Question 1

States have authorized the formation of limited liability companies.

Accepted Answer

A) True 
 B)False

Question 2

A charitable organization cannot be formed as a partnership.

Accepted Answer

A) True 
 B)False

Question 3

Ed, Vivian, and Pablo enter a partnership. Identify the source of the duties among the partners and whether these can be waived or varied. Name the principal duties Ed, Vivian, and Pablo have to each other and to the partnership.

Accepted Answer

The partnership agreement and statutes a...

Question 4

Partners may elect whether or not the partnership will be taxed as a separate entity.

Accepted Answer

A) True 
 B)False

Question 5

A __________ is an unincorporated business association consisting of at least one general partner and at least one limited partner.

Accepted Answer

A)   joint venture
B)   limited liability company
C)   limited liability partnership
D)   limited partnershipE) A) and B)
F) B) and C)

Question 6

A partner's transferable interest is subject to the claims of that partner's creditors who may obtain a judicial lien known as a(n)  __________ against the partner's transferable interest.

Accepted Answer

A)   foreclosure
B)   redemption
C)   charging order
D)   None of these.E) A) and B)
F) All of the above

Question 7

A judicial lien against a partner's transferable interest in a partnership is known as:

Accepted Answer

A)   a legal aggregate.
B)   a delegation of assets.
C)   a charging order.
D)   an assignment.E) A) and D)
F) None of the above

Question 8

The RUPA cannot be modified by agreement of the partners to a partnership. Its provisions must be strictly followed in any partnership agreement.

Accepted Answer

A) True 
 B)False

Question 9

Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in order to be enforceable in the courts.

Accepted Answer

A) True 
 B)False

Question 10

In choosing the form in which to conduct business, if ease of formation is the primary concern, the owners would choose a:

Accepted Answer

A)   corporation.
B)   limited liability partnership.
C)   limited partnership.
D)   general partnership.E) B) and C)
F) A) and D)

Question 11

Which of the following is the most convincing evidence of a partnership arrangement?

Accepted Answer

A)   Two or more persons are co-owners of property used in a business.
B)   Two or more persons have a written agreement regarding a fundraiser for charity.
C)   Two or more persons carry on a business for profit, but they have no formal agreement.
D)   Two person share a joint savings account in which they deposit money and share the interest.E) A) and B)
F) None of the above

Question 12

General partnerships are used frequently in finance, insurance, accounting, real estate, law, and other services.

Accepted Answer

A) True 
 B)False

Question 13

A partner's fiduciary duty under the UPA differs in some respects from that under the RUPA.

Accepted Answer

A) True 
 B)False

Question 14

A general partnership is formed without any formality and no documents need be filed with the state.

Accepted Answer

A) True 
 B)False

Question 15

The law establishes a test for determining whether a partnership has been formed. The test includes which of the following?

Accepted Answer

A)   An association of two or more persons.
B)   Conducting a business not necessarily for profit.
C)   That the partnership agreement is filed with the Secretary of State.
D)   The sharing of gross returns.E) All of the above
F) C) and D)

Question 16

No minimum amount of capitalization is necessary before a partnership may commence business.

Accepted Answer

A) True 
 B)False

Question 17

The type of business enterprise with the most entities is the sole proprietorship, followed by the corporation; but the type of business enterprise with the greatest total revenue generation per year is the corporation.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is correct with regard to partnership property?

Accepted Answer

A)   Like partnership capital, it is a fixed amount set forth in the articles of partnership.
B)   Under the RUPA, there is a rebuttable presumption that unless a contrary intention appears, property acquired with partnership funds is partnership property.
C)   The RUPA sets forth two irrebuttable presumptions that apply when the partners did not express their intent, one of which is that property acquired in the name of one of the partners without an indication of her capacity as a partner and without use of partnership funds is presumed to be that partner's separate property.
D)   If there is no express agreement whether property owned by a partner before formation of the partnership and used in the partnership business is an asset of the partnership, the fact that taxes, liens, and expenses have been paid by the partnership is irrelevant.E) All of the above
F) C) and D)

Question 19

Which of the following is NOT an advantage of a partnership?

Accepted Answer

A)   Partners' income taxes may be less than the income taxes would be on a corporation.
B)   Each partner has limited liability.
C)   It is possible to bring together more managerial skills than in a sole proprietorship.
D)   It is possible to bring together more capital than in a sole proprietorship.E) A) and B)
F) B) and D)

Question 20

General partners differ from limited partners only in the amount of input they have in partnership decisions.

Accepted Answer

A) True 
 B)False

Exam 30: Formation and Internal Relations of General Partnerships

A __________ is an unincorporated business association consisting of at least one general partner and at least one limited partner.

Correct AnswerverifiedShow Answer

States have authorized the formation of limited liability companies.

Correct AnswerverifiedShow Answer

Which of the following is the most convincing evidence of a partnership arrangement?

Correct AnswerverifiedShow Answer

Which of the following is NOT an advantage of a partnership?

Correct AnswerverifiedShow Answer

Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in order to be enforceable in the courts.

Correct AnswerverifiedShow Answer

Partners may elect whether or not the partnership will be taxed as a separate entity.

Correct AnswerverifiedShow Answer

The law establishes a test for determining whether a partnership has been formed. The test includes which of the following?

Correct AnswerverifiedShow Answer

A partner's transferable interest is subject to the claims of that partner's creditors who may obtain a judicial lien known as a(n) __________ against the partner's transferable interest.

Correct AnswerverifiedShow Answer

No minimum amount of capitalization is necessary before a partnership may commence business.

Correct AnswerverifiedShow Answer

General partners differ from limited partners only in the amount of input they have in partnership decisions.

Correct AnswerverifiedShow Answer

The RUPA cannot be modified by agreement of the partners to a partnership. Its provisions must be strictly followed in any partnership agreement.

Correct AnswerverifiedShow Answer

General partnerships are used frequently in finance, insurance, accounting, real estate, law, and other services.

Correct AnswerverifiedShow Answer

The type of business enterprise with the most entities is the sole proprietorship, followed by the corporation; but the type of business enterprise with the greatest total revenue generation per year is the corporation.

Correct AnswerverifiedShow Answer

A general partnership is formed without any formality and no documents need be filed with the state.

Correct AnswerverifiedShow Answer

In choosing the form in which to conduct business, if ease of formation is the primary concern, the owners would choose a:

Correct AnswerverifiedShow Answer

Which of the following is correct with regard to partnership property?

Correct AnswerverifiedShow Answer

A partner's fiduciary duty under the UPA differs in some respects from that under the RUPA.

Correct AnswerverifiedShow Answer

Ed, Vivian, and Pablo enter a partnership. Identify the source of the duties among the partners and whether these can be waived or varied. Name the principal duties Ed, Vivian, and Pablo have to each other and to the partnership.

Correct AnswerverifiedThe partnership agreement and statutes a...View AnswerShow Answer

A judicial lien against a partner's transferable interest in a partnership is known as:

Correct AnswerverifiedShow Answer

A charitable organization cannot be formed as a partnership.

Correct AnswerverifiedShow Answer

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The partnership agreement and statutes a...
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