Partnerships

Question 1

A partner is an ___ of the partnership for purposes of its business

Answer 1

Agent

Question 2

What happens when partner acts with ___ or ___ authority?

Answer 2

Partner can BIND partnership if they act with actual or apparent authority

Question 3

Partner acts with apparent authority when

Answer 3

An unauthorized act is performed in the ordinary course of apparently carrying on partnership business in the geographic area the partnership typically acts

Question 4

Can a dissociated partner bind the partnership? If so, how?

Answer 4

Yes, as a former agent of partnership, he has apparent authority to bind partnership.

Question 5

Former partner’s apparent authority exists when

Answer 5

The other party to the transaction

1) reasonably believed dissociated partner is a partner

2) does not have notice of partner’s dissociation

3) not deemed to have knowledge of dissociated partner’s lack of authority

Question 6

Can a partner compel distribution of partnership profits?

Answer 6

Not unless partnership agreement provided otherwise

Question 7

To what proportion of rights do each partner have in management and conduct of partnership?

Answer 7

Equal rights

Question 8

When is Property rebuttably presumed to be a partner’s separate property rather than the property of the partnership?

Answer 8

1) When property is acquired in name of one or more partners,

2) instrument transferring title does not indicate person’s capacity as a partner or the existence of the partnership; or

3) partnership assets were not used to acquire the property

Question 9

Each partner’s account reflects that partner’s

Answer 9

1) contributions to the partnership and

2) partner’s share of the pre dissolution profits and losses

Question 10

What must be done after liquidation of partnership assets?

Answer 10

Partner’s account must be adjusted to reflect the profits and losses that result from the liquidation of partnership assets

Question 11

After adjustments for liquidation of partnership assets, any partners with a negative account balance must

Answer 11

Contribute to partnership an amount necessary to bring account balance to zero

Question 12

After account balance is at zero, the partnership must make a

Answer 12

Final liquidating distribution to any partner w a positive account balance

Question 13

a general partner who becomes a limited partner due to a conversion is liable for any obligation incurred by the limited partnership in

Answer 13

The 90 days following the conversion, as long as the other party to the transaction reasonably believes that the limited partner is a general partner at the time of the transaction.

Question 14

What must a person do to become a partner of an EXISTING PARTNERSHIP

Answer 14

Obtain consent from all existing partner’s

Question 15

A capital contribution made by a partner to the partnership is subject to the claims of

Answer 15

Existing creditors

Question 16

Any capital contribution made by a new partner may be used by the partnership to pay partnership obligations, including

Answer 16

obligations incurred prior to the new partner becoming a partner.

Question 17

Unlike a partner in a general partnership, a partner in a limited liability partnership (LLP) is not

Answer 17

personally liable simply by virtue of his status as a partner for the obligations of the limited liability partnership.

Question 18

Who is liable for obligation that is entered into by a partner as an agent of the LLP?

Answer 18

Only the LLP itself

Question 19

The name of a limited partnership must contain the words

Answer 19

“limited partnership,”

“a limited partnership,” or

the abbreviations “L.P.” or “LP.”

Question 20

Is a partnership liable for partner’s tortious acts?

Answer 20

Yes, including fraud, committed in the ordinary course of the partnership business, or with actual or apparent partnership authority.

Question 21

To what degree are partners liable for partnership obligations?

Answer 21

Jointly and severally liable

INCLUDING ALL TORT AND K OBLIGATIONS

Question 22

When an agreement is silent as to the apportionment of partnership losses, but addresses the division of partnership profits, a partner is chargeable with a share of the losses in proportion to

Answer 22

Share of profits, rather than capital contributions

Question 23

A partnership may pursue a legal action against a partner for

Answer 23

Breach of partnership agreement or violating duty owed to partnership that caused partnership harm

Question 24

a partner may pursue a legal action against the partnership or another partner to enforce

Answer 24

Partner’s rights under partnership agreement including breach of duty of loyalty