Partnerships

Question 1

T/F: Partners in a partnership are personally liable for their debts

Answer 1

TRUE

Question 2

Partnerships have a ____ ______ taxation.

Answer 2

flow-through

Question 3

The _______ ______ controls the partnership.

Answer 3

partnership agreement

Question 4

The partnership agreement governs the _______ among the partners, the ______ of the partnership and the ___ and ____ for amending the agreement.

Answer 4

relationships
business/conduct
means and conditions

Question 5

Property acquired by a partnership is _____ of the _____ partners.

Answer 5

not

individual

Question 6

An ___ outside of the ____ _____ of business or an _________ to the partnership agreement may only be undertaken with the _______ vote or _____ of all the partners.

Answer 6

act 
ordinary 
amendment
affirmative
consent

Question 7

A partner is an _____ of the partnership

Answer 7

agent

Question 8

A 3P can sue the _______ for contracts + torts of the _____.

Answer 8

partnership

agents

Question 9

All ______ are liable ____ and ____ for all ____ of the partnership

Answer 9

partners
jointly
severally
obligations

Question 10

Partnerships can obtain funds by ____, ___ and/or ____ their _____ in the business.

Answer 10

salary
profits
selling
interest

Question 11

Each ____ is entitled to an ____ share of the partnership distributions and is _____ with the losses of the partnership in _____ to the partner’s share of the _______.

Answer 11

partner
equal 
chargeable 
proportion 
distributions

Question 12

T/F: Distributions are taxable

Answer 12

FALSE

Question 13

T/F: Only partner’s with a transferable interest can sell their interest.

Answer 13

TRUE

Question 14

Transferable interest is having the right to receive _____ from a partnership that was initially owned by a person in the _____ as a partner.

Answer 14

distributions

capacity

Question 15

A buy-sell agreement is a ______ agreement to provide for the _____ of the ______ interest back to the partnership or _____.

Answer 15

separate
sale
partnership
partners

Question 16

Dissociation is triggered when _____ partner wants to _____ from the partnership.

Answer 16

one

withdraw

Question 17

Involuntary dissociation occurs when either ?

Answer 17

1. an event stated in the partnership agreement to cause the person’s dissociation occurs or
2. the person is expelled as a partner

Question 18

Judicial dissociation occurs when a person is _____ by a ____ ___ .

Answer 18

expelled

judicial order

Question 19

An judicial order for exploration if the parter has___? (3)

Answer 19

1. engaged in wrongful conduct that has or will affect the partnership’s business adversely
2. willfully or persistently has committed a material breach of agreement or duty/obligation
3. engaged in conduct relating to partnership’s business making it not practicable to carry on business with the person as a partner.