Question 1

The winding-up stage in the termination of a partnership is complete when which of the following happens?

Accepted Answer

A)   When account is taken of the assets of the partnership and the assets are distributed among the partners.
B)   When all assets of the partnership are sold.
C)   When all partners sign releases terminating the partnership.
D)   When the partnership is dissolved.
E)   When all claims against the partnership by third parties are either settled or resolved in court.F) C) and E)
G) A) and B)

Question 2

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 3

Which of the following is true about an LLC?

Accepted Answer

A)   To obtain limited liability, owners must give up some of their rights to participate in management.
B)   The structure of management must adhere to statutory constraints.
C)   Owners are referred to as partners.
D)   Generally, each member may be allowed to participate in the management of the company
E)   Members are not equally involved in the management of the company.F) C) and D)
G) A) and B)

Question 4

If a limited partnership is dissolved, the order in which the limited partnership's assets are distributed is as follows:

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) C) and E)
G) A) and D)

Question 5

When a partner dies, the partnership is terminated by an act of the court.

Accepted Answer

A) True 
 B)False

Question 6

If, upon dissolution of a partnership, liabilities of the partnership are greater than the liquidated assets of the partnership, which of the following occurs?

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) C) and D)
G) C) and E)

Question 7

Which of the following helps govern and guide limited partnerships?

Accepted Answer

A)   Revised Uniform Limited Partnership Act
B)   Limited Liability Partnership Act
C)   Special Liability Partnership Act
D)   Uniform Organization of Partners Act
E)   Limited Partnership Act of 2010F) A) and D)
G) B) and E)

Question 8

Maltese is a general partner who would like to add Penton to the partnership as a limited partner. In regard to adding Penton, which of the following is true?

Accepted Answer

A)   A limited liability company once set cannot add another limited partner only general partners may be added.
B)   Only the limited partners must agree to add Penton.
C)   Only the general partners must agree to add Penton.
D)   A general partner who wants to add a partner must have the consent of all partners in the limited partnership
E)   A limited liability company is set by statute, and if Penton exceeds the statutory maximum for partners, he cannot be added.F) D) and E)
G) B) and E)

Question 9

Which statement is correct 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) B) and E)
G) C) and D)

Question 10

In the case of a limited partnership, if the partners do not sign or do not file the certificate of limited partnership with the secretary of state, the limited partners will not receive limited liability.

Accepted Answer

A) True 
 B)False

Question 11

In India there are several grounds for dissolution of a firm, which of the following is not one of them?

Accepted Answer

A)   agreement by all partners
B)   dissolution by notice
C)   compulsory dissolution
D)   dissolution by the court
E)   governmental intervention in the partnershipF) A) and C)
G) C) and D)

Question 12

After dissolution, the remaining partners have a right to continue the partnership as long as the partner that is leaving agrees to the continuation.

Accepted Answer

A) True 
 B)False

Question 13

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 B)
G) A) and C)

Question 14

[Drone Debacle] Bruno and Martin run Skyview, LLC, a drone company that takes aerial photographs. After an accident with the drone, Bruno tells Martin that he does not want to be involved in management any longer. Martin tells Bruno that if he stops participating in management, they will no longer be protected by the limited liability of an LLC. Bruno says that if there is a lawsuit, they are both equally liable. Martin replies that if Bruno wants, he could be a limited LLC member and then he won't have a say in the company.
-Is Bruno correct that they would both be equally liable?

Accepted Answer

A)   Bruno is incorrect, they are liable to the extent of the loans, if any, that they executed on behalf of the LLC.
B)   Bruno is incorrect, they are liable to the extent of their investment.
C)   Bruno is incorrect, they are liable to the extent of their participation in management.
D)   Bruno is incorrect, they are liable to the extent of the statutory percentage based on a calculation of risk.
E)   Bruno is correct.F) A) and B)
G) C) and D)

Question 15

Which of the following is true in regard to the Uniform Limited Liability Company Act?

Accepted Answer

A)   Limited liability companies must follow the act completely in order to be recognized on a national level.
B)   Because LLCs are relatively new, not many states have accepted the Uniform Limited Liability Company Act.
C)   Limited liability companies can choose to follow the Act or not, however to get federal tax breaks, LLCs must follow the Act.
D)   The Uniform Limited Liability Company Act sets out the parameters for doing business on the internet.
E)   Limited liability companies are treated the same as limited partnerships under the Act.F) None of the above
G) A) and E)

Question 16

[Big Spender] Ryan was a partner in ZYX law firm. He decided to withdraw from the partnership because he wanted to retire early in Costa Rica. The partnership agreement of ZYX law firm did not specify the objective or duration of the partnership. Although Ryan gave proper notice, the other partners claimed that he had no right to withdraw. Ryan 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, Ryan 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's account. Ryan just smiled when Joe, the manager at the store, told Ryan that he really appreciated the law firm's business. The next day Ryan headed for Costa Rica and cannot be located. Joe later requests that ZYX firm pay the bill for Ryan's purchases. The law firm, whose members had decided to continue the partnership after the dissolution resulting from Ryan's resignation, refused on the basis that Ryan had no authority to make the purchases. Joe says that he did not know that and that he expects to be paid immediately.
-ZYX law firm was what type of partnership?

