Partnership and Corporate Structures Quiz

The following are rights of partners Except _______

• The partners are entitled to share from the profits of the business.

• Every general partner can take part in the management of the firm.

• Every partner must have access to the partners’ book of account.

• A partner has right to amend the deed of partnership without other partner’s concern

Which of the following is a characteristic of a partnership business?

• One person owns and controls the business

• There are two to twenty owners who share the profits and liabilities

• The business is owned by shareholders

• The business has unlimited liability for only one partner

In a partnership, the partners share profits and losses based on ______

• Equal share only

• Their initial investment

• A fixed agreement between them

• Their age or experience in the business

Which of the following is a disadvantage of a partnership?

• Shared management responsibility

• Limited capital

• Unlimited liability for partners

• Ability to expand easily

Which document is typically used to outline the terms and conditions of a partnership agreement?

• Memorandum of Association

• Certificate of Incorporation

• Shareholder Agreement

• Partnership Deed

If a partner leaves the partnership, which of the following happens?

• The partnership is automatically dissolved

• The partnership may continue, but the remaining partners may need to revise the partnership agreement

• The business continues but only under the name of the departing partner

• All profits are transferred to the partner who leaves

In a partnership, which type of liability do the partners have?

• Limited liability

• Unlimited liability

• No liability

• Joint liability

What happens if one partner acts outside the scope of the partnership agreement?

• The other partners have no responsibility

• The action is binding on the partnership

• The partnership may be liable for the action

• The partner is dismissed automatically

Which of the following is an example of a general partnership?

• A small business owned by two people who share all the responsibilities

• A business that is owned by investors who have no management role

• A business where one partner has limited responsibility

• A sole trader who hires workers

What is the primary role of a dormant/sleeping partner in a partnership?

• To manage day-to-day operations of the business

• To provide financial capital but not involve in daily management

• To make decisions on behalf of the partnership

• To offer expertise in the business field