09. STUDY MANUAL questions on Sole Traders and Parterhsips. Flashcards
T/F: In England and Wales, an unlimited partnership has no existence distinct from the partners.
TRUE
T/F: Partners share equally in the venture’s profits.
TRUE
under the Partnership Act (1890)
although this can be modified by a Partnership Agreement
In the absence of a provision in a Partnership Agreement, the Partnership Act (1890) requires that the introduction of a new partner requires …
the consent of all existing partners
The Partnership Act (1890) provides that no majority of partners can expel a partner unless …
the power to do so has been conferred by express agreement
If a Partnership Agreement confers the power on partners to expel a partner this must only be exercised in …
good faith
A third party (does / does not) need to enquire whether a partner is acting beyond their auhority when entering into a contract with them.
does not
An ‘ultra vires’ act by a partner (is / is not) nevertheless binding upon partner, the firm, and the other partners.
is
An ‘ultra vires’ act by a partner nevertheless … upon the partner, the firm, and the other partners.
binding
An ‘ultra vires’ act by a partner nevertheless binding upon the …
partner, the firm, and the other partners
A contract entered into by a partner (can / can never) be binding upon former partners.
can
An ‘ultra vires’ act by a partner is only NON binding if the third party has recieved … of their limited power to bind the firm.
notice
If a third party has not received notice of the retirement of a partner they (are / are not) entitled to assume that the partner is still a member of the partnership.
are
If a third party has not received … of the retirement of a partner they are entitled to assume that the partner is still a member of the partnership.
notice
T/F: a partnership has a separate legal personality and therefore limited liability.
FALSE
T/F: a company continues in excistence even if its participants change.
TRUE
perpetual succession
T/F: a company’s liability is limited.
FALSE
the liability of its MEMBERS may be limited. However the company bears full responsibility for its debts.
T/F: A partnership is not subject to any legislative regulation.
FALSE
the Partnership Act (1890) is one piece of legislation affecting partnershps.
T/F: there is a maximum number of members in a LLP.
FALSE
T/F: A LLP requires a general partner.
FALSE
a limited partnership under the 1907 Act does.
T/F: a LLP is normally required to have its accounts audited.
TRUE
T/F: the members of an LLP are required to produce a ‘directors’ report.
FALSE
To form an LLP, an incorporation document signed by at least … subscribers must be sent to the registrar.
two
To form an LLP, an incorporation document signed by at least two subscribers must be sent to the …
registrar
The incorporation document for an LLP must give the names and addresses of at least … ‘designated ‘members.
two
T/F: details of the assets of an LLP must be given on registration.
FALSE
T/F: a statement detailing the contribution that each member is committed to make upon winding up must be submitted as part of the process of registering an LLP.
FALSE
What is the statutory definition of partnership?
‘Partnership is the relationship which subsists between two or more persons carrying on a business in common with a view of profit.’ S1 Parnership Act (1890).
T/F: A partnership can exist when parties enter into a single transaction rather than a series of transactions.
TRUE
Indeed a court may deem that such a ‘joint venture’ is a partnership even if the ‘partners’ did not indend it to be so.
Assets beneficially owned by the partners (the firm) are known as …
partnership property
T/F: Partnership property must be owned in equal shares.
FALSE
A partners’ acts bind themselves, the firm and the other partners provided that …
the third party does not know that they lack authority and knows or believes them to be a partner.
T/F: An LLP has a legal personality separate from that of its members.
TRUE
S1. Limited Liability Partnerships Act (2000).
T/F: an incorporation document for an LLP must state its trading address.
FALSE
Only the address of its registered office is required.
T/F: an incorporation document for an LLP must state the tax status of its members.
FALSE
T/F: an incorporation document for an LLP must state at least two members which are to be its ‘designated members.’
TRUE
Although it may state that all member who are from time to time members of the LLP are designated members.
T/F: the members of an LLP are agents of the LLP and each other.
FALSE
Unlike a general or unlimited partnership, the members are NOT agents of each other.
T/F: an LLP must deliver audited accounts to the registrar each year.
TRUE
although similar exemptions apply to those for Limited Companies.
T/F: an LLP must deliver a Confirmation Statement to the registrar each year.
TRUE
T/F: the members of an LLP may propose a voluntary arrangment.
TRUE
The insolvency of an LLP is dealt with in a similar way as that of a …
Limited Company
The insolvency of a general or unlimited partnership is dealt with in a similar way as that of an …
individual
