Person D is the owner of a chain of shoe stores. Person D hired person R as the manager of the store. A written contract was signed between them in which it was mentioned that person R will get a monthly salary plus 20 percent of the total profits. R introduced himself as a partner of D and showed agreement which notified the sharing of profit to the person C. C extended the credit to R. R defaulted. To find: The liability of person D as a partner.

Question

Partnership Formation. Daniel is the owner of achain of shoe stores. He hires Rubya to be the manager of anew store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly salaryand 20 percent of the profits. Without Daniel’s knowledge,Rubya represents himself to Classen as Daniel’s partner andshows Classen the agreement to share profits. Classen extendscredit to Rubya. Rubya defaults. Discuss whether Classen canhold Daniel liable as a partner. (See Partnerships.)

Answer 1

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 1BS

Summary Introduction

Case summary:Person D is the owner of a chain of shoe stores. Person D hired person R as the manager of the store. A written contract was signed between them in which it was mentioned that person R will get a monthly salary plus 20 percent of the total profits. R introduced himself as a partner of D and showed agreement which notified the sharing of profit to the person C. C extended the credit to R. R defaulted.

To find: The liability of person D as a partner.

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Partnership Formation. Daniel is the owner of achain of shoe stores. He hires Rubya to be the manager of anew store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees to pay Rubya a monthly salaryand 20 percent of the profits. Without Daniel’s knowledge,Rubya represents himself to Classen as Daniel’s partner andshows Classen the agreement to share profits. Classen extendscredit to Rubya. Rubya defaults. Discuss whether Classen canhold Daniel liable as a partner. (See Partnerships.)

Naquin, Dubois, and Hoffpauir incorporated to form Air Engineered Systems and Services Inc. Dubois became president and Hoffpauir became secretary-treasurer. Naquin was employed by the company. Conflicts among the three caused a break down in the working relationship. Dubois and Hoffpauir offered Naquin $2,000 a month for 10 years for his share of the business if he would sign a noncompetition agreement. Naquin refused to sell until he could examine the corporate records. Dubois and Hoffpauir refused to allow Naquin to see the books until he signed the noncompetition agreement. Could Dubois and Hoffpauir attach such a condition to Naquin’s request? Explain.

Which of the following represents an agency relationship? 1) Horace wants to sell his farm and hires Marcie as his realtor. The two agree that if Marcie finds a buyer for the farm at Horace's price, then Horace will pay Marcie 7% of the price he receives. 2) Bob dies and leaves his assets in a trust for his minor child, Lilly. In the trust, Bob appoints Reggie as the trustee to act for Lilly's benefit. Since Reggie has a fiduciary duty to Lilly as trustee, Reggie is Lilly's agent. 3) Lucy contracts to sell her car to Tony for $5,000. Tony purchases the car only to find it not in the condition that Lucy described it. Tony is claiming that Lucy violated her fiduciary duty to him as his agent under the agreement. 4) Hunt is an attorney of questionable ethics. Roger, one of Hunt's clients, is arrested for DUI, but appears to be too intoxicated to consent to a breath test. Hunt is contacted by…

Answer 2

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 1BS

Summary Introduction

Case summary:Person D is the owner of a chain of shoe stores. Person D hired person R as the manager of the store. A written contract was signed between them in which it was mentioned that person R will get a monthly salary plus 20 percent of the total profits. R introduced himself as a partner of D and showed agreement which notified the sharing of profit to the person C. C extended the credit to R. R defaulted.

To find: The liability of person D as a partner.

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Answer 3

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 1BS

Summary Introduction

Case summary:Person D is the owner of a chain of shoe stores. Person D hired person R as the manager of the store. A written contract was signed between them in which it was mentioned that person R will get a monthly salary plus 20 percent of the total profits. R introduced himself as a partner of D and showed agreement which notified the sharing of profit to the person C. C extended the credit to R. R defaulted.

To find: The liability of person D as a partner.

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Answer 4

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 1BS

Summary Introduction