Partnership: Dissolution

Question 1

A partner is dissociated from a partnership upon the occurrence of which of the following events?

1. That partner’s express will (with notice) to withdraw
2. An event agreed to in the partnership agreement
3. That partner’s expulsion pursuant to the partnership agreement
4. That partner’s becoming a debtor in bankruptcy
5. All of the above

Answer 1

5. All of the above

Question 2

A partnership is dissolved, and its business must be wound up:

1. When the partnership business becomes unlawful
2. In a partnership-at-will, when the partnership receives notice from a partner (who has not been dissociated) of that partner’s express will to withdraw as a partner
3. when, upon partner application, a court determines that the economic purpose of the partnership is likely to be unreasonably frustrated
4. After expiration of the defined term for the partnership
5. All of the above

Answer 2

5. All of the above

Question 3

A, B and C are partners in ALPHA PARTNERSHIP, and ALPHA PARTNERSHIP has three assets: three identical fancy cars. Which of the following is permitted:

1. A can sell one of the cars and keep the profits for herself
2. A can drive one of the cars for partnership business
3. A can drive one of the cars for her personal business
4. A can pledge one of the cars in connection with getting a personal loan
5. All of the above

Answer 3

2. A can drive one of the cars for partnership business

Question 4

Which of the following interests in a partnership is transferable?

1. a partner’s share of the profits and losses of the partnership
2. a partner’s right to manage the partnership
3. a partner’s right to receive distributions from the partnership
4. all of the above
5. 1 and 3 only

Answer 4

5. 1 and 3 only

Question 5

Which of the following judicial determinations causes the dissolution and winding up of a partnership?

1. it is not reasonably practicable to carry on the partnership business in conformity with the partnership agreement
2. the partnership is losing money
3. the partnership has made sufficient profits
4. the partners are unhappy with the partnership
5. some partners have contributed more than others to the partnership

Answer 5

1. It is not reasonably practicable to carry on the partnership in conformity with the partnership agreement

Question 6

When a partnership is dissolved, and its business and affairs are being wound up,

1. the partnership continues to exist for the purpose of winding up
2. the partners can bind the partnership for appropriate winding up acts
3. the partnership is liable for transactions with other parties who lack notice of the dissolution
4. the partnership pays its debts and distributes it assets
5. all of the above

Answer 6

5. all of the above

Question 7

What was the issue in Prentiss v. Sheffel?

Answer 7

whether the majority partners in a partnership-at-will, who have excluded a third partner from partnership management and affairs, can purchase the partnership assets at a judicially supervised dissolution sale

Question 8

A partnership is bound by a partner’s act after dissolution that:

1. takes place in any circumstances
2. would have bound the partnership before dissolution
3. benefits the partnership
4. is appropriate for winding up the partnership business
5. disadvantages the partnership

Answer 8

4. is appropriate for winding up the partnership business

Question 9

What were the issue and holding in Owen v. Cohen?

Answer 9

Does the evidence warrant a decree of dissolution of the partnership; yes

Question 10

When a partnership is dissolved and its business wound up, the partnership:

Answer 10

pays its creditors, and then distributes any surplus assets to the partners

Question 11

when one partner wants out of a partnership

Answer 11

dislocation

Question 12

when the partnership blows up and you go into winding up

Answer 12

dissolution