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Exam 37: Partnerships and Limited Liability Partnerships

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Question 21

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Round-Up Ranch and Smith & Jones, Accountants, are limited liability partnerships (LLPs) . The major features of an LLP are that it limits the personal liability of the partners and

A) it allows the partnership to continue as a pass-through tax entity.
B) LLP statutes do not vary from state to state.
C) it can only do business in the state in which it was formed.
D) only a few states have enacted LLP statutes.

E) A) and B)
F) B) and C)

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Question 22

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Fact Pattern 37-1B (Questions B10-B13 apply) Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 37-1B. The partners decide to dissolve Equity Lending. Duke collects and distributes the firm's assets. This results in

A) nothing with respect to the firm's existence.
B) the continuation of the firm's business.
C) the termination of the firm's legal existence.
D) the temporary suspension of the firm's business.

E) All of the above
F) A) and B)

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Question 23

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After a partner dissociates from a continuing partnership, the partnership is no longer bound by the acts of the dissociated partner, even on a theory of apparent authority.

Limits on a partner's authority normally are effective only with respect to third parties who are notified of the limitation.

Every act of the partner concerning partnership business and "business of the kind" and every contract signed in the partnership's name bind the partner, but not the firm.

Commercial Credit & Finance is a lim?ited partner?ship. Derry, Eleni, and Frey are the general partners. Derry dies. The partnership can

Sable and Rex agree while talking on the phone to form a partner?ship-The Home Source-to deal in transfers of real property. To be enforceable, their agreement must

In a limited partnership, a general partner's dissociation from the firm normally will lead to dissolution unless all partners agree to continue the business.

On a partner's dissociation, the partner's duty of loyalty ends.

Buckley is a general partner in Cut-Rate Shipping, LLLP, a limited liability lim?ited partnership, which cannot pay its debts. Buckley is personally li?able for the debts

On dissolution, the creditors of the partnership, but not the creditors of the individual partners, can make claims on the partnership's assets.

Dissociation normally entitles the partner to buy his or her interest from the partnership.

Pualani and Quentin do business as partners in Rio Vista Builders, a residential construction firm. For federal income tax purposes, Rio Vista would be treated as

Luke and Maya form Northwest Air Express, a general partnership. The essential elements of this partnership do not include

The intent to associate is a key element of a partnership.

Fact Pattern 37-1B (Questions B10-B13 apply) Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. -Refer to Fact Pattern 37-1B. Bryn, Cornell, and Duke decide to admit Giselle as a new partner in Equity Lending. Giselle's liability for partnership debts incurred before her admission is

A limited liability partnership may exempt its partners from personal liability for any partnership obligation.

A majority of the states treat a partnership as an entity for most purposes.

In a limited partnership, a limited partner has full responsibility for the partnership and for all its debts.

Nazih and Ovidia are limited partners in Physicians Medical Center, a limited partner?ship. In terms of the firm's books and information regarding partnership business, Nazih and Ovidia are entitled to