreed to subscribe, is entitled to interest at the rate of five per cent per annum from the date of the payment or advance.

A partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by him.

130
Q

Partnership Act (1890): M E D I C S I N* B E D

A

No person: may be introduced as a partner without the consent of all existing partners.

131
Q

Partnership Act (1890): M E D I C S I N B* E D

A

Books: the partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than one), and every partner may, when he thinks fit, have access to and inspect and copy any of them.

132
Q

Partnership Act (1890): M E D I C S I N B E* D

A

Expulsion: no majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.

133
Q

Partnership Act (1890): M E D I C S I N B E D*

A

Differences: any difference arising as to ordinary matters concerned with the partnership business may be decided by a majority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners.

134
Q

Where no fixed term has been agreed upon for the duration of the partnership, any partner may retire from the partnership …

A

at will

135
Q

Partnership Agreements: A* D D C I S C G T

A

Accounts and audit.

136
Q

Partnership Agreements: A D* D C I S C G T

A

Division of profits.

137
Q

Partnership Agreements: A D D* C I S C G T

A

Drawings.

138
Q

Partnership Agreements: A D D C* I S C G T

A

Capital and current accounts?

139
Q

Partnership Agreements: A D D C I* S C G T

A

Interest.

140
Q

Partnership Agreements: A D D C I S* C G T

A

Salaries.

141
Q

Partnership Agreements: A D D C I S C* G T

A

Capital requirements and maintenance.

142
Q

Partnership Agreements: A D D C I S C G* T

A

Goodwill.

143
Q

Partnership Agreements: A D D C I S C G T*

A

Time period.

144
Q

Partners’ authority is based on the law of …

A

agency

145
Q

A partner in a partnership has … duties to that partnership.

A

fiduciary

146
Q

If a partnershp defaults on a secured loan, the creditor may take action against the partners individually or sue them in the name of …

A

the partnership

147
Q

If a partnership is insolvent, … proceedings may be taken against its partners.

A

bankruptcy

148
Q

If a partnership is insolvent, bankruptcy proceedings may be taken against its …

A

partners

149
Q

A partnership may be wound up in the same way as an …

A

unregistered company

150
Q

Notwistanding the provisions of any partnership agreement, when a partner leaves, dies or becomes bankrupt the partnership is …

A

dissolved

151
Q

End of partnerships: D* I S S O L U T I O N S

A

death

152
Q

End of partnerships: D I* S S O L U T I O N S

A

insolvency

153
Q

End of partnerships: D I S* S O L U T I O N S

A

sending notice (in a partnership at will)

154
Q

End of partnerships: D I S S* O L U T I O N S

A

share of the firm is pledged by a partner to settle their debts

155
Q

End of partnerships: D I S S O* L U T I O N S

A

object of the venture is ended

156
Q

End of partnerships: D I S S O L* U T I O N S

A

lapse of (specified time)

157
Q

End of partnerships: D I S S O L U* T I O N S

A

unable to carry out one’s obligations under the partnership agreement (incapacity)

158
Q

End of partnerships: D I S S O L U T* I O N S

A

termination by the court on ‘just and equitable’ grounds

159
Q

End of partnerships: D I S S O L U T I* O N S

A

insanity (no longer a ground in England and Wales)

160
Q

End of partnerships: D I S S O L U T I O* N S

A

only able to carry on at a loss

161
Q

End of partnerships: D I S S O L U T I O N* S

A

nefarious conduct, prejudicially affecting the carrying on of the business

162
Q

End of partnerships: D I S S O L U T I O N S*

A

shirty conduct, in persistent breach of the partnership agreement

ICAEW Law 09: Sole traders and partnerships. (4 decks)

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