1997 Agency & Partnership Final Examination

AGENCY & PARTNERSHIP

Section I, Professor Franks

Final Examination, Fall 1997

GENERAL INSTRUCTIONS

1. Carefully analyze the facts and grasp the issues in each question before beginning to write. Spend time reading the question slowly and carefully.

2. State the issues and answers to each question concisely. Lengthy answers are not necessary.

3. Do not repeat questions in your answers. Write neatly and legibly on BOTH SIDES of each page.

4. Number your answers to correspond with the question, e.g., "II-B."

5. If you feel it necessary to assume additional facts in any of the questions, give the facts that must be added and state why.

6. Do not write in the margin of the book.

7. All major questions are equally weighted unless otherwise indicated. Subparts are approximately equal but may be weighted slightly differently according to the number of issues involved in that subpart.

8. Write your pin number and the name and section number of the course on which you are being examined on the cover of each examination book.

9. If you use more than one book, indicate "Book One," "Book Two" and so forth on the cover of each book and write your fictitious name and number and the name and section number of the course on the cover of each examination book.

10. A GOOD ANSWER IS NOT NECESSARILY A LONG ANSWER.

QUESTION I

23.6 per cent of test

You have now graduated from Southern University Law Center with a Juris Doctor degree, passed the Louisiana bar exam on first try, and gone into practice sharing offices with two other Southern graduates here in Baton Rouge.

The East Baton Rouge Parish Public Library has invited you to give a lecture to a group calling itself "Seniors for Success," consisting of retirees interested in learning how to organize a small business. Anxious to network among potential clients, you gladly will go.

After you deliver your brilliant talk, the following questions are asked from the audience. Answer them, and discuss each item.

A. What is a partnership?

B. Briefly, what is the difference between a general partnership, a limited partnership, a limited liability partnership, and a limited liability company? Do not discuss tax considerations.

QUESTION II

22.6 per cent of test

Smith, Brown and Jones orally formed a general partnership on 1 November 1997, calling it "Baton Rouge Pizza Co." On 5 November 1997, they purchased an abandoned Pizza Hut on Nicholson Drive (the Nicholson site), and the act of sale shows the purchaser and new owner to be Baton Rouge Pizza Co.

On 10 November 1997, Smith, Brown and Jones executed a written partnership agreement.

On 14 November 1997, the trio purchased an abandoned Pizza Hut on Plank Road (the Plank Road site), and the act of sale once again shows the purchaser and new owner to be Baton Rouge Pizza Co.

On 20 November 1997, the trio registered their written partnership agreement in the proper place.

On 25 November 1997, the trio purchased an abandoned Pizza Hut on Harding Boulevard (the Harding site), and the act of sale yet again shows the purchaser and new owner to be Baton Rouge Pizza Co.

The acts of sale on each of the three immovables were recorded with the East Baton Rouge Parish Clerk of Court, each act being recorded on the very day of that particular sale.

Please answer the following six questions directly and without discussion:

A. Where did the three partners file their contract of partnership for registry, assuming they filed it "in the proper place"?

B. Who now owns the Nicholson site?

C. Who now owns the Plank Road site?

D. Who now owns the Harding site?

E. Assume further that one of the partners (Jones) was sued on personal and individual debts unrelated to the partnership, and that on 28 November 1997 a judgment was rendered against Jones for $250,000. Which property or properties can the judgment creditor seize directly without any necessity for first seizing the partner's interest in the partnership?

F. Assume the partnership, Baton Rouge Pizza Co., now wishes to sell hamburgers as well, to that end buying a vacant BurgerTyme site on Government Street. They wish to call this one restaurant "Baton Rouge Burger Co." Looking for the simplest legal solution to their need, simply state (without discussion) what document they must file and where they must file it in order to be able to use this name.

QUESTION III

22.6 per cent of test

Answer each of the following eight lettered sub-parts by identifying one (or two if requested) of the following business forms, indicating which one (or two if requested) of the following business forms applies. No discussion is necessary. Just write the letter of the sub-part and the relevant type of organization, for example, "K -- limited liability company."

sole proprietorship
general partnership
limited partnership [partnership in commendam]
limited liability partnership
limited liability company
subchapter S corporation

A. Which one of the above business forms is characterized by a need to renew its status yearly?

B. Which one of the above business forms may have as few as just one general partner?

C. Which one of the above business forms is an unincorporated entity that may or may not qualify for partnership tax treatment, depending on which features are selected and set out in the organizing document?

D. Which two of the above business forms generally can cross state lines without qualifying to do business?

E. Which one of the above business forms is simply an add-on feature that may be added to either a general partnership or a limited partnership?

F. Which one of the above business forms invariably protects each member of the firm from tort liability (not contract liability) for those torts committed by other members of the firm?

G. Which one of the above business forms requires the filing with the IRS of an election to be taxed as a partnership?

H. Which one of the above business forms must have at least one member (perhaps more) subject to unlimited contractual and tort liability?

QUESTION IV

31.2 per cent of test

A. List the ways in which an agency terminates.

B. List those activities that will subject a limited partner to unlimited liability.

C. List those activities that a limited partner may do without losing status as a limited partner.

D. Name the three "wicked sisters" that employers' liability statutes and workers' compensation statutes were intended to eliminate.

E. In workers' compensation, what is a "statutory employer"?

F. List as many factors as you can that a court will take into consideration in determining whether a person is an "employee" or an independent contractor. Put the single most important factor first on your list.

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