Question 1

Which of the following occurs upon dissolution of a partnership when liabilities of the partnership are greater than the liquidated assets of the partnership?

Accepted Answer

A)   The liabilities remain unpaid because the partners are not liable.
B)   The managing partner is liable for the liabilities, but other partners are not liable.
C)   Each partner must contribute his or her share of the losses to pay creditors.
D)   Only partners who did not participate in the management of the business must contribute his or her share of the losses to pay creditors.
E)   Only partners who participated in management of the business must contribute his or her share of the losses to pay creditors.F) A) and E)
G) C) and E)

Question 2

Which of the following was the result on appeal in Miller v. Bill & Carolyn Ltd. P'Ship, the case in the text involving whether a bankruptcy trustee was entitled to dissolution of a limited partnership in which the debtor was a limited partner?

Accepted Answer

A)   On the basis that it was not reasonable to expect the partnership to continue in business in conformity with the partnership agreement, the court reversed the Bankruptcy Appellate Panel's ruling and found that the trustee was entitled to dissolution of the partnership.
B)   On the basis that the partnership agreement's stated purpose did not conform to the representations made at trial regarding the partnership's business interests, the court upheld the Bankruptcy Appellate Panel's ruling that the trustee was entitled to dissolution.
C)   Finding that as a matter of law the bankruptcy trustee was entitled to choose at his option whether or not to seek dissolution, the court reversed the Bankruptcy Appellate Panel's decision refusing to uphold the trustee's motion seeking dissolution.
D)   Finding an absence of evidence indicating that it was not reasonable practicable for the partnership to carry on its business in conformity with the partnership agreement, the court upheld the Bankruptcy Appellate Panel's decision refusing to require dissolution.
E)   Finding that the debtor was willing to continue as both a general and limited partner, the court upheld the Bankruptcy Appellate Panel's decision refusing to require dissolution.F) A) and B)
G) None of the above

Question 3

"Parent Involvement." Marcy and George, both artists, discussed forming a partnership to paint portraits. George's parents were interested in investing in the partnership, but they wanted to avoid any liability. George suggested forming a limited partnership. He told Marcy and his parents that they could do it very informally, that an oral agreement was sufficient, and that the parents would be protected from liability. Although George protested strongly on the basis that it was a waste of money, Marcy insisted that a certificate of limited partnership be filed with the secretary of state. After a few months, Marcy and George decided that they wanted to add a new partner, Betty, to the partnership as a general partner. Betty had some expertise in the portrait field but, unfortunately, she had also had some scrapes with local law enforcement. George's parents objected strenuously to the admission of Betty. Marcy and George took the position that the parents, as limited parents, had no say in the admission of a new partner. George's father, who had an interest in painting and was concerned that the partnership was not making very much money, decided to start coming to the partnership studio to manage the business and attempt to bring it into profitability.
-Was George correct that a limited partnership may be created informally through an oral agreement?

Accepted Answer

A)   Yes, an oral agreement will suffice.
B)   George was partially correct. A written agreement is required, but only the general partners are required to sign it. Limited partners may agree orally.
C)   George was partially correct. A written agreement is required, but only the limited partners are required to sign it. General partners may agree orally.
D)   George was incorrect, and both general and limited partners must sign a certificate of limited partnership and file the certificate with the secretary of state.
E)   George was incorrect, and both general and limited partners must sign a document of partnership limitation that is kept on file in the primary business office of the limited liability partnership.F) A) and E)
G) None of the above

Question 4

Which of the following is true when upon dissolution of a partnership one partner pays liabilities of the partnership that are greater than the liquidated assets of the partnership?

Accepted Answer

A)   The partner who paid has a right of contribution against any partner who did not pay.
B)   The partner who paid has no right of contribution against any other partner.
C)   The partner who paid has a right of contribution against other partners only if the partner who paid was not the managing partner.
D)   The partner who paid has a right of contribution only against other partners who participated in the management of the partnership.
E)   The partner who paid has a right of contribution only against other partners who did not participate in the management of the partnership.F) None of the above
G) C) and D)

Question 5

Which of the following is not a reason for provisional dissolution in Spain?

Accepted Answer

A)   A partner fails to comply with provisions of the contract.
B)   A partner inexplicably abandons the partnership and does not return on request.
C)   A partner is declared bankrupt.
D)   A partner fails to bring the capital he or she promised.
E)   A partner uses capital belonging to the partnership in his or her own name.F) A) and C)
G) A) and B)

Question 6

Which of the following is true regarding "provisional dissolution" of a partnership in Spain?

