Partnership: Rights of the Partners

Question 1

A partner’s duty of loyalty to the partnership and the other partners includes the duty to:

1. account to the partnership and hold as trustee for it any property, profit or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by a partner of partnership property, including the appropriation of a partnership opportunity
2. refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership
3. refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership
4. All of the above
5. 1 and 2 only

Answer 1

All of the above

Question 2

If a transaction is a partnership opportunity:

Answer 2

The other partners must consent to a partner taking the opportunity

Question 3

Unless otherwise agreed by the claimant or provided by law, how are partners liable?

Answer 3

Jointly and severally liable for all obligations of the partnership

Question 4

Each partner is entitled to:
. A share of the partnership profits in proportion to that partner’s contribution
2. An equal share of the partnership profits
3. A share of the partnership losses in proportion to the partner’s share of the profits
4. An equal share of the partnership losses
5. 2 and 3 only

Answer 4

5. 2 and 3 only

Question 5

Each partner is entitled to equal rights in:

Answer 5

the management and conduct of the partnership business

Question 6

A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a parent who is:

Answer 6

Who is acting in the ordinary course of business of the partnership

Question 7

A partner’s duty of care to the partnership and the other partners includes refraining from:

1. gross negligence
2. reckless conduct
3. intentional misconduct
4. knowing violation of the law
5. all of the above

Answer 7

all of the above

Question 8

Partnership property held in the name of the partnership may be transferred:

Answer 8

by an instrument of transfer executed by a partner in the partnership name

Question 9

If a partnership files a statement of authority listing Alpha as a partner, and Alpha is not a partner, what should Alpha do?

Answer 9

File a statement of denial denying Alpha’s status as a partner

Question 10

A difference arising as to a matter in the ordinary course of a partnership requires a ____________ vote of the partners; a difference arising as to a matter outside the ordinary course of business of a partnership requires a ____________ vote of the partners.

Answer 10

majority; unanimous

Question 11

An act of a partner binds the partnership if

Answer 11

ordinary course of business

Question 12

An act of a partner binds the partnership if it is an ordinary course of business unless

Answer 12

the partner had no authority or the person with whom the partner was dealing knew that partner lacked authority

Question 13

An act of a partner that is not apparently for carrying on in the ordinary course of business binds partnership only if

Answer 13

the act was authorized by the other partners

Question 14

Is a statement of partnership authority required?

Answer 14

no, you may file it with the state if you want

Question 15

All partners are ______ liable unless otherwise agreed upon

Answer 15

jointly and severally

Question 16

Partners are/are not liable for crimes of other partners unless partner participated in the crime

Answer 16

are not

Question 17

How do you organize the money in a partnership?

Answer 17

Each partner is deemed to have an account that is credited. Each partner is entitled to an equal share of the partnership profits and is chargeable with a star elf the partnership losses in proportion.