BUL 5810 ACTUAL FINALS ANSWERS AND
QUESTIONS SET A+
✔✔The choice of the most appropriate form of business enterprise cannot be
determined without
considering the particular circumstances of the owners. - ✔✔true
✔✔A judicial lien against a partner's transferable interest in a partnership is known as
a(n):
(A) legal aggregate.
(B) delegation of assets.
(C) charging order.
(D) assignment. - ✔✔(C) charging order.
✔✔A partner who has no right to participate in control of the business and who has
limited liability
is a:
(A) general partner.
(B) nominal partner.
(C) secret partner.
(D) limited partner. - ✔✔(D) limited partner.
✔✔Which of the following is NOT an advantage of a partnership?
(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. - ✔✔(B)
Each partner has limited liability.
✔✔A distinguishing characteristic of a business trust is that:
(A) the trust estate is devoted to the conduct of a business.
,(B) each beneficiary must have the consent of all the other beneficiaries in order to sell
or transfer
his interest in the trust.
(C) the trustees and beneficiaries share the functions of management and control.
(D) the trust can be established with no formality. - ✔✔(A) the trust estate is devoted to
the conduct of a bus
✔✔Which of the following is not true regarding a partnership name?
(A) The name selected may not be the same as or deceptively similar to the name of
any other
existing business.
(B) It may be a fictitious name.
(C) It may not be likely to indicate to the public that it is a corporation.
(D) It may not be the name of any one of the partners. - ✔✔(D) It may not be the name
of any one of the partner
✔✔Arthur, Betty, and Clara each inherit an undivided one-third of an apartment
complex. Instead of
selling it, they decide to continue to operate it for the next few years as a sideline to
their other
occupations just to see if they can earn some extra money. What are they?
(A) A partnership
(B) Co-owners only
(C) A corporation
(D) Tenants in common - ✔✔(A) A partnership
✔✔Co-ownership of the means or instrumentality of accomplishing a single business
transaction or
a limited series of transactions ordinarily results in a:
(A) partnership.
(B) joint venture.
(C) corporation.
(D) R & D partnership. - ✔✔(B) joint venture.
✔✔Which of the following would lack the capacity to become a partner?
(A) A business trust
(B) A retired person over 74
(C) A corporation
(D) None of these lack capacity; any of them could become a partner. - ✔✔(D) None of
these lack capacity; any of them could become a partner.
✔✔The RUPA treats a partnership as a legal entity in all but which of the following
respects?
(A) Title to partnership property
(B) Continuity of existence
,(C) Legal actions by and against the partnership
(D) Unlimited liability for partnership obligations - ✔✔(D) Unlimited liability for
partnership obligations
✔✔In which of the following situations would the persons be partners?
(A) Aisha and Brantley jointly own shares of the capital stock of a corporation, have a
joint bank
account, and have purchased real estate as tenants in common. They share the
dividends on the
stock, the interest on the bank account, and the net proceeds from the lease of the real
estate.
(B) Aisha and Brantley buy and sell real estate continuously over a five-year period,
conducting a
business of trading in real estate. They do not consider themselves partners.
(C) Aisha, Brantley, and Chenille each inherit an undivided one-third interest in a
restaurant and
decide to sell it because the market is such that they are assured a good price.
(D) Aisha and Chenille take care of each other's children while the other is working. -
✔✔(B) Aisha and Brantley buy and sell real estate continuously over a five-year period,
conducting a
business of trading in real estate. They do not consider themselves partners.
✔✔In which of the following situations will the inference of the existence of a partnership
be drawn
from the receipt of profits of a business?
(A) Where payments of a debt are made to a creditor in installments from the profits of
the
partnership
(B) Where wages are paid to an employee who is not also an owner
(C) Where an annuity is paid to the widow of a deceased partner from partnership
profits
(D) Neither the creditor, the employee, nor the widow in these situations will be
considered a
partner under the guidelines in the RUPA. - ✔✔(D) Neither the creditor, the employee,
nor the widow in these situations will be considered a
partner under the guidelines in the RUPA.
✔✔A ____ is an unincorporated business association consisting of at least one general
partner and at
least one limited partner.