Accepted Answer

A)   Provisional dissolution is followed by litigation to determine the legitimacy of the termination request.
B)   Provisional dissolution occurs whenever a partner requests dissolution without the intervention of the court.
C)   Provisional dissolution occurs whenever a party dies.
D)   Provisional dissolution is the only method of dissolution of a partnership in Spain.
E)   Provisional dissolution is effective for 30 days prior to actual dissolution in order to allow the parties to wind-up the partnership.F) A) and D)
G) C) and D)

Question 7

Which of the following is true regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

Accepted Answer

A)   A partner has no actual authority to bind the partnership after the partnership is dissolved.
B)   A partner has actual authority to bind the partnership for 10 days after the partnership is dissolved.
C)   A partner has actual authority to bind the partnership for 30 days after the partnership is dissolved.
D)   A partner has actual authority to bind the partnership for 45 days after the partnership is dissolved.
E)   After a partnership is dissolved, a partner has actual authority to bind the partnership to any third party who has not been given notice of dissolution.F) A) and C)
G) B) and E)

Question 8

When a partnership is dissolved based upon the withdrawal of a partner, that partner no longer has actual authority to bind the partnership.

Accepted Answer

A) True 
 B)False

Question 9

In a dissolution of a partnership that will be continued, if a noncontinuing partner holds 20% of the partnership in which the assets are valued at $10,000 how much will the partner receive assuming the noncontinuing partner has taken no wrongful action against the partnership?

Accepted Answer

A)   $2,000
B)   $2,000 minus any losses the noncontinuing partner's leaving caused the partnership to sustain.
C)   $2,000 minus the noncontinuing partner's share of loses, if any, in the first year after dissolution.
D)   $2,000 minus the noncontinuing partner's share of expenses involved with dissolution.
E)   NothingF) A) and B)
G) A) and D)

Question 10

Before a partnership may be terminated, the partnership must experience the winding-up stage, but not the dissolution stage.

Accepted Answer

A) True 
 B)False

Question 11

Limited partnerships are also known as which of the following?

Accepted Answer

A)   General partnerships
B)   Limited liability partnerships
C)   Special partnerships
D)   Specific partnerships
E)   Both limited liability partnerships and specific partnershipsF) All of the above
G) C) and D)

Question 12

If a limited partnership is dissolved, which of the following is the order in which the limited partnership's assets are distributed?

Accepted Answer

A)   Payment to partners who have loaned the partnership money, payment to third-party creditors, payment to the partners according to their investments in the partnership, and payment to the partners on the basis of their shares of the profits.
B)   Payment to partners who have loaned the partnership money, payment to the partners according to their investments in the partnership, payment to third-party creditors, and payment to the partners on the basis of their shares of the profits.
C)   Payment to third-party creditors, payment to the partners according to their investments in the partnership, payment to partners who have loaned the partnership money, and payment to the partners on the basis of their shares of the profits.
D)   Payment to third-party creditors, payment to partners who have loaned the partnership money, payment to the partners according to their investments in the partnership, and payment to the partners on the basis of their shares of the profits.
E)   Payment to the partners on the basis of their shares of the profits, payment to third-party creditors, payment to partners who have loaned the partnership money, and payment to the partners according to their investments in the partnership.F) B) and E)
G) A) and D)

Question 13

According to the Revised Uniform Limited Partnership Act, which of the following is not a reason for which a limited partnership can be dissolved?

Accepted Answer

A)   The expiration of the term established in the certificate of limited partnership.
B)   The completion of the objective established in the certificate.
C)   The withdrawal of the general partner (unless the certificate establishes that other general partners will continue) .
D)   An act of the court.
E)   The written consent of a majority of all partners (limited and general) .F) A) and D)
G) C) and D)

Question 14

Which of the following is true if a partner wrongfully dissolves a partnership?

