Partnership agreements often include provisions that excuse partners from liability if they act in good faith and with the honest belief that their actionsare in the best interests of the partnership. Such a provision is designed toMultiple Choicesupport honest partnership practices, regardless of whether the risk is reasonableencourage honest partners to take reasonable business risks without fearing liabilitypromote the formation of partnershipseliminate any individual partner liability

A partnership is a formal arrangement is an agreement between 2 or more business parties where these…

Answered: Partnership agreements often include…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Mr. Ahmed, the general partner of a big furniture store in Muscat is going to contribute a bigger share of money to settle the partnership's liabilities to its creditors. Why Ahmed is going to do so? A. General partners have a distinct legal personality B. None of the choices are correct C. General partners will contribute more because they have more money D. General partners have unlimited liability
To Partner or Not to Partner John Willis, who is 27 and single, had just completed his fifth year of employment as a carpenter for a very small homebuilder. His boss, the sole owner of the company, is Tyrone Young. A few days ago, Tyrone asked John if he would like to become a partner, which he could do by contributing $70,000. In turn, John would receive 40 percent of all prof- its earned by the business. John had saved $30,000 and could borrow the balance from his grandmother at a low-interest rate, but he would have to pay her back within 15 years. John was undecided about becoming a partner. He liked the idea but he also knew there were risks and concerns. He decided to talk to Tyrone at lunch. Here is how the conversation went. John: I've been giving your offer a lot of thought, Tyrone. It's a tough decision and I don't want to make the wrong one. So I'd like to chat with you about some of the problems involved in running a business. Tyrone: Sure. I struggled with these issues…
What is one of the primary roles that agency law plays in partnerships? Group of answer choices: A. Controls formation of the entity. B. Dictate how the partners can operate the business. C. Whether or not a partner can bind the partnership to obligations or liabilities. D. Dictates what the operating agreement must state..
The following statements are true, except * -A limited partner is liable for partnership debts up to the extent of his capital contribution -An industrial partner can also be a capitalist partner at the same time. -An industrial partner who engages in business for himself can be excluded from the partnership. -A capitalist partner may engage in the same line of business as that of the partnership -answer not given The following partnership accounts represent a liability of a partner to the partnership, except * -Receivable from partner -Loan to partner -Due from partner -all of the above -answer not given A partner’s capital account is credited for the following transactions, except * -Share in net income -loan from the partner -Original and additional investment -both A and C -answer not given
T F The articles of partnership is a written contractdescribing the terms of a partnership
45) What is a disadvantage of partnerships over sole proprietorships? A. In partnerships, profits have to be shared, whereas in sole proprietorships all profits belong exclusively to the owner. B. Unlike sole proprietorships, partnerships do not face any regulatory controls that affect their activities. C. In partnerships, all owners have unlimited liability, whereas in sole proprietorships they have limited liability. D. Unlike a sole proprietorship, a partnership is terminated when a partner dies or withdraws. E. In sole proprietorships, the owners have access to more funds than in partnerships.
A, B and C were in general partnership business. Because of wrong decision taken by Mr.C the business got losses, which even the business assets cannot cover those liabilities and all of the partners will be subjected for unlimited liabilities. Who will be liable for the business debts and has to use personal property to pay for the losses. Select one: a. Partner B b. Partner C c. Partner A d. All the partners
describe a general partnership business venture that would be interested in becoming involved in. Indicate what would be certain to include in a written partnership agreement. Be specific as to how it would share profits and losses.
1. Which of the following is an advantage of partnerships? a. Each partner has limited liability for the debts of a business. b. Each partner is responsible only for his or her acts. c. A business continues to exist even after the death of any one partner. d. More capital can be raised since good credit may be available. 2. Which of the following factors should be considered while choosing the proper legal form for a business? a. Packaging of the product b. Location of the factory c. Nature of the business d. Name of the product 3. Once the choice of a legal form for a new business has been made, it cannot be changed until the business is dissolved or sold. a. True b. False 4. An equal partnership between owners is advisable in order to facilitate decision-making. a. True b. False 5. Which of the following is an advantage of a corporation? a. It cannot make use of a business owner's personal property…
Companies A and B differ only in their capital structure. A is financed 30% debt and 70% equity: B is financed 10% debt and 90% equity. The debt of both companies is risk-free. a. Rosencrantz owns 1% of the common stock of A. What other investment package would produce identical cash flow for Rosencrantz? b. Guildenstern owns 2% of common stock of B. What other investment package would produce identical cash flows for Guildenstern?
When a general partnership is sued, the lawsuits often go after the more wealthy partners, ( a) True 0 b) False
Which of the following must occur for a new partner to enter the partnership by acquiring an ownership interest directly from an existing partner? A. The new partner must acquire all of the current partner's ownership interest B. Existing partners must know the amount the new partners is paying for the ownership interest C. The new partner must live in the same state as the other partners D. Existing partners must approve the admission of the new partner into partnership

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