Question 1
Which of the following is correct with respect to partnership?
◦ General partners have unlimited liability.
◦ Partners are not agents for each other.
◦ A partnership can be made up of only limited partners.
◦ General partners have limited liability.
◦ Partnership is a separate legal entity.
Question 2
Which one of the following statements is correct with respect to the liability of partners?
◦ When a partner enters into a partnership arrangement, she can only lose what she has invested in that partnership.
◦ A partner can protect herself from any liability beyond her investment if one of the other partners specifically agrees in the partnership agreement to be responsible for all such liability.
◦ If there are three equal partners in a partnership, an injured third party can only collect one-third of the claim from any one partner.
◦ A general partner is responsible, independent of what she has invested, for any losses caused to outsiders through the partnership business if the assets of the partnership are not enough to cover the claim.
◦ If a third party is injured because of an activity carried on by the partnership, that third party can only go after the personal assets of a partner if the assets of the partnership are not enough to provide compensation and the damage was actually caused by the conduct of that partner.
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