Accepted Answer

A)   The partner who wrongfully dissolved the partnership can require that the business be wound up.
B)   The partner who wrongfully dissolved the partnership can be held liable for damages to the remaining partners.
C)   The remaining partners must close the business.
D)   The partner who wrongfully dissolved the business must petition the court in order to complete the process.
E)   The remaining partners must petition the court in order to complete the process.F) A) and C)
G) D) and E)

Question 15

"Fish Fiasco." Matt agreed to be a limited partner in Susie and Bill's business of importing tropical fish. Susie and Bill were general partners. Matt contributed $10,000 to the partnership as his capital contribution. The partnership made a profit of $30,000 the first year. Matt was paid nothing. When he inquired, Susie told him that a limited partner was only entitled to a share of profits as approved by the general partners and that perhaps things would be better the next year. The next year, however, importation was banned because of a fish disease, and the partnership lost money and owed debts of $60,000. At the end of the year, Susie and Bill asked Matt to contribute $20,000 to cover the debts. When Matt complained about the amount, Bill told him that he and Susie were being overly reasonable and that he was legally liable for an even larger percentage. In an attempt to keep the business afloat, Matt told Susie and Bill that they should consider suing a customer who had not paid a large account. Susie and Bill replied, however, that they were morally opposed to lawsuits and that they had the final say on litigation.
-Which of the following is true regarding Matt's entitlement to sue on behalf of the partnership?

Accepted Answer

A)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring the suit.
B)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring suit but only after obtaining the permission of all general partners.
C)   If the general partners fail to bring a suit on behalf of the limited partnership, the limited partner can bring suit but only after obtaining the permission of a majority of the general partners.
D)   A limited partner has no rights to bring suit on behalf of the partnership.
E)   A limited partner has a right to bring suit on behalf of the partnership only if the litigation is in an amount of over $75,000 and then only with the permission of all general partners.F) B) and C)
G) C) and D)

Question 16

Which of the following is not a reason for full dissolution of a partnership in Spain?

Accepted Answer

A)   A partner fails to comply with provisions of the contract.
B)   One partner dies.
C)   A partner is declared insane and unfit to manage the business.
D)   A partner is declared bankrupt.
E)   A partner requests that the partnership be terminated.F) None of the above
G) C) and D)

Question 17

When is dissolution of a partnership considered complete?

Accepted Answer

A)   Only when any partner, by choice, stops fulfilling the role of a partner to the business.
B)   Only when any partner, by default, stops fulfilling the role of a partner to the business.
C)   When any partner, by choice or by default, stops fulfilling the role of a partner to the business.
D)   Thirty days after any partner, by choice or by default, stops fulfilling the role of a partner to the business.
E)   Thirty days after any partner, by default, stops fulfilling the role of a partner to the business.F) C) and D)
G) A) and E)

Question 18

Which of the following may cause the dissolution of a partnership?

Accepted Answer

A)   Only an act of the partners
B)   Only the operation of the law
C)   Only an act of the court
D)   An act of the partners, an operation of the law, or an act of the court.
E)   An act of the partners and an operation of the law, but not an act of the court.F) A) and B)
G) A) and D)

Question 19

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Accepted Answer

A court may dissolve a partnership for t...

Question 20

"Big Spender." Wally was a partner in XYZ law firm. He decided to withdraw from the partnership because he wanted to retire early somewhere in the Caribbean. The partnership agreement of XYZ law firm did not specify the objective or duration of the partnership. Although Wally gave proper notice, the other partners claimed that he had no right to withdraw. Wally was angry and decided to get even. Two days after he withdrew and before the partnership had provided notification to any suppliers of his departure, Wally went to the office supply store at which he typically purchased supplies on account for the firm. He purchased several cameras, a computer, and other items which he placed on the firm account. Wally just smiled when Sam, the manager at the store, told Wally that he really appreciated the law firm's business. The next day Wally headed for the Caribbean and cannot be located. Sam later requests that XYZ firm pay the bill for Wally's purchases. The law firm, whose members had decided to continue the partnership after the dissolution resulting from Wally's resignation, refused on the basis that Wally had no authority to make the purchases. Sam says that he did not know that and that he expects to be paid immediately.
-Which of the following is true regarding whether the law firm is liable for purchases made by Wally?

Accepted Answer

A)   The law firm is liable for the purchases because it had not provided notification to the office supply that Wally was no longer authorized to make purchases for the firm.
B)   The law firm is liable for the purchases because Wally's authority continued for seven days after his resignation.
C)   The law firm is liable for the purchases because Wally's authority continued for ten days after his resignation.
D)   The law firm is liable for the purchases only if Wally was treated inequitable during the winding-up process.
E)   The law firm is liable for the purchases only if Wally cannot be found within one year of the date the purchases were made.F) C) and E)
G) All of the above

Exam 37: Partnerships: Termination and Limited Partnerships

Which of the following is true regarding "provisional dissolution" of a partnership in Spain?

