Mcq Law
SAMPLE MULTIPLE CHOICE QUESTIONS
QUESTIONS 1-3
Tricky, Esthero, and Macy decide to go into business together to promote new recording artists of alternative music genres, calling the business “Alternative Universe.” Assume for purposes of the following questions only, that they have chosen to operate the business as a general partnership, and that the partnership is formed in a jurisdiction that has adopted the Uniform Partnership Act (UPA). Tricky invested $1,000, Macy invested $9,000, and Esthero didn’t invest any capital. Macy also loaned the business an additional $50,000 to be paid back at a fixed interest rate over a period of five years.
1) Assume for purposes of this question only that the partnership agreement is silent as to how profits will be split. If the business makes profits in the first year, how will these profits be allocated among the three investors’ capital accounts?
a) They are each entitled to 1/3 of the profits, unless they agree otherwise.
b) Tricky is entitled to 10%, Macy 90%, and Esthero nothing, unless they agree otherwise.
c) They are each entitled to reasonable compensation for any work performed on behalf of the partnership.
d) Both a and c.
e) Both b and c.
2) Assume for purposes of this question only that Tricky, Esthero, and Macy initially agreed to split the profits 30%, 10%, and 60%, respectively, but their agreement was silent as to losses. If the business loses money in the first year, how would the parties share the loss.
a) They would each bear 1/3 of the loss.
b) Tricky would bear 10% of the loss, Esthero none of the loss, and Macy would bear 90% of the loss.
c) Tricky would bear 30% of the loss, Esthero 10%, and Macy 60%.
d) Macy would not have to share any of the loss until her loan is repaid.
e) None of the above.
3) Relations between Macy, Tricky and Esthero break down altogether. Macy is frustrated because
QUESTIONS 1-3
Tricky, Esthero, and Macy decide to go into business together to promote new recording artists of alternative music genres, calling the business “Alternative Universe.” Assume for purposes of the following questions only, that they have chosen to operate the business as a general partnership, and that the partnership is formed in a jurisdiction that has adopted the Uniform Partnership Act (UPA). Tricky invested $1,000, Macy invested $9,000, and Esthero didn’t invest any capital. Macy also loaned the business an additional $50,000 to be paid back at a fixed interest rate over a period of five years.
1) Assume for purposes of this question only that the partnership agreement is silent as to how profits will be split. If the business makes profits in the first year, how will these profits be allocated among the three investors’ capital accounts?
a) They are each entitled to 1/3 of the profits, unless they agree otherwise.
b) Tricky is entitled to 10%, Macy 90%, and Esthero nothing, unless they agree otherwise.
c) They are each entitled to reasonable compensation for any work performed on behalf of the partnership.
d) Both a and c.
e) Both b and c.
2) Assume for purposes of this question only that Tricky, Esthero, and Macy initially agreed to split the profits 30%, 10%, and 60%, respectively, but their agreement was silent as to losses. If the business loses money in the first year, how would the parties share the loss.
a) They would each bear 1/3 of the loss.
b) Tricky would bear 10% of the loss, Esthero none of the loss, and Macy would bear 90% of the loss.
c) Tricky would bear 30% of the loss, Esthero 10%, and Macy 60%.
d) Macy would not have to share any of the loss until her loan is repaid.
e) None of the above.
3) Relations between Macy, Tricky and Esthero break down altogether. Macy is frustrated because