(A) joint venture
(B) limited liability company
(C) limited liability partnership
(D) limited partnership - ✔✔(D) limited partnership
, ✔✔Under the RUPA, a loan from a partner to the partnership is treated the same as
loans of a
person not a partner, subject to:
(A) fraudulent transfer law.
(B) the law of avoidable preferences under the Bankruptcy Act.
(C) general debtor-creditor law.
(D) All of these. - ✔✔(D) All of these.
✔✔Juan, a partner in the Bell Partnership, in violation of a specific term in the
partnership
agreement restricting the extension of credit of more than $5,000 without the written
consent of all
the partners, extends credit of $6,500 to Brittany. Juan has violated the duty of:
(A) obedience, and he can be held personally liable to his partners for any unpaid
portion of the
$6,500.
(B) obedience, but he cannot be held personally liable for the unpaid portion of the debt.
(C) care because he owed the partnership a duty to act in good faith.
(D) loyalty, and he is therefore personally liable to the partnership for $6,500. - ✔✔(A)
obedience, and he can be held personally liable to his partners for any unpaid portion of
the
$6,500.
✔✔Which of the following is true of a partner's fiduciary duty?
(A) The RUPA's provision regarding the fiduciary duty is not exclusive, but leaves
further
development of the fiduciary duty of partners to the common law of agency.
(B) The RUPA provides that a partner does not violate the duty of loyalty merely
because the
partner's conduct furthers the partner's own interest.
(C) The fiduciary duty extends to the formation of the partnership, even when the parties
are
negotiating at arm's length.
(D) The duty not to compete continues for a reasonable time after dissociation. - ✔✔(B)
The RUPA provides that a partner does not violate the duty of loyalty merely because
the
partner's conduct furthers the partner's own interest.
✔✔Terry and Ernest agree to become partners in advertising and promoting the Midway
Fair to be
held three years hence. If they agree orally, will the partnership agreement be
enforceable?
(A) Yes, since no writing is required
(B) Yes, as long as a division of profits is achieved
(C) No, because the venture cannot be performed within one year
QUESTIONS SET A+
✔✔The choice of the most appropriate form of business enterprise cannot be
determined without
considering the particular circumstances of the owners. - ✔✔true
✔✔A judicial lien against a partner's transferable interest in a partnership is known as
a(n):
(A) legal aggregate.
(B) delegation of assets.
(C) charging order.
(D) assignment. - ✔✔(C) charging order.
✔✔A partner who has no right to participate in control of the business and who has
limited liability
is a:
(A) general partner.
(B) nominal partner.
(C) secret partner.
(D) limited partner. - ✔✔(D) limited partner.
✔✔Which of the following is NOT an advantage of a partnership?
(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. - ✔✔(B)
Each partner has limited liability.
✔✔A distinguishing characteristic of a business trust is that:
(A) the trust estate is devoted to the conduct of a business.
,(B) each beneficiary must have the consent of all the other beneficiaries in order to sell
or transfer
his interest in the trust.
(C) the trustees and beneficiaries share the functions of management and control.
(D) the trust can be established with no formality. - ✔✔(A) the trust estate is devoted to
the conduct of a bus
✔✔Which of the following is not true regarding a partnership name?
(A) The name selected may not be the same as or deceptively similar to the name of
any other
existing business.
(B) It may be a fictitious name.
(C) It may not be likely to indicate to the public that it is a corporation.
(D) It may not be the name of any one of the partners. - ✔✔(D) It may not be the name
of any one of the partner
✔✔Arthur, Betty, and Clara each inherit an undivided one-third of an apartment
complex. Instead of
selling it, they decide to continue to operate it for the next few years as a sideline to
their other
occupations just to see if they can earn some extra money. What are they?
(A) A partnership
(B) Co-owners only
(C) A corporation
(D) Tenants in common - ✔✔(A) A partnership
✔✔Co-ownership of the means or instrumentality of accomplishing a single business
transaction or
a limited series of transactions ordinarily results in a:
(A) partnership.
(B) joint venture.
(C) corporation.
(D) R & D partnership. - ✔✔(B) joint venture.