Correct Answer
verified

Which of the following is true if a partner wrongfully dissolves a partnership?

Correct Answer
verified

Which of the following is not a reason for provisional dissolution in Spain?

Correct Answer
verified

Which of the following is true when upon dissolution of a partnership one partner pays liabilities of the partnership that are greater than the liquidated assets of the partnership?

Correct Answer
verified

Before a partnership may be terminated, the partnership must experience the winding-up stage, but not the dissolution stage.

Correct Answer
verified

Which of the following is not a reason for full dissolution of a partnership in Spain?

Correct Answer
verified

Which of the following may cause the dissolution of a partnership?

Correct Answer
verified

Which of the following was the result on appeal in Miller v. Bill & Carolyn Ltd. P'Ship, the case in the text involving whether a bankruptcy trustee was entitled to dissolution of a limited partnership in which the debtor was a limited partner?

Correct Answer
verified

Limited partnerships are also known as which of the following?

Correct Answer
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When is dissolution of a partnership considered complete?

Correct Answer
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Which of the following occurs upon dissolution of a partnership when liabilities of the partnership are greater than the liquidated assets of the partnership?

Correct Answer
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Correct Answer
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When a partnership is dissolved based upon the withdrawal of a partner, that partner no longer has actual authority to bind the partnership.

Correct Answer
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Correct Answer
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In a dissolution of a partnership that will be continued, if a noncontinuing partner holds 20% of the partnership in which the assets are valued at $10,000 how much will the partner receive assuming the noncontinuing partner has taken no wrongful action against the partnership?

Correct Answer
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If a limited partnership is dissolved, which of the following is the order in which the limited partnership's assets are distributed?

Correct Answer
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Correct Answer
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According to the Revised Uniform Limited Partnership Act, which of the following is not a reason for which a limited partnership can be dissolved?

Correct Answer
verified

Which of the following is true regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

Correct Answer
verified

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Correct Answer
verified
A court may dissolve a partnership for t...
View Answer

Exam 37: Partnerships: Termination and Limited Partnerships

Which of the following is true regarding "provisional dissolution" of a partnership in Spain?

Correct AnswerverifiedShow Answer

Which of the following is true if a partner wrongfully dissolves a partnership?

Correct AnswerverifiedShow Answer

Which of the following is not a reason for provisional dissolution in Spain?

Correct AnswerverifiedShow Answer

Which of the following is true when upon dissolution of a partnership one partner pays liabilities of the partnership that are greater than the liquidated assets of the partnership?

Correct AnswerverifiedShow Answer

Before a partnership may be terminated, the partnership must experience the winding-up stage, but not the dissolution stage.

Correct AnswerverifiedShow Answer

Which of the following is not a reason for full dissolution of a partnership in Spain?

Correct AnswerverifiedShow Answer

Which of the following may cause the dissolution of a partnership?

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Miller v. Bill & Carolyn Ltd. P'Ship, the case in the text involving whether a bankruptcy trustee was entitled to dissolution of a limited partnership in which the debtor was a limited partner?

Correct AnswerverifiedShow Answer

Limited partnerships are also known as which of the following?

Correct AnswerverifiedShow Answer

When is dissolution of a partnership considered complete?

Correct AnswerverifiedShow Answer

Which of the following occurs upon dissolution of a partnership when liabilities of the partnership are greater than the liquidated assets of the partnership?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a partnership is dissolved based upon the withdrawal of a partner, that partner no longer has actual authority to bind the partnership.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a dissolution of a partnership that will be continued, if a noncontinuing partner holds 20% of the partnership in which the assets are valued at $10,000 how much will the partner receive assuming the noncontinuing partner has taken no wrongful action against the partnership?

Correct AnswerverifiedShow Answer

If a limited partnership is dissolved, which of the following is the order in which the limited partnership's assets are distributed?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

According to the Revised Uniform Limited Partnership Act, which of the following is not a reason for which a limited partnership can be dissolved?

Correct AnswerverifiedShow Answer

Which of the following is true regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

Correct AnswerverifiedShow Answer

Set forth the circumstances under which a partnership may be dissolved by act of the court.

Correct AnswerverifiedA court may dissolve a partnership for t...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A court may dissolve a partnership for t...
View Answer