1. Formation of Partnerships
Question 1:
What is generally required for the formation of a partnership?
A) A written agreement only
B) An oral agreement only
C) An agreement between two or more persons to carry on a business for profit
D) A formal registration with the government
Answer: C) An agreement between two or more persons to carry on a business for profit
Question 2:
Which of the following is not typically required to form a partnership?
A) A written partnership agreement
B) The intention to share profits
C) A business license
D) The formation of a legal entity
Answer: D) The formation of a legal entity
2. Types of Partnerships
Question 1:
Which type of partnership includes one or more general partners who manage the business and one or more limited partners who provide capital but do not participate in management?
A) General Partnership
B) Limited Partnership
C) Limited Liability Partnership
D) Joint Venture
Answer: B) Limited Partnership
Question 2:
In a general partnership, each partner is:
A) Personally liable for the debts and obligations of the partnership
B) Only liable up to the amount of their investment
C) Not involved in the management of the business
D) Entitled to a fixed salary regardless of profits
Answer: A) Personally liable for the debts and obligations of the partnership
3. Rights and Duties of Partners
Question 1:
Which of the following is a common duty of a partner in a partnership?
A) To act in good faith and with fair dealing
B) To compete against the partnership’s business
C) To exclude other partners from business decisions
D) To retain all profits for themselves
Answer: A) To act in good faith and with fair dealing
Question 2:
In a partnership, which of the following rights is typically not granted to a partner?
A) The right to participate in the management of the business
B) The right to receive a fixed salary
C) The right to share in the profits and losses of the partnership
D) The right to inspect the partnership’s books and records
Answer: B) The right to receive a fixed salary
4. Partnership Liability
Question 1:
In a general partnership, how is liability for partnership debts typically shared?
A) Equally among all partners
B) Only by the managing partner
C) Proportionally based on each partner’s investment
D) Only by the partner who incurred the debt
Answer: A) Equally among all partners
Question 2:
Which of the following statements about limited partners is true?
A) Limited partners have unlimited liability for the partnership’s debts
B) Limited partners are involved in the day-to-day management of the partnership
C) Limited partners are only liable for the partnership’s debts up to the amount of their investment
D) Limited partners can be held liable for the partnership’s debts if they participate in management
Answer: C) Limited partners are only liable for the partnership’s debts up to the amount of their investment
5. Dissolution of Partnerships
Question 1:
What is a common cause for the dissolution of a partnership?
A) A partner’s retirement
B) The acquisition of a new business license
C) The decision to change the partnership’s name
D) The expansion of the partnership’s operations
Answer: A) A partner’s retirement
Question 2:
Upon dissolution of a partnership, which of the following is typically not a step in the dissolution process?
A) Paying off all partnership debts
B) Distributing remaining assets to the partners
C) Forming a new partnership immediately
D) Settling any remaining partnership liabilities
Answer: C) Forming a new partnership immediately