ID Bar Business Associations 2

Question 1

Under Idaho partnership law, the dissolution of a general partnership occurs upon:

Accepted Answer

An event that makes it unlawful to carry on the partnership business, or judicial dissolution

Answer

Under Idaho's UPA (2013), dissolution is triggered by specific events such as illegality, court order, or partner dissociation where the agreement does not require continuation — the partnership does not automatically dissolve on one partner's departure if the agreement provides otherwise.

Question 2

In an Idaho limited partnership, which of the following is true regarding a limited partner's liability?

Accepted Answer

Limited partners are liable only up to their capital contribution, provided they do not participate in control

Answer

Under Idaho's LP Act, a limited partner's liability is generally capped at their capital contribution, though excessive participation in control may expose them to additional liability under older case law.

Question 3

Under agency law, an agent acting within the scope of authority binds the principal to a contract with a third party. If the agent exceeds their authority, the principal may still be bound under:

Accepted Answer

Both apparent authority and ratification

Answer

A principal can be bound despite an agent's lack of authority through apparent authority (reasonable third-party belief) or through ratification (principal later approves the act with knowledge of material facts).

Question 4

Under Idaho corporate law, which of the following transactions typically requires shareholder approval?

Accepted Answer

A merger or sale of substantially all corporate assets

Answer

Fundamental corporate transactions such as mergers, consolidations, and sales of substantially all assets generally require shareholder approval under Idaho's Business Corporation Act.

Question 5

A shareholder's derivative suit in Idaho allows a shareholder to:

Accepted Answer

Bring a claim on behalf of the corporation for wrongs done to the corporation when the board refuses to act

Answer

A derivative suit is brought by a shareholder on behalf of the corporation to enforce a corporate cause of action when the board wrongfully refuses to do so — any recovery belongs to the corporation.

ID Bar - Idaho Bar Exam Practice Test

ID Bar - Idaho Bar Exam Practice Test

ID Bar Business Associations 2