Partnership Quiz

Question 1

A partner owes the fiduciary duty of _________ to the partnership and to the other _________.

A partner must act in the _______ ____________ of the partnership

Answer 1

loyalty
partners
best interests

Question 2

Under UPA, a partner must:
(1) account for any p_________, p________, or b_________ derived from partnership property or business.

A partner must not:
(1) ___________ partnership assets;
(2) have an interest ___________ to the partnership; and
(3) ___________ with the partnership, unless agreed otherwise.

Answer 2

property, profit or benefit

appropriate
adverse
compete

Question 3

If a partner breaches the duty of loyalty, he or she may be held ___________ ________ to the partnership for __________.

Answer 3

personally liable
losses

Question 4

A partner owes the ___________ duty of care to the partnership and to the other partners.

Answer 4

fiduciary

Question 5

Express actual authority for acts within the ordinary course of business must be approved by ….

Answer 5

a majority of the partners

Question 6

Acts outside the ordinary course of business must be approved _______________.

Answer 6

unanimously

Question 7

A partner has implied actual authority to take actions reasonably ___________ or ___________ to achieve the partner’s authorized duties.

Answer 7

incidental
necessary

Question 8

If the partnership agreement is silent, a partner has authority for _______ and ____________ unless he or she knows that the other partners might __________ or if _____________ with the partners is appropriate.

Answer 8

usual and customary
disagree
consultation

Question 9

General partners ARE/ ARE NOT personally liable for all obligations of the partnership unless otherwise agreed by the claimant or as provided by law.

Answer 9

ARE

Question 10

Incoming partners are not liable for obligations incurred by the partnership prior to ______ ______________.

Answer 10

their admission

Question 11

A judgment creditor generally will not be able to execute against a partner a judgment for a partnership debt unless: (1) the partner is found __________ liable,
(2) a ________ _____________ is entered against that partner, and
(3) partnership assets are ____________ to satisfy the judgment.

Answer 11

personally
final judgment
insufficient

Question 12

Limited partners are not personally liable for obligations of a limited partnership, EXCEPT:
1) For their own _________;
2) For partnership obligations up to the amount of their ___________ ___________; OR
3) May become personally liable if the partner participates in ______________ (depending on the jurisdiction).

Answer 12

misconduct
capital contribution
management

Question 13

Under the ______ (2001), a limited partner’s participation in the management or control of the business does NOT create personal liability.

Answer 13

ULPA

Question 14

Under the RUPA, a partner in a limited liability partnership (LLP) is not liable for partnership obligations, except:
(a) for liabilities arising from their own _____________,
(b) when the partners signs a ___________ ____________, or
(c) for obligations incurred before the partnership _______________ into a limited liability partnership.

Answer 14

misconduct
personal guarantee
transitioned

Question 15

Unless agreed otherwise, dissolution occurs upon the following dissolution events:
A) Notice of a partner’s express will to _________;
B) Occurrence of an agreed upon _______;
C) The business becoming __________; or
D) __________ dissolution.

Answer 15

withdraw
event
unlawful
judicial

Question 16

After dissolution of a partnership, a partner has actual authority to bind the partnership only for acts appropriate for…..

Answer 16

winding up the business.

Question 17

After dissolution of a partnership, a partner has apparent authority to bind the partnership only where:
(1) the partner’s acts would have normally ________ the partnership, and (2) the third party did not have _______ of the dissolution.

Answer 17

bound
notice

Question 18

A general partnership is created when:
(1) ______ or ______ persons;
(2) as ___________;
(3) carry on a business ____ _______.

________ to form a partnership is not required.

Answer 18

two or more
co-owners
for profit

intent

Question 19

A joint __________ or sharing in _______ profits does not automatically create a partnership.

Answer 19

venture
gross

Question 20

A person who receives a share of the profits is presumed to be a partner unless the payment received is a payment:
a) of a ______;
b) for _______ as an employee or independent contractor;
c) of ______;
d) of an ________ or retirement benefit;
e) of ________ or loan charges; or
f) for the sale of ____________ of a business.

Answer 20

debt
wages
rent
annuity
interest
goodwill

Question 21

A partner may dissociate from the partnership at any time upon ________.

Answer 21

notice

Question 22

Dissociation is deemed to be wrongful dissociation if:
a) It is in breach of an _________ p__________ of the partnership agreement; or
b) Before the completion of an agreed-upon _____ or ___________.

Answer 22

express provision
term or undertaking

Question 23

A _________ dissociated partner cannot participate in management or the winding up of a partnership.

Answer 23

wrongfully

Question 24

A partner may be personally liable to the partnership and to the other partners for _______ caused by his or her wrongful ____________.

Answer 24

damages
disassociation

Question 25

partner becomes dissociated upon:
a) The partner providing notice of their express will to withdraw;
b) The occurrence of an agreed upon event;
c) Expulsion pursuant to the partnership agreement;
d) Expulsion by unanimous vote of the partners if it is (a) unlawful to carry on the business with that partner, or (ii) he transferred all of his partnership interest other than for security purposes; e) Judicial expulsion;
f) Bankruptcy;
g) Incapacity or death;
h) Appointment of a personal representative or receiver; or
i) Termination of an entity partner who is not an individual, partnership, corporation, trust, or estate.

Question 26

Dissolution of a Partnership For a Definite Term happens:
A) within 90-days after a partner’s dissociation by death or wrongful dissociation, if a
majority of the remaining partners expressly wish to wind up;
B) upon unanimous express will of all partners to wind up; or
C) upon the expiration of the term or completion of the partnership’s purpose.