BUL 5810 Study Guide Questions With
Correct Answers
A corporation may not be a partner in a partnership. - answer✔✔false
Under the common law, a partnership is generally considered to be a legal entity rather than an
aggregate of individuals. - answer✔✔False
Partners may elect to have the partnership not be a separate taxable entity, so that only the
partners are taxed. - answer✔✔True
A general partnership may be formed for a charitable purpose. - answer✔✔False
Tori and Margaret agree to form a partnership. The partnership contract between Tori and
Margaret does not have to be in writing in order to be enforceable in the courts. - answer✔✔True
What is considered "partnership property" is determined primarily by the partners' intentions. -
answer✔✔True
Sharing of gross returns establishes a partnership. - answer✔✔False
In some corporations, only the shareholders are taxed; in others, both the corporation as an entity
is taxed and the shareholders are taxed as well. - answer✔✔true
A partner cannot assign his interest in the partnership without dissolving the partnership. -
answer✔✔false
Under the RUPA, no person may become a member of a partnership without the consent of all
the partners. - answer✔✔True
A partnership name may be the name of all the partners, some of them or any one of them. -
answer✔✔True
Under the RUPA, a partnership agreement may be written or oral, but not implied. -
answer✔✔False
The UPA was amended in 2016 as part of the Bring Harmony to Business Act. - answer✔✔False
A limited liability company (LLC) provides limited liability to all of its owners and permits all of
its owners to participate in management. - answer✔✔true
The form of business association known as a partnership can be traced to ancient Babylonia and
classical Greece and was used in England during the Middle Ages. - answer✔✔True
Corporations today outnumber unincorporated business associations. - answer✔✔false
All states have authorized the formation of limited liability companies - answer✔✔true
All 50 states have adopted the Revised Uniform Partnership Act. - answer✔✔false
The trustees are generally not personally liable for the debts of a business trust. -
answer✔✔False
Because the statute of frauds does not apply expressly to a contract for the formation of a
partnership, usually no writing is required to create the relationship. - answer✔✔True
A joint venture is necessarily of short duration. - answer✔✔False
A sole proprietorship is formed without any formality, is not a separate taxable entity, is
dissolved upon death of the owner, and has unlimited liability for the owner. - answer✔✔True
The newly formed Tavin and Shane Partnership cannot commence business until it meets its
state's required minimum amount of capitalization. - answer✔✔False
The proportion in which partners bear losses depends upon their relative capital contributions. -
answer✔✔False
In all types of business entities, the owners can fully share in the management and control of the
business. - answer✔✔False
Income from some types of business entities is taxed twice. - answer✔✔True
General partnerships are frequently used in finance, accounting, real estate, and law. -
answer✔✔True
If no specific agreement exists, the partners bear losses in the same proportion in which they
share profits. - answer✔✔True
The choice of the most appropriate form of business enterprise cannot be determined without
considering the particular circumstances of the owners. - answer✔✔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. - answer✔✔(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. - answer✔✔(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. - answer✔✔(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. - answer✔✔(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. - answer✔✔(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 - answer✔✔(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. - answer✔✔(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. - answer✔✔(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
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