Unit 1 Prepare - Business Partnerships Quiz

Unit 1 Prepare - Test Your Knowledge

• Question 1: Jake and Michael import motorcycles from Europe to undercut UK dealers. Michael speaks French, orders bikes, and receives a commission. Jake and Michael are not in partnership.

• Question 2: Jamie and Malcolm are partners. Jamie contributed 25%, Malcolm 75% of capital. Jamie works full-time, Malcolm provides consultancy. Profit sharing is not detailed in the agreement; therefore, the default is 50/50.

• Question 3: Muriel, Molly, and Marilyn share profits equally. Partners do not have an express agreement on leaving/competing or salary, so there is no restriction from leaving the business or expelling a partner.

• Question 4: John, Andrew, and Robert are partners with no written agreement. John's bankruptcy does not automatically dissolve the partnership. Andrew and Robert can continue the business.

• Question 5: Adam, Rebecca, and Kamal are partners with capital contributions of £10,000 (Adam and Rebecca), and £20,000 (Kamal). They share profits in proportion to their contributions. Kamal should receive £8,000 of the £24,000 realisable value.

Unit 1 Consolidate - Test Your Knowledge

• Question 1: Liam and Daniel are partners without a written agreement. Daniel has been involved as a sleeping partner in Car Parts (Garages) Co., potentially creating a conflict of interest. Liam can claim a share of profits from Car Parts, which Daniel may have received.

• Question 2: Nicola helps daughters (Antonia and Chelsea) with their beauty business. The business has an agreement and Nicola is not a partner. If Nicola represented herself as a partner and suppliers acted upon this without confirming whether or not she was partner, Nicola could be liable.

• Question 3: Oliver, Henry, and Michelle are partners. Henry resigns from the partnership; however, liability remains for any present and future partnership obligations. Oliver, Michelle, and Isobel are liable for any further breach.

• Question 4: Helen, Judy, and Len run a bakery as partners with oral profit-sharing agreement (1:1:2, respectively). The sharing of profits is correct if the profit sharing ratio 1(Helen):1(Judy):2(Len). Each partner is liable without limit for firm debts, and one partner can't force dissolution without agreement.

• Question 5: Therese, Tim, and Scarlet are partners. Therese leaves the partnership. She may still be liable for outstanding debts from Bramhope Ltd, to the business, if it was incurred before her leaving.

Test your knowledge on business partnerships with this quiz. It covers various scenarios of partnership agreements, profit sharing, and the implications of partners' actions. Evaluate your understanding of key concepts and prepare effectively for your upcoming assessments.