Which form of compensation is
- Which form of compensation is a partner entitled to receivefrom a partnership? A. Weekly salary for work performed.
B. Fairmarket value for services rendered.
C. A share of partnership profits.
D. A reasonable management fee formanaging the business.
- In Finch v. Raymer, the court ruled that the plaintiffand defendant had formed a partnership to renovate real propertybecause:
A. Title to the real property was heldin the names of both parties.
B. Defendant had drafted thepartnership agreement and therefore any ambiguity regarding theparties’ relationship had to be construed against her.
C. Plaintiff proved that the partieshad agreed to combine their assets, labor, and skill with theunderstanding that profits would be shared between them.
D. All of the above.
- Which of the following is NOT a characteristicof a limited liability company (“LLC”)?
- Members are jointly and severally liable for all LLCobligations.
- Members of an LLC may elect to have the LLC treated as apartnership or corporation for income tax purposes.
- An LLC may be member-managed or manager-managed.
- An LLC may only be formed in accordance with a statuteauthorizing the formation of such entities.
Answer:
1. Option C
Unless otherwise agreed, profits are shared equally among thepartners (by number).Unless otherwise agreed, losses are shared inthe same manner as profits.If partners have agreement as to how tosplit losses, but no agreement on profit split, then profits willbe shared equally. Sharing of profits is versy essential inPartnership. If two people don’t share the profits of the business,they are not partners.
2.Option D
The trial court found that all of the disputed property waspartnership property and that each party held a one-half undividedinterest in the property. Accordingly, the court declared that theparties owned the disputed real property as tenants in common, andit awarded the plaintiff a judgment for one-half of the value ofcertain personal property. The court also awarded attorney’s feesto the plaintiff. The court further concluded that the defendanthad fraudulently conveyed partnership property to her father, aco-defendant, and the court set aside the sale and held that thedefendant was responsible for repaying to her father the amount hepaid for the fraudulently conveyed property.
3.Option D
Limited liability companies are corporate structures in theUnited States where owners are not personally liable for thecompany’s debts or liabilities.Regulations surrounding LLCs varyfrom state to state.Any entity can form an LLC includingindividuals and corporations; however, banks and insurancecompanies cannot.
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