CAS Bar Business Associations

Question 1

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

Accepted Answer

Profits are shared equally regardless of capital contribution

Answer

Profits are shared in proportion to capital contributions

Answer

Profits are shared according to time each partner devotes to the business

Answer

Profits are allocated by a court-determined fair distribution

Question 2

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?

Accepted Answer

Apparent authority

Answer

Express authority

Answer

Implied authority

Answer

Emergency authority

Question 3

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

Accepted Answer

Personally liable for all partnership debts and obligations

Answer

Liable only up to the amount of their capital contribution

Answer

Liable only for debts incurred during their active tenure

Answer

Shielded from personal liability by a charging order

Question 4

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

Accepted Answer

Elect to hold either the agent or the principal liable

Answer

Only sue the agent since the contract was with the agent

Answer

Only sue the principal since the agent was merely acting on behalf of another

Answer

Void the contract due to lack of full disclosure

Question 5

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

Accepted Answer

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

Answer

Formation documents are filed with the California Secretary of State

Answer

A written partnership agreement is signed by all partners

Answer

A Statement of Partnership Authority is recorded with the county

Question 6

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

Accepted Answer

Both the agent and the principal

Answer

Only the agent personally as the actual tortfeasor

Answer

Only the principal under respondeat superior

Answer

Neither, if the agent acted in good faith

Question 7

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

Accepted Answer

Admitting a new partner to the partnership

Answer

Hiring an employee for ordinary business operations

Answer

Opening a bank account in the partnership name

Answer

Entering a routine supply contract in the ordinary course of business