Chapter 32. Limited Partnerships and Limited Liability Companies
1. Creation of a limited partnership does not require more formalities than formation of a general partnership.
a. True
b. False
2. Under the RULPA, a limited partnership may not use a name that is deceptively similar to that of any corporation or
other limited partnership.
a. True
b. False
3. The RULPA requires that the limited partnership certificate list the capital contribution of each general and limited
partner.
a. True
b. False
4. Foreign limited partnerships do not have to operate in another country.
a. True
b. False
5. A limited partner will not lose his limited status because of voting on an amendment to the partnership agreement
allowing a new business venture.
a. True
b. False
6. Unanimous written consent of all partners is necessary to add new limited partners to a limited partnership.
a. True
b. False
7. A limited partner has limited access to the books and records of the partnership.
a. True
b. False
8. Once a partner becomes entitled to a distribution, he has the status of a creditor with respect to that distribution.
a. True
b. False
9. Under all LLC statutes, a unanimous vote of the members must be obtained to approve a merger.
a. True
b. False
10. Statutes or the common law impose duties of good faith and fair dealing on all members of an LLC whether the LLC
is manager managed or member managed.
a. True
b. False
11. Upon dissolution, unlike a general partner, a limited partner can get his capital back before general creditors are paid.
a. True
b. False
12. Limited partnerships are the same as limited liability partnerships.
a. True
b. False
13. The 2001 revision of the RULPA has been widely adopted.
a. True
b. False
14. A limited partnership is a partnership formed by two or more persons under the laws of a state and having one or
more general partners and one or more limited partners.
a. True
b. False
15. Like general partnerships, limited partnerships are statutory creations that did not exist at common law.
a. True
b. False
16. A member of a limited liability company has a property interest in the property owned by the LLC.
a. True
b. False
17. A “person” for purposes of a limited partnership can be a corporation.
a. True
b. False
18. Under the 1985 Act, the limited partner need not be named in the limited partnership certificate.
a. True
b. False
19. Adrianne may form a limited liability company by filing articles of organization in a designated state office, even if
she is the only member of the company.
a. True
b. False
20. Ownership interests in manager-operated LLCs are not considered to be securities.
a. True
b. False
21. The causes of dissolution and the priorities in the distribution of assets for a limited partnership are not the same as
those of a general partnership.
a. True
b. False
22. Joe is a limited partner in a limited partnership. Joe does not have the right to dissolve the partnership except by
decree of a court.
a. True
b. False
23. If the partnership agreement does not specify when a limited partner may withdraw or specify a definite time for the
limited partnership’s dissolution, a limited partner may withdraw upon giving at least one month‘s written notice to
each general partner.
a. True
b. False
24. A limited partner may vote on the sale of all of the assets of the limited partnership or a change in the nature of the
business without being deemed to have taken part in control of the business.
a. True
b. False
25. After the formation of a limited partnership, the admission of additional general partners can only be accomplished
with the written consent of all partners.
a. True
b. False
26. A general partner, but not a limited partner, may be either a secured or unsecured creditor of the partnership with
the same rights as a person who is not a partner.
a. True
b. False
27. Unless otherwise provided in the LLC’s operating agreement, a member may assign his financial interest in the LLC
without dissolving the LLC.
a. True
b. False
28. The RULPA recognizes the right of a limited partner to bring an action on the behalf of a limited partnership to
recover a judgment in its favor if the general partners having authority to do so have refused to bring the action.
a. True
b. False
29. One of the most appealing features of a limited partnership is the limited personal liability it offers to limited partners.
a. True
b. False
30. It remains unclear under the law whether a limited partner has a fiduciary duty to his general partners or to the
limited partnership.
a. True
b. False
31. The certificate of limited partnership need not be amended if a new general partner is admitted.
a. True
b. False
32. An oral promise by a limited partner to contribute to the limited partnership is enforceable.
a. True
b. False
33. A limited partnership agreement may not provide that limited partners have the right to vote on matters as a separate
class from the general partners.
a. True
b. False
34. A creditor of a limited partner may obtain a charging order against the limited partner’s interest in the partnership,
thereby becoming an assignee of the partnership interest.
a. True
b. False
35. A limited liability company is a form of unincorporated business association that blends the advantages of both
general and limited partnerships, because all its members may have limited liability and all may participate in
management and control without loss of limited liability.
a. True
b. False
36. All states except one have adopted either the 1976 or 1985 RULPA.
a. True
b. False
37. False statements in a certificate of limited partnership or in an amendment to the certificate that cause loss to third
parties who rely on the statements may result in liability for the general partners.
a. True
b. False
38. A partner may not receive a distribution from a limited partnership unless the remaining assets are deemed sufficient
to pay partnership liabilities other than liabilities to partners on account of their partnership interests.
a. True
b. False
39. RULPA requires a lesser duty of care by a general partner to a general partnership than that owed by a general
partner to a limited partnership.
a. True
b. False
40. In states where limited liability limited partnerships (LLLPs) are available, a limited partnership may register as an
LLLP without having to form a new organization.
a. True
b. False
41. Registration of a foreign limited partnership is required in order to:
a. go into business in another country.
b. defend the partnership in court.
c. collect contributions from foreign investors.
d. None of these.
42. Unless otherwise agreed, under RULPA, a limited partner is entitled to repayment of his capital contribution under
which of the following conditions?
a. Before general partners are repaid their capital contributions
b. At the same time and on a pro rata basis with the general partners
c. Only after general partners have been repaid their capital contributions
d. None of these.