BUS 250 CHAPTER 32 QUESTIONS WITH VERIFIED
ANSWERS
forming a partnership - Answers - In determining whether a partnership exists, court will
consider whether the parties:
Share the profits of the business,
Share the losses of the business,
Share management of the business, and
Have an oral or written partnership agreement
Partnership By Estoppel - Answers - If someone is not a member of a partnership, she
will nonetheless be considered a partner by estoppel if
she tells other people she is a partner or allows other people to say, without
contradiction, that she is a partner;
a third party relies on this assertion; and
the third party suffers harm.
partners as agnets - Answers - Every partner is an agent of the partnership for the
purpose of its business. A partnership is responsible for the intentional and negligent
torts of a partner that occur in the ordinary course of the partnership's business or with
the actual, implied or apparent authority of the other partners
A Partner's Liability for the Debts of the Partnership - Answers - All partners are
personally liable for all debts of the partnership incurred while they were members of the
partnership. Partners have joint and several liability for partnership obligations. A
partner's liability for debts incurred before she became a partner is limited to her
investment in the partnership.
Default Rules Among Partners - Answers - Unless they agree otherwise, partners:
Share profits equally,
Share losses according to their share of profits,
Are not entitled to any payment beyond their share of profits, even if they perform work
for the partnership,
Have no right to use or sell specific partnership property except for the benefit of the
partnership,
Each have an equal vote, regardless of their contributions to the partnership, and
Each have an equal right in the management of the business.
Transferring a Partnership Share - Answers - Without the approval of the other partners,
a partner cannot sell her share. She can only transfer the right to receive profits and
, losses. A new partner can be admitted to a partnership only by unanimous consent of
the other partners.
creditor rights - Answers - Creditors can attach partnership profits through a charging
order
A Partner's Liability to the Partnership - Answers - Partners are liable to the partnership
for any damages resulting from their gross negligence, reckless conduct, intentional
misconduct, or a knowing violation of the law. Partners are not liable to the partnership
for ordinary negligence.
outside earnings - Answers - Each partner must turn over to the partnership all earnings
from any activity that is related to the partnership's business.
Partnership Opportunity - Answers - A partner may not take an opportunity away from
the partnership unless the other partners consent.
conflict of interest - Answers - A partner has a conflict of interest whenever the
partnership does business with him, a member of his family, or a business partly or fully
owned by him. The partner must turn all profits over to the partnership.
A Partner's Obligation to the Partnership - Answers - Partners have an obligation of
good faith and fair dealing to each other and to the partnership.
dissociation - Answers - A dissociation occurs when a partner leaves the partnership.
After Dissociation - Answers - When one or more partners dissociate, the partnership
can either buy out the departing partner(s) and continue in business or wind up the
business and terminate the partnership.
rights to withdrawl - Answers - A partner always has the power to leave a partnership
but may not have the right.
partnership at will - Answers - If partners do not have an agreement about the duration
of their partnership, it is called a partnership at will, and any of them can leave at any
time for any reason.
term partnership - Answers - With a term partnership, the partners have agreed in
advance how long the partnership will last.
dissociated partner - Answers - A dissociated partner is liable to outsiders for debts
incurred during her term as a partner, but the partnership must indemnify her for these
debts. A dissociated partner is liable for the debts of the partnership incurred within two
years after she leaves, but only if the creditor reasonably believes she is still a partner.
The partnership must indemnify her for these debts.
ANSWERS
forming a partnership - Answers - In determining whether a partnership exists, court will
consider whether the parties:
Share the profits of the business,
Share the losses of the business,
Share management of the business, and
Have an oral or written partnership agreement
Partnership By Estoppel - Answers - If someone is not a member of a partnership, she
will nonetheless be considered a partner by estoppel if
she tells other people she is a partner or allows other people to say, without
contradiction, that she is a partner;
a third party relies on this assertion; and
the third party suffers harm.
partners as agnets - Answers - Every partner is an agent of the partnership for the
purpose of its business. A partnership is responsible for the intentional and negligent
torts of a partner that occur in the ordinary course of the partnership's business or with
the actual, implied or apparent authority of the other partners
A Partner's Liability for the Debts of the Partnership - Answers - All partners are
personally liable for all debts of the partnership incurred while they were members of the
partnership. Partners have joint and several liability for partnership obligations. A
partner's liability for debts incurred before she became a partner is limited to her
investment in the partnership.
Default Rules Among Partners - Answers - Unless they agree otherwise, partners:
Share profits equally,
Share losses according to their share of profits,
Are not entitled to any payment beyond their share of profits, even if they perform work
for the partnership,
Have no right to use or sell specific partnership property except for the benefit of the
partnership,
Each have an equal vote, regardless of their contributions to the partnership, and
Each have an equal right in the management of the business.
Transferring a Partnership Share - Answers - Without the approval of the other partners,
a partner cannot sell her share. She can only transfer the right to receive profits and
, losses. A new partner can be admitted to a partnership only by unanimous consent of
the other partners.
creditor rights - Answers - Creditors can attach partnership profits through a charging
order
A Partner's Liability to the Partnership - Answers - Partners are liable to the partnership
for any damages resulting from their gross negligence, reckless conduct, intentional
misconduct, or a knowing violation of the law. Partners are not liable to the partnership
for ordinary negligence.
outside earnings - Answers - Each partner must turn over to the partnership all earnings
from any activity that is related to the partnership's business.
Partnership Opportunity - Answers - A partner may not take an opportunity away from
the partnership unless the other partners consent.
conflict of interest - Answers - A partner has a conflict of interest whenever the
partnership does business with him, a member of his family, or a business partly or fully
owned by him. The partner must turn all profits over to the partnership.
A Partner's Obligation to the Partnership - Answers - Partners have an obligation of
good faith and fair dealing to each other and to the partnership.
dissociation - Answers - A dissociation occurs when a partner leaves the partnership.
After Dissociation - Answers - When one or more partners dissociate, the partnership
can either buy out the departing partner(s) and continue in business or wind up the
business and terminate the partnership.
rights to withdrawl - Answers - A partner always has the power to leave a partnership
but may not have the right.
partnership at will - Answers - If partners do not have an agreement about the duration
of their partnership, it is called a partnership at will, and any of them can leave at any
time for any reason.
term partnership - Answers - With a term partnership, the partners have agreed in
advance how long the partnership will last.
dissociated partner - Answers - A dissociated partner is liable to outsiders for debts
incurred during her term as a partner, but the partnership must indemnify her for these
debts. A dissociated partner is liable for the debts of the partnership incurred within two
years after she leaves, but only if the creditor reasonably believes she is still a partner.
The partnership must indemnify her for these debts.