Accepted Answer

A)   A partnership at will
B)   An equitable partnership
C)   An absolute partnership
D)   A terminable partnership
E)   An agency partnershipF) A) and E)
G) B) and D)

Question 17

A(n)  ________ does not specify the objective or duration of the partnership in the partnership agreement.

Accepted Answer

A)   partnership at will
B)   partnership at sufferance
C)   intermediary partnership
D)   quasi partnership
E)   unqualified partnershipF) B) and C)
G) A) and E)

Question 18

Which stage(s)  must be completed before a partnership is considered completely terminated?

Accepted Answer

A)   Dissolution only
B)   Winding up only
C)   Dissolution and release of claims, but not winding up
D)   Release of claims and winding up, but not dissolution
E)   Dissolution and winding up, but not release of claimsF) D) and E)
G) B) and D)

Question 19

During the dissolution of a partnership that will be continued by the remaining partners, 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 C)
G) A) and D)

Question 20

After dissolution of a partnership, any partners who continue to do business cannot use the partnership's name.

Accepted Answer

A) True 
 B)False

Exam 37: Partnerships: Termination and Limited Partnerships

After dissolution, the remaining partners have a right to continue the partnership as long as the partner that is leaving agrees to the continuation.

Correct Answer
verified

The winding-up stage in the termination of a partnership is complete when which of the following happens?

Correct Answer
verified

After dissolution of a partnership, any partners who continue to do business cannot use the partnership's name.

Correct Answer
verified

Which of the following is true in regard to the Uniform Limited Liability Company Act?

Correct Answer
verified

Correct Answer
verified

Which statement is correct regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

Correct Answer
verified

Correct Answer
verified

If, upon dissolution of a partnership, liabilities of the partnership are greater than the liquidated assets of the partnership, which of the following occurs?

Correct Answer
verified

If a limited partnership is dissolved, the order in which the limited partnership's assets are distributed is as follows:

Correct Answer
verified

Which of the following is true about an LLC?

Correct Answer
verified

When a partner dies, the partnership is terminated by an act of the court.

Correct Answer
verified

Correct Answer
verified

In the case of a limited partnership, if the partners do not sign or do not file the certificate of limited partnership with the secretary of state, the limited partners will not receive limited liability.

Correct Answer
verified

Which of the following helps govern and guide limited partnerships?

Correct Answer
verified

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

Correct Answer
verified

Which stage(s) must be completed before a partnership is considered completely terminated?

Correct Answer
verified

In India there are several grounds for dissolution of a firm, which of the following is not one of them?

Correct Answer
verified

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
verified

Maltese is a general partner who would like to add Penton to the partnership as a limited partner. In regard to adding Penton, which of the following is true?

Correct Answer
verified

A(n) ________ does not specify the objective or duration of the partnership in the partnership agreement.

Correct Answer
verified

Exam 37: Partnerships: Termination and Limited Partnerships

After dissolution, the remaining partners have a right to continue the partnership as long as the partner that is leaving agrees to the continuation.

Correct AnswerverifiedShow Answer

The winding-up stage in the termination of a partnership is complete when which of the following happens?

Correct AnswerverifiedShow Answer

After dissolution of a partnership, any partners who continue to do business cannot use the partnership's name.

Correct AnswerverifiedShow Answer

Which of the following is true in regard to the Uniform Limited Liability Company Act?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which statement is correct regarding a partner's actual authority to bind a partnership once a partnership is dissolved?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If, upon dissolution of a partnership, liabilities of the partnership are greater than the liquidated assets of the partnership, which of the following occurs?

Correct AnswerverifiedShow Answer

If a limited partnership is dissolved, the order in which the limited partnership's assets are distributed is as follows:

Correct AnswerverifiedShow Answer

Which of the following is true about an LLC?

Correct AnswerverifiedShow Answer

When a partner dies, the partnership is terminated by an act of the court.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the case of a limited partnership, if the partners do not sign or do not file the certificate of limited partnership with the secretary of state, the limited partners will not receive limited liability.

Correct AnswerverifiedShow Answer

Which of the following helps govern and guide limited partnerships?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which stage(s) must be completed before a partnership is considered completely terminated?

Correct AnswerverifiedShow Answer

In India there are several grounds for dissolution of a firm, which of the following is not one of them?

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

Maltese is a general partner who would like to add Penton to the partnership as a limited partner. In regard to adding Penton, which of the following is true?

Correct AnswerverifiedShow Answer

A(n) ________ does not specify the objective or duration of the partnership in the partnership agreement.

Correct AnswerverifiedShow Answer

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