✔✔Which of the following would lack the capacity to become a partner?
(A) A business trust
(B) A retired person over 74
(C) A corporation
(D) None of these lack capacity; any of them could become a partner. - ✔✔(D) None of
these lack capacity; any of them could become a partner.
✔✔The RUPA treats a partnership as a legal entity in all but which of the following
respects?
(A) Title to partnership property
(B) Continuity of existence
,(C) Legal actions by and against the partnership
(D) Unlimited liability for partnership obligations - ✔✔(D) Unlimited liability for
partnership obligations
✔✔In which of the following situations would the persons be partners?
(A) Aisha and Brantley jointly own shares of the capital stock of a corporation, have a
joint bank
account, and have purchased real estate as tenants in common. They share the
dividends on the
stock, the interest on the bank account, and the net proceeds from the lease of the real
estate.
(B) Aisha and Brantley buy and sell real estate continuously over a five-year period,
conducting a
business of trading in real estate. They do not consider themselves partners.
(C) Aisha, Brantley, and Chenille each inherit an undivided one-third interest in a
restaurant and
decide to sell it because the market is such that they are assured a good price.
(D) Aisha and Chenille take care of each other's children while the other is working. -
✔✔(B) Aisha and Brantley buy and sell real estate continuously over a five-year period,
conducting a
business of trading in real estate. They do not consider themselves partners.
✔✔In which of the following situations will the inference of the existence of a partnership
be drawn
from the receipt of profits of a business?
(A) Where payments of a debt are made to a creditor in installments from the profits of
the
partnership
(B) Where wages are paid to an employee who is not also an owner
(C) Where an annuity is paid to the widow of a deceased partner from partnership
profits
(D) Neither the creditor, the employee, nor the widow in these situations will be
considered a
partner under the guidelines in the RUPA. - ✔✔(D) Neither the creditor, the employee,
nor the widow in these situations will be considered a
partner under the guidelines in the RUPA.
✔✔A ____ is an unincorporated business association consisting of at least one general
partner and at
least one limited partner.
(A) joint venture
(B) limited liability company
(C) limited liability partnership
(D) limited partnership - ✔✔(D) limited partnership
, ✔✔Under the RUPA, a loan from a partner to the partnership is treated the same as
loans of a
person not a partner, subject to:
(A) fraudulent transfer law.
(B) the law of avoidable preferences under the Bankruptcy Act.
(C) general debtor-creditor law.
(D) All of these. - ✔✔(D) All of these.
✔✔Juan, a partner in the Bell Partnership, in violation of a specific term in the
partnership
agreement restricting the extension of credit of more than $5,000 without the written
consent of all
the partners, extends credit of $6,500 to Brittany. Juan has violated the duty of:
(A) obedience, and he can be held personally liable to his partners for any unpaid
portion of the
$6,500.
(B) obedience, but he cannot be held personally liable for the unpaid portion of the debt.
(C) care because he owed the partnership a duty to act in good faith.
(D) loyalty, and he is therefore personally liable to the partnership for $6,500. - ✔✔(A)
obedience, and he can be held personally liable to his partners for any unpaid portion of
the
$6,500.
✔✔Which of the following is true of a partner's fiduciary duty?
(A) The RUPA's provision regarding the fiduciary duty is not exclusive, but leaves
further
development of the fiduciary duty of partners to the common law of agency.
(B) The RUPA provides that a partner does not violate the duty of loyalty merely
because the
partner's conduct furthers the partner's own interest.
(C) The fiduciary duty extends to the formation of the partnership, even when the parties
are
negotiating at arm's length.
(D) The duty not to compete continues for a reasonable time after dissociation. - ✔✔(B)
The RUPA provides that a partner does not violate the duty of loyalty merely because
the
partner's conduct furthers the partner's own interest.
✔✔Terry and Ernest agree to become partners in advertising and promoting the Midway
Fair to be
held three years hence. If they agree orally, will the partnership agreement be
enforceable?
(A) Yes, since no writing is required
(B) Yes, as long as a division of profits is achieved
(C) No, because the venture cannot be performed within one year
