Partnerships PDF Exam Paper 2024

Test Unit 1 Prepare - Test Your Knowledge 5 OF 5 QUESTIONS REMAINING Test Content Question 1 1 Point Jake and Michael decide to import motorcycles from Europe to undercut expensive official...

Test Unit 1 Prepare - Test Your Knowledge 5 OF 5 QUESTIONS REMAINING Test Content Question 1 1 Point Jake and Michael decide to import motorcycles from Europe to undercut expensive official dealers in the UK. Michael, who can speak French, goes to France and orders the bikes. Jake pays the French seller directly. Jake gives Michael 10% of the difference between the 'official' UK price and the price Jake actually pays. Jake then sells the bikes in his shop. Indicate whether the following statement is true or false: Jake and Michael are in partnership together. A True B False Clear selection Question 2 1 Point Jamie and Malcolm went into partnership earlier this year. Jamie provided 25% and Malcolm 75% of the capital needed to buy the partnership assets. Jamie works full-time in the business, but it was agreed that Malcolm would not spend any particular number of hours working for the business and simply provide consultancy advice as and when requested by Jamie. There is no written partnership agreement and nothing else has been agreed. How will Jamie and Malcolm share the profits? Which one of the following is CORRECT? https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…09_1/overview/attempt/_18418305_1?courseId=_69895894_1 17/11/2024, 14:41 Page 1 of 4  A Jamie will be entitled to 25% of the profits and Malcolm will be entitled to 75%. B Jamie and Malcolm will each be entitled to 50% of the profits. Under the Partnership Act 1890, Jamie is entitled to a reasonable salary, and Jamie C and Malcolm will split the remainder of the profits between them equally. Because Malcolm is under no obligation to work for the business, he will not be entitled to a salary but James will be entitled to a reasonable sum for the work he D carries out. Malcolm and Jamie will then split the remainder of the profits between them, Malcolm receiving 75% and Jamie 25%. Question 3 1 Point Muriel, Molly and Marilyn have been in partnership since 1990. They all work full-time for the business. They share profits equally and have no relevant express agreement between them. Which one of the following is CORRECT? If Molly leaves the business, she could be prevented from setting up a competing A business. B Each partner is entitled to receive a salary in addition to her share of the profits. C Muriel and Molly together could expel Marilyn, even if Marilyn objects. Any of the 3 partners could dissolve the partnership at any time without giving a D reason. Question 4 1 Point John, Andrew and Robert have been in partnership together for 3 years and they have no partnership agreement. John has recently been declared bankrupt. https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…09_1/overview/attempt/_18418305_1?courseId=_69895894_1 17/11/2024, 14:41 Page 2 of 4 Indicate whether the following statement is true or false: Andrew and Robert can insist on continuing the business in partnership without John, who will have to retire. A True B False Clear selection Question 5 1 Point Two years ago Adam, Rebecca and Kamal set up a partnership. Their agreement provides for income and capital profits to be shared in the same proportions as their capital contributions which were: Adam - £10,000, Rebecca - £10,000 and Kamal - £20,000. The business has just ceased to trade, having a total realisable value of £24,000 after allowing for payment of all claims on the partnership including the partners' capital contribution. How much should Kamal receive from this £24,000? Which one of the following is CORRECT? A £12,000 B £8,000 C £20,000 D £6,000 Additional content Drag and drop files here or click to add text. https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…09_1/overview/attempt/_18418305_1?courseId=_69895894_1 17/11/2024, 14:41 Page 3 of 4  Questions Filter (5) Save and Close Submit https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…09_1/overview/attempt/_18418305_1?courseId=_69895894_1 17/11/2024, 14:41 Page 4 of 4  Test Unit 1 Consolidate - Test Your Knowledge 5 OF 5 QUESTIONS REMAINING Test Content Question 1 1 Point Liam and Daniel have been partners since 1990 in a garage trading as L & D Vehicle Repairs. They have no partnership agreement. They have always purchased their stock from Car Parts (Garages) Co. Liam has just learnt that Daniel has been a sleeping partner in Car Parts (Garages) Co for the last year. When challenged, Daniel replied that Car Parts (Garages) Co wrote to L & D Vehicle Repairs suggesting a merger of the 2 businesses but, as Liam always said it was good to keep their business small, Daniel thought that Liam would not agree to the merger; instead, he negotiated his personal involvement with Car Parts (Garages) Co. Which one of the following is CORRECT? Liam is entitled to claim from Daniel an account for his share of the profits of Car A Parts (Garages) Co on the basis that Daniel is involved in a competing business without Liam's knowledge and consent Liam is entitled to expel Daniel from the partnership and to force Daniel to sell to B him his share of the business On the basis that the opportunity to invest in Car Parts (Garages) Co was initially offered to L & D Vehicle Repairs, Liam may succeed in claiming that Daniel should C now account to Liam for any profit he has received from his involvement with the firm. If Daniel now retires as a partner in L&D Vehicle Repairs, Liam will nevertheless D continue as a partner in the firm. Question 2 1 Point https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…18_1/overview/attempt/_18418716_1?courseId=_69895894_1 17/11/2024, 14:46 Page 1 of 4  Nicola has helped her daughters Antonia and Chelsea establish a beauty therapist business by providing the necessary finance and by visiting the salon regularly to provide business advice. Antonia and Chelsea had a formal partnership agreement drawn up between them. Nicola does not want to be a partner in the firm as she runs her own driving school business. However, as Nicola is often seen at the salon, Antonia has occasionally told product suppliers that Nicola is a partner in the firm. Nicola wants to know if she could be liable for a debt of the firm to a supplier to whom Antonia had represented that Nicola was a partner. Which one of the following is INCORRECT? Nicola could possibly be liable, if Nicola knew of and allowed the representations A made by Antonia Nicola could possibly be liable, if the contract with the supplier was made after the B representation C Nicola could possibly be liable, if the supplier thought Nicola was a partner D Nicola could not be liable in any circumstances Question 3 1 Point Oliver, Henry and Michelle are in partnership supplying office furniture. On 26 February the firm enters into a contract to supply desks to a customer. On 4 March Henry retires from the partnership and the other two agree to indemnify him against any liability on the contract. On 25 March the partnership defaults on the contract. On 28 March Isobel joins the firm as a partner. Who is liable for breach of contract? Which one of the following is CORRECT? A Only Oliver, Michelle and Isobel are liable for the breach of contract B Oliver, Henry, Michelle and Isobel are liable for the breach of contract https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…18_1/overview/attempt/_18418716_1?courseId=_69895894_1 17/11/2024, 14:46 Page 2 of 4  C Only Oliver and Michelle are liable for the breach of contract D Only Oliver, Henry and Michelle are liable for the breach of contract Question 4 1 Point Helen, Judy and Len run a bakery as a partnership. They have no written agreement and the only relevant term they have agreed orally is that they share profits in the ratio 1 (Helen) : 1 (Judy) : 2 (Len). Which one or more of the following is INCORRECT? Profits of £9,000 from the sale of a recipe book which the bakery has been selling will A be split £1,500 to Helen, £1,500 to Judy and £6,000 to Len. Any partner can dissolve the partnership immediately but only if they give notice in B writing. C Each partner is liable without limit for the debts of the firm. D Len can retire from the partnership if Helen and Judy agree. Question 5 1 Point Therese, Tim and Scarlet were partners until Therese left the business amicably, leaving Tim and Scarlet to carry on in partnership. There was no partnership agreement and the three partners shared profits equally. After Therese left the firm, the remaining partners ordered goods from Bramhope Limited but the invoice for those goods has not yet been paid. Bramhope had dealt with the firm on several occasions before Therese left the firm. Which one of the following is CORRECT? A Therese cannot be liable because the debt was incurred after she left the firm. Therese is not liable for the debt if at the time of her leaving she gave notice in the B London Gazette. https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…18_1/overview/attempt/_18418716_1?courseId=_69895894_1 17/11/2024, 14:46 Page 3 of 4  C Bramhope Limited can sue Therese for a maximum of 1/3 of the sum outstanding. Assume that at the time of her leaving Therese gave notice in the London Gazette. She later wrote to Bramhope Limited to give notice that she had left but the D company did not receive her letter until after the debt was incurred. Therese could become liable for the full debt. Additional content Drag and drop files here or click to add text. Questions Filter (5) Save and Close Submit https://elite.law.ac.uk/ultra/courses/_69895894_1/outline/as…18_1/overview/attempt/_18418716_1?courseId=_69895894_1 17/11/2024, 14:46 Page 4 of 4