Free SERIES 7 Exam Braindumps (page: 44)

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Which of the following is not prohibited of a general partner?

  1. acting in such a way as to impede the orderly business of the partnership
  2. buying or selling assets of the partnership except to foster the business of the partnership
  3. competing in any way with the partnership
  4. accepting compensation from any other partnership

Answer(s): D

Explanation:

accepting compensation from any other partnership. A general partner may be the partner is more than one partnership.



As a general rule, when a partnership is terminated, in what order are assets distributed?

  1. general creditors, secured lenders, limited partners, general partners
  2. secured lenders, limited partners, general creditors, general partners
  3. secured lenders, general creditors, limited partners, general partners
  4. general creditors, general partners, limited partners, secured lenders

Answer(s): C

Explanation:

secured lenders, general creditors, limited partners, general partners. Creditors first, in order of their security, then partners. General partners are last.



Which of the following will not result in termination of a limited partnership?

  1. transfer of ownership of a limited partnership interest
  2. sale or transfer of partnership assets
  3. majority vote of the limited partners to end the partnership
  4. arrival of the termination date established in the partnership agreement

Answer(s): A

Explanation:

transfer of ownership of a limited partnership interest. Transfer of ownership does “not” result in automatic termination.



Creditors whose claims are not settled upon dissolution of a limited partnership may seek recourse from:

  1. the general partner’s profits
  2. the general partner’s personal assets
  3. the partnership’s income
  4. the personal assets of the limited partners

Answer(s): B

Explanation:

the general partner’s personal assets. When a partnership no longer has assets, but does have debts, creditors may look to the personal property of the general partner.






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