Florida Bar Exam – Partnerships
Midterm Questions Fully Solved.
Formation - Answer 2 or more persons carrying on a business for profit
Partnership Requirements - Answer 1. Person
2. Intent
3. Necessary Agreement
4. Extensive Activity
5. Profit Sharing test
1. Person - Answer individual or legal entity
Intent - Answer at least 2 persons intend to carry on a business for profit as co-owners
o Do NOT need specific intent to create a P
3. Necessary Agreement - Answer to conduct a for profit business as co-owners
o Can be implied by conduct or an oral agreement
o Written K is NOT required
Extensive Activity - Answer passive co-ownership of property is NOT a P
Profit-Sharing Test
o Rule - if there is profit sharing, presumed to be a P - Answer Exceptions:
• Rent
• Annuity
• Debt
• Wages
• Interest
• Goodwill - payment stemming from sale of business
, Nature of Partnership - Answer Separate legal entity - P may hold property and can sue/be
sued
Relationships Between Partner and Partnership
o Partner as Agent of P - Answer Partner can commit P to contracts w/ third parties
Fiduciary Duties - Answer 1. Duty of Loyalty
2. Duty of Care
3. Duty of Good Faith and Fair Dealing
Duty of Loyalty - Answer Rule - a partner cannot:
• Compete w/ P
• Advance an interest adverse to P
• Usurp P opportunity
o Exception
• P agreement can designate certain activities as not violating the duty and may provide a safe
harbor allowing
other partners to authorize a transaction b/w a partner and P after full disclosure of material
facts
2. Duty of Care - Answer Partner must refrain from engaging in grossly negligent or reckless
conduct, intentional misconduct, or a knowing
violation of the law
3. Duty of Good Faith and Fair Dealing - Answer o P agreement cannot eliminate this
obligation
Profit & Losses - Answer § P Agreement controls
o If only allocates profits à losses allocated same as profits
§ No P Agreement à equal share of P&L
Partner's Account - Answer Contributions + Profits - Losses - Distributions
Midterm Questions Fully Solved.
Formation - Answer 2 or more persons carrying on a business for profit
Partnership Requirements - Answer 1. Person
2. Intent
3. Necessary Agreement
4. Extensive Activity
5. Profit Sharing test
1. Person - Answer individual or legal entity
Intent - Answer at least 2 persons intend to carry on a business for profit as co-owners
o Do NOT need specific intent to create a P
3. Necessary Agreement - Answer to conduct a for profit business as co-owners
o Can be implied by conduct or an oral agreement
o Written K is NOT required
Extensive Activity - Answer passive co-ownership of property is NOT a P
Profit-Sharing Test
o Rule - if there is profit sharing, presumed to be a P - Answer Exceptions:
• Rent
• Annuity
• Debt
• Wages
• Interest
• Goodwill - payment stemming from sale of business
, Nature of Partnership - Answer Separate legal entity - P may hold property and can sue/be
sued
Relationships Between Partner and Partnership
o Partner as Agent of P - Answer Partner can commit P to contracts w/ third parties
Fiduciary Duties - Answer 1. Duty of Loyalty
2. Duty of Care
3. Duty of Good Faith and Fair Dealing
Duty of Loyalty - Answer Rule - a partner cannot:
• Compete w/ P
• Advance an interest adverse to P
• Usurp P opportunity
o Exception
• P agreement can designate certain activities as not violating the duty and may provide a safe
harbor allowing
other partners to authorize a transaction b/w a partner and P after full disclosure of material
facts
2. Duty of Care - Answer Partner must refrain from engaging in grossly negligent or reckless
conduct, intentional misconduct, or a knowing
violation of the law
3. Duty of Good Faith and Fair Dealing - Answer o P agreement cannot eliminate this
obligation
Profit & Losses - Answer § P Agreement controls
o If only allocates profits à losses allocated same as profits
§ No P Agreement à equal share of P&L
Partner's Account - Answer Contributions + Profits - Losses - Distributions
