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Exam 37: All Forms of Partnerships

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Question 1

True/False

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In winding up a general partnership, creditors are paid before partners receive their capital contributions.

A) True
B) False

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verified

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Question 2

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A majority of the states treat a partnership as an entity for most purposes.

A) True
B) False

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Question 3

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Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L

In a general partnership, the acts of one partner in the ordinary course of business can subject the other partners to personal liability.

Unlike most agents, each partner in a partnership has an ownership interest in the business.

Fact Pattern 37-2 Kristin and Lindsey are partners in Mobile Devise, an online marketing firm. -Refer to Fact Pattern 37-2. Lindsey dissociates from Mobile. Kristin signs a contract with Organic Olives, a food seller, apparently on Mobile's behalf. Organic Olives does not know of Lindsey's dissociation. The contract is binding on

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

Stefani and Tyler agree in an exchange of e-mail to form a partnership to buy and sell real property. Their partnership agreement is legally binding

If no fixed duration of the partnership is specified, the partnership is a partnership at will, which means that it cannot be dissolved.

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations

Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is

Brad and Carol are partners in Doctors for Children, a medical clinic. Brad's dissociation from the firm results in

A limited partnership cannot be dissolved by court decree.

A third party can never sue one of the partners of a partnership without suing all members of the partnership.

On a partner's dissociation, his or her right to participate in the management and conduct of the business terminates.

Ed, a partner in Farm Equipment Sales, applies for a loan with Growers Bank allegedly on Farm Equipment's behalf but without the authorization of the other partners. The bank knows that Ed is not authorized to take out the loan. Liability in the event of default will be imposed on

Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a partner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?