Quiz 42: Partnerships

Business

A) C will not lose the case because A is a partner of his firm. A partner of his firm can make contracts (even if they were beyond the scope) on behalf of his firm. Incorrect. b) C will prevail but not because A has implied authority, A has apparent authority as partner of a firm. Incorrect. c) C will prevail but because A has apparent authority as partner of a firm. C as a party to the contract can reasonably expect that A should be able to make contracts on behalf on his partners. Correct. d) C will not lose the case because A 's apparent authority (even though restricted in writing) binds the other partners of his firm to the contract. Incorrect.

Facts to this case • R, L, and N formed a partnership. • R and L contributed their personal assets, N only contributed in services. Case Issue The issue is how the proceeds from dissolution of the partnership should be distributed. Relevant Terms, Laws, and Cases Partnership - is a business formed between two or more people to share profit and risk. Revised Uniform Partnership Act (RUPA) - is a law adopted by many states which govern partnerships. Analysis and Conclusion Under the RUPA the distribution of funds to partnership gives priority to creditors of the partnership; capital contributions; and lastly profits. Since, R and L contributed capital they will receive distribution of funds for the assets they contributed. Thus the funds will not be distributed equally. R and L will have a larger share for being capital contributors.

After a partnership is dissolved, the money will first be distributed to creditors (loans) of the partnership (III), then to the contributions of individual partners to capital assets of the firm (I), and lastly the remaining as profits to the partners (II). Thus, the answer is a. III, I, II.

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