Which of the following is not an essential element of a general partnership?

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a

An equal right to be involved in the management of the business

b

A joint ownership of the business

c

A sharing of profits and losses

d

A written partnership agreement between the parties

Bruce is an employee in Will's business. However, Will often introduces Bruce as "my business colleague." If a third-party reasonably believed that Bruce were Will's partner and carries on a business transaction under this assumption, could a court possibly find that there is a partnership between Bruce and Will?

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a

No, unless there is a written partnership agreement between Bruce and Will.

b

No, unless there has been something filed making Bruce a partner.

c

Yes, because there could be a partnership by estoppel.

d

Yes, because there could be a partnership by implication.

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Partnership Liability

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Heidi and Isabel are in a general partnership where Heidi owns a 25% interest. While in the course and scope of employment, one of the partnership's employees injures a customer, causing substantial injuries. The partnership does not have the assets to cover the injuries. If the customer were to sue Heidi, how much of any resulting judgment could the customer recover from Heidi?

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a

0%

b

25%

c

50%

d

100%

The Solar Flare Partnership has a partnership agreement that requires a majority of the partners to agree to hire a general manager for the business. Despite this, Squall offers Yuna a job as general manager. Is Squall's offer to Yuna binding on the partnership?

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a

Yes, unless Yuna knew that Squall had no authority to make the offer.

b

Yes, unless the agreement limiting Squall's authority is in writing.

c

No, because Squall clearly exceeded his authority by offering the position to Yuna.

d

No, unless Squall offered Yuna the position in writing.

Mark and Gary are in a general partnership. Mark contributes $10,000 in capital, while Gary contributes $20,000 in capital. They profit $90,000 through Mark's efforts. Absent a partnership agreement, how much of that profit should be distributed to Gary?

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Which of the following occurs when a general partnership is converted to a limited liability partnership (LLP)?

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a

A partner is no longer personally liable for their own torts.

b

Partners avoid personal liability for the malpractice of other partners.

c

Profits and losses become proportional to contributions.

d

There is no longer an equal say in management.

Which of the following is true about manager-managed LLCs?

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a

LLCs are manager-managed unless specified in the articles of organization.

b

Only managers, not members, owe fiduciary duties to the LLC.

c

Managers have unlimited personal liability like general partners.

d

Managers must be members of the LLC.

Unless the operating agreement states otherwise, what happens to an LLC when a member dissociates?

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a

The LLC will continue to operate if there is at least one other member.

b

The articles of organization must be refiled to continue the LLC.

c

The LLC dissolves unless there is the unanimous consent of the other members to continue.

d

The LLC moves toward the process of dissolution and winding up.

When it comes to taxation, what advantage does LLCs have over other business entities?

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a

All profits are taxed at the LLC level; there is no taxation when earnings are distributed to members.

b

LLCs have access to deductions that partnerships or corporations do not have.

c

LLCs may choose to be taxed as a partnership or as a corporation.

d

Tax rates for LLCs are lower than t