CHAPTER 32—CREATION AND OPERATION OF A
PARTNERSHIP Key
1. Which of the following best describes the articles of a partnership?
2. Which of the following should be contained in any article of partnership?
3. Mark and James established a partnership firm dealing with textiles. Both of them contributed equally to the
partnership during establishment. However, two years later James sold his share of the firm to Mike. Which of
the following is legally permissible in such a scenario?
4. Which of the following is a duty of a partner?
5. When a partner makes an honest mistake:
6. Which of the following is a right of a partner?
7. Brian, Kirk, and Jim established a partnership firm with equal capital contributions. However, Kirk provided
additional contribution in the form of a loan to the company. Which of the following is true in this scenario?
8. Zen Distilleries, a tobacco wholesaler, operates in a state where individual sales are prohibited for
wholesalers. However, if one of the partners sells two cartons of cigarettes to an individual, the contract is likely
to be:
9. If a partner acts as an agent for the partnership, the resulting contract:
10. A partnership can exist only if the parties have a written agreement.
11. In the absence of a statute to the contrary, the writing of a partnership agreement need not be in a particular
form.
12. Articles of partnerships need not contain the signatures of the partners.
13. In a case of a false impression of a partnership, the law will frequently hold that the apparent partners are
estopped from denying that a partnership exists.
14. Every partner has the duty to abide by majority vote.
15. Each partner has the duty to inform the other partners about matters relating to personal profits from sources
other than the partnership.
16. Each partner must keep a written record of all transactions performed for the firm.
17. A partnership does not have liability for the torts committed by a partner in the course of partnership
business.
18. By virtue of the existence of a partnership, each partner has the authority to enter into binding contracts on
behalf of the partnership.
19. If a partnership agreement does not fix the ratio of sharing the profits and the losses, they are to be shared in
proportion to the contribution of capital.
20. Explain the customary or implied authority of partners.