Timothy and Holly are partners in a printing shop. If Denver obtains a judgment against Timothy for injuring Denver while Timothy was on partnership business, Denver must try to collect from the partnership before going after Timothy's personal assets.
The common law of agency applies to relations between partners and it also applies to relations between partners and third parties.
The rules set out in the UPA defining the liability of partners to outsiders can be modified by the partnership agreement.
Doyle contributed $10,000 to become a partner in the existing partnership of R & Z Heating. If Albert wins a judgment for $25,000 against R & Z on a claim that was incurred before Doyle became a partner, Doyle shares joint and several liability with his new partners for the whole obligation.
Alicia and Ted have a written agreement wherein they will share the losses of their joint business. This agreement is strong evidence they are partners.
Brock and Heidi agree to jointly run the hospital's fundraiser. Even if they don't have a formal, written agreement, they have formed a partnership.
Kyle, Pedro, and Madeline form a partnership. There is no agreement as to the duration of the partnership. The partnership is a partnership at will.
The dissolution of a partnership means the same as its termination.
Jeremiah was a partner in a partnership, but quits. Dissociation has occurred.
A partner always has the right, though not the power, to leave a partnership.
A partnership can only be held liable for the partners' authorized acts.
Elion was a partner in a partnership. Elion's death is considered a wrongful dissociation.
A partnership is liable for both the negligent and intentional acts of a partner if the acts were committed within the ordinary course of the partnership's business.
Li was involved in the winding up of her partnership. Li is not entitled to compensation for her work since she is a partner.
Li, a partner, was involved in the winding up of the partnership. A lucrative business opportunity for the partnership arises. Li does not have the right to take on this new business.
Charles and Becky are partners. If they have a disagreement, the Uniform Partnership Act will govern their respective rights with each other:
only if they do not have a written partnership agreement that addresses the issue of dispute.
A partnership is the association of two or more persons to carry on as co-owners a business for profit. The association:
means a voluntary relationship between the persons.
Jackie and Robert own an apartment building as partners. Cyndi, one of their tenants, gives Robert written notice she will be moving out at the end of the following month. Robert did not tell Jackie that Cyndi was moving. Has Cyndi properly given notice to the partnership?
Yes. Notice to Robert was notice to the partnership.
Which of the following events occurs first with respect to the ending of a partnership?
Theresa and Bobbi bought a racehorse together. They agreed to share all expenses and split net profits equally. There was no agreement as to the duration of the partnership. After about a year, Bobbi decided she was tired of the racehorse business and left the partnership. Bobbi did not violate the partnership agreement. Theresa claims Bobbi's leaving was wrongful. Is Theresa correct?
No, in a partnership at will, a partner has the right to leave the partnership at any time.
Art and Alma made capital contributions of 60% and 40% respectively to their newly formed partnership, AA & Associates. They did not have a written partnership agreement. At the end of the first year, the partnership made a profit of which Alma now claims half. However, Art maintains he should receive 60%. Who is correct?
Alma, as the UPA provides that profits are split equally unless the partners agree otherwise.
Sandy, Ramon, and Bonnie were partners. Sandy dissociated from the partnership. Bonnie and Ramon decided to continue the business. When Sandy dissociated, there was a $50,000 debt owed to Great State Bank. Which statement is correct?
Sandy remains liable on the $50,000 debt owed to Great State Bank.
At what stage are the partnership debts paid and the proceeds distributed to
During winding up
A group of accounting alumni decided to hold a fund-raiser to establish a scholarship for an accounting student. This enterprise is:
If Kay, a partner in an auction business, has a personal creditor who is aggressive about collecting the debt:
the creditor can attach partnership profits by obtaining a charging order.
Kayla and Marshall formed a partnership. Marshall incurred a debt in the ordinary course of the partnership business. If the debt is not paid, the creditor may sue:
the partnership and the partners together or in separate lawsuits or in any combination.
Gary and Herman are partners in a lawn mower repair business in Ohio. While Gary is on vacation, visiting his sister in Georgia, his sister's neighbor has trouble with her mower and Gary fixes it for her. She insists on paying him. Gary:
must turn the money over to the partnership because he earned it doing the kind of work that the partnership does.
Judy believed that Ray and Don were partners in an automotive repair business. Ray and Don were not partners. Ray owned the business as a sole proprietor. Ray, however, allowed Don, his unemployed brother-in-law, to be around the business. When Judy was having her car repaired, Ray told her "my partner over there, Don, will give you a ride to work this morning so you can leave your car here. He will give you a ride back here after work and your car will be done." Judy allowed Don to drive her to work. While riding with Don, Don accidentally ran a stop light and caused an accident. Judy was hurt and claims that both Don and Ray are liable to her. Is she right?
Yes. This illustrates a partnership by estoppel.
Anne and Mike were winding up their partnership. Mike was approached by a person who wanted the partnership to do some work for him. Mike agreed that the partnership would do the work. Generally speaking, in such a situation:
Anne is liable unless she filed a statement of dissolution with the Secretary of State within 90 days of when Mike entered the contract.
Which of the following is a rightful dissociation?
A partner in a partnership at will serves notice that he intends to withdraw.
Which of the following would be evidence that two people intend to be partners?
All of the above are evidence of a partnership.
Lori and Dan own a small restaurant as partners. Dan works several hours a day cooking, waiting on tables, doing the books, and so forth. Dan believes he is entitled to be paid at least a standard wage for all his work since, at the present time, the part-time kitchen helpers earn more than he does! Lori claims Dan is not entitled to anything other than one-half the net profits. Is Lori right?
Yes, as there is no agreement between Lori and Dan allowing for either of them to be paid wages for work done at the restaurant.
Randy, Joan, and Arnie are partners. Their agreement did not address dissociation nor how long the partnership would last. Randy decided to leave the partnership. When Randy serves notice he intends to withdraw:
the partnership can either buy him out and continue in business or wind up the business and terminate the partnership.
Debbie is a partner with Adam and Marty. She sells her interest in the partnership to Craig. Which statement below is the most accurate?
Adam and Marty must approve the sale for Craig to become a full partner.
Dusty dissociated from a partnership. To protect himself from debts of the partnership after he leaves, Dusty should:
file a statement of dissociation with the Secretary of State.
Ending a partnership involves which of the following three steps?
Dissolution, winding up, and termination.
Nancy was a partner of a small business. She could see that the business was beginning to fail and that it was very unlikely it would recover. Not wanting to lose her investment, she asked that the court require the partnership to dissolve since she did not have a legal right to withdraw at that time. Does a court have the authority to order a partnership to dissolve?
Yes. A court can dissolve a partnership when it is convinced that the partnership is unlikely to succeed.
Astrid and Razi formed a partnership in which they agree to share profits 60 percent to Astrid and 40 percent to Razi. Losses will be shared:
60 percent to Astrid and 40 percent to Razi, unless otherwise agreed.
Max, Jenny, and Craig are partners. They have purchased an elegant Victorian home and converted it into an office for their partnership. Craig decides to use the partnership's office to host some evening parties. Craig has a sideline business of arranging expensive gatherings and charging each person a handsome price to attend these "elite" parties. When Max and Jenny find out what Craig is doing, they demand that he pay them for the use of the property. How much money, if any, is Craig required to pay the partnership?
He must turn over any profits he earned from this activity.