Law - Ch-8 ( Partnerships)

Adam, Ben and Carol have carried on business together in partnership since July. In September they decided to enter into a formal partnership agreement. The partners agreed the terms of the agreement in October and signed the completed agreement in November.

When did the partnership commence?

• 1. July

• 1. September

• 1. October

• 1. November

Which of the following statements regarding different types of partnerships is correct?

• 1. The accounts of a limited liability partnership must be filed at Companies House

• 1. An incoming partner immediately becomes liable for all debts incurred before his admission

• 1. The estate of a deceased partner is not liable for debts incurred before the partner’s death

For which of the following do partners in non-trading firms NOT have implied authority?

• 1. To receive payment of debts due to the firm

• 1. To borrow money on the firm’s credit

• 1. To sell goods belonging to the firm

• 1. To engage employees for the business

What is the liability of partners for the tortious acts of each other carried out in the normal course of business?

• 1. Joint

• 1. Several

• 1. Joint or several

• 1. Joint and several

For which of the following does a partner have no apparent authority, regardless of the nature of the firm?

• 1. Receive payments of debts due and give receipts

• 1. Secure a loan to the firm by depositing title deeds with the lender

• 1. Employ a solicitor to defend the firm in a legal action

• 1. Compromise a debt by receiving something other than money in settlement

A partner who retires from his firm is required to place an advertisement to that effect in the London Gazette.

To whom is this advertisement deemed to give notice?

• 1. Anyone who reads the advertisement

• 1. Anyone, whether they read the advertisement or not, who had not previously dealt with the firm but who knew the person to be a partner

• 1. Anyone who reads the advertisement who had not previously dealt with the firm but who knew the individual to be a partner

• 1. Anyone, whether they read the advertisement or not, and regardless of their previous relationship with the firm

Which of the following statements in relation to partnership law is NOT correct?

• 1. In England, a partnership has no existence separate from the partners

• 1. Each partner can bind the firm in contract if acting in the ordinary course of business

• 1. New partners are not liable for debts incurred before they became partners

• 1. To be binding, a partnership agreement must be in writing

On which of the following grounds is a court order needed for dissolution of a partnership on application by a partner?

• 1. On the expiration of the fixed term for which the partnership was created

• 1. On bankruptcy or death of a partner

• 1. On a charging order being made against a partner

• 1. On the permanent incapacity of a partner

A restaurant is owned by a partnership whose partners are Ted, Lauren, and Richard. Lauren and Richard are actively involved in the business and run the restaurant on a daily basis. Ted initially contributed money to form the partnership and shares in profits of the business but does not participate in the operations of the restaurant.

Ted can be described as which of the following types of partners?

• 1. General partner

• 1. Fixed share partner

• 1. Sleeping partner

• 1. Nominal partner

Which of the following are statutory rights of a partner under the Partnership Act 1890?

(1) To share in the capital, profits and losses of the business in proportion to their initial capital contribution to the firm

(2) To have unfettered access to the firm’s books and accounts

• 1. 1 only

• 1. 2 only

• 1. Neither 1 nor 2

• 1. Both 1 and 2