Business Associations Flashcards

Under the California Uniform Partnership Act, what is the default rule for sharing profits among partners when no agreement exists?

Answer: Profits are shared equally regardless of capital contribution

Under California's Uniform Partnership Act, absent an agreement to the contrary, partners share profits equally regardless of their respective capital contributions.

Which type of agency authority arises from a principal's conduct that leads a third party to reasonably believe the agent is authorized to act?

Answer: Apparent authority

Apparent authority arises when the principal's words or conduct reasonably lead a third party to believe the agent has authority, even if actual authority is absent.

Under California law, a general partner in a limited partnership is:

Answer: Personally liable for all partnership debts and obligations

General partners in a limited partnership bear unlimited personal liability for all debts and obligations of the partnership, distinguishing them from limited partners.

Under the undisclosed principal doctrine in agency law, once the principal's identity is revealed, the third party may:

Answer: Elect to hold either the agent or the principal liable

When a principal is undisclosed, the third party may elect to pursue either the agent or the principal upon discovering the principal's identity, but cannot recover from both.

Under the California Uniform Partnership Act, a general partnership is formed when:

Answer: Two or more persons carry on a business for profit as co-owners

A general partnership is automatically formed when two or more persons carry on a business for profit as co-owners, without requiring any formal filing or written agreement.

When an agent commits a tort while acting within the scope of employment, who is liable to the injured third party?

Answer: Both the agent and the principal

Under respondeat superior, both the agent (as the direct tortfeasor) and the principal are jointly and severally liable for torts committed within the scope of employment.

Under California's Uniform Partnership Act, which of the following actions requires the unanimous consent of all partners absent a contrary agreement?

Answer: Admitting a new partner to the partnership

Admitting a new partner requires the unanimous consent of all existing partners under California's Uniform Partnership Act, as it fundamentally alters the partnership composition.