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LAW 531 Week 1 Quiz

1. 1. The Black Squirrel limited partnership has been in operation for many years, but has recently fallen on hard times. The partners have decided to dissolve, although there are few assets remaining in the partnership. Shortly after the partnership filed its certificate of limited partnership, the partners had foresight to incorporate into their partnership agreement a provision that, in the event of dissolution, the assets would be distributed in payment of claims first to limited partners, then to general partners, then to creditors. Hilda is a limited partner and feels relieved that she will receive at least a portion of her capital. Henry, one of the general partners, said that this provision is void and unenforceable. Which of the following best describes the situation?
2. The provision placing limited partners ahead of general partners is unenforceable, thus all partners would be on equal footing and ahead of creditors.
3. The distribution of assets in the event of dissolution is one of the few provisions where the Revised Uniform Limited Partnership Act does not allow modification.
4. The distribution, as called for in the agreement, would be enforceable if it had been included in any filings related to the limited partnership.
5. The provision placing partners ahead of the creditors is not enforceable, but the priority of limited partners over general partners is enforceable.


2. Which of the following is true of the Federal Arbitration Act?

1. It provides that arbitration agreements are valid, irrevocable and enforceable.
2. It permits an appeal for all arbitration awards.
3. It applies only to breach of contract disputes.
4. It governs all types of alternative dispute resolution.
5. A mediator does not make a decision or an award.
6. If a settlement agreement is not reached in mediation, then the parties hire a new mediator.
7. A settlement agreement is never reached with a mediator.
8. Was created by the Federal Mediation Act of 1925.
9. A corporation is a separate legal entity.
10. Corporation shareholders are subject to unlimited personal liability.
11. A corporation terminates upon the death of an owner.
12. Corporation owners are only taxed once on earnings.
13. Arbitration
14. Mini-trial
15. Mediation
16. Conciliation


10.Which of the following is true in the creation of a general partnership?

1. The business must have the names of all the partners
2. The name selected cannot indicate that it is a corporation
3. The business name cannot be a fictitious name
4. The business cannot operate under a trade name.
5. The choice is determined by the Internal Revenue Service based on all the facts and circumstances
6. The choice is determined solely by whether the primary business is services or goods.
7. The choice takes into account many factors; including finding an option that has all the characteristics desired.
8. The choice is determined solely by the amount of capital invested.
9. Neither Ginger nor Fred are liable personally, nr is the partnership, as they did not put the substance in the building.
10. Both Ginger and Fred are liable, regardless of the circumstances, by virtue of the fact that they are partners.
11. Ginger is liable because she is the one who purchased the building. Fred is not liable, even though he had actual knowledge, because he did not purchase the building.
12. Fred is liable because he was put on notice of the presence of the substance. Ginger is not liable because she did not have actual knowledge.
13. Each general partner would receive $50,000, and each limited partner would receive $100,000.
14. All partners would receive $75,000, regardless of whether he or she is a general or a limited partner.
15. Each general partner would receive $30,000, and each limited partner would receive $120,000.
16. Each general partner would receive $120,000, and each limited partner would receive $30,000.
17. A resolution may or may not be reached
18. One party usually drops the case
19. A judicial referee makes recommendations to the parties
20. Parties can introduce evidence to support their case.
21. Franchise
22. Limited Liability Partnership (LLP)
23. Limited Liability Company (LLC)
24. S-Corporation
25. Each shareholder of the corporation will be treated as a limited partner of the limited partnership
26. The liability of the corporate general partner will be limited to the amount of its assets
27. Each shareholder of the corporation will be treated as a general partner of the limited partnership
28. The limited liability of the corporation will result in the limited partners having greater liability that they would otherwise.