Question Tag: Partnership Agreement

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BL – Nov 2011 – L1 – SB – Q5 – Partnership Law

Discussing the required minimum contents of a partnership agreement and legal considerations in a dispute.

Question

(a) “It is not necessary for any two or more persons who intend to enter into a partnership to enter into any formal agreement. Where, however, they decide to do so, such agreements must have certain minimum contents.”

State any SIX of these minimum contents. (6 Marks)

(b) Femi and Solape entered into an agreement to contribute equal amounts to buy books. They purchased the books and shared them between themselves for sale. Subsequent to the initial purchase, however, Femi purchased books alone. Solape demanded that she share equally with Femi the profit made from the sale of the books, but Femi refused on the ground that Solape had not contributed towards the purchase of the books. Solape threatened to institute a court action for one half of the profit made on the sale of the books, claiming a partnership agreement. The written agreement between them was for sharing of the books purchased, not for sharing of the profit.

You are required to advise the parties. (9 Marks)

Answer

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Tags: Business Law, Legal Contracts, Partnership Agreement, Profit Sharing
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SB – Q4 – Company Law

Understanding the principles of the Salomon vs Salomon & Co Ltd case, circumstances for lifting the veil of incorporation, and statutory terms of partnership agreements

Question

(a) Explain the legal principle(s) established in the case of Salomon vs Salomon Co. Ltd. (1897). (2 Marks)

(b) State FOUR circumstances when the veil of incorporation of a company may be lifted under statute. (4 Marks)

(d) State FIVE statutory terms of a Partnership Agreement as contained in Sections 24 and 25 of the Partnership Act 1890. (5 Marks)

Answer

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Tags: Company Law, Legal Personality, Lifting the Veil, Partnership Agreement
Level: Level 1

Topic: Company Law
Series: NOV 2011

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

Question

Segun and Sola went into partnership on 1 January 2009. The partnership agreement specifies that both partners should maintain Capital Accounts without Current Accounts. Each partner will be entitled to salary of N240,000 per annum and interest of 10% on capital at the end of the year. Profits and losses are to be shared equally after salaries and interest on capital have been taken into account.
Sola introduced capital of N1,000,000 on 1 January 2009 and N200,000 on 1 January 2010. He withdrew N360,000 from the business in 2009 and N480,000 in 2010.
Segun introduced capital of N400,000 on 1 January 2009. He withdrew N105,000 from the business in 2009 and N161,200 in 2010. The partnership did not keep proper books of accounts in 2009 and 2010.

However, the assets and liabilities of the partnership for the two years ended 31
December 2010 are as follows:

You are required to
Prepare in vertical format, the comparative Balance Sheets and Capital Accounts of the partners at the end of 2009 and 2010 based on the above information.

Answer

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Tags: Partnership Accounting, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts

Prepare a statement showing the sharing of profit in a partnership.

Question

Question:
b. Biggy and Smallie were in partnership, sharing profits and losses in the ratio 2:1. They agreed to admit Fanny into the partnership from January 1, 2014. Fanny is to introduce N140,000 out of which N130,000 is to be his fixed capital. He is to receive a commission of N30,000 per annum in addition to a share of profit. The new profit-sharing ratio is 2:2:1 to Biggy, Smallie, and Fanny, respectively. Other provisions of the Partnership Deed are:

i. Debit balance in current accounts at the beginning of the year is to attract 5% interest.
ii. Goodwill is valued at N150,000. Goodwill is not to be retained in the partnership books.
iii. Details of the existing partners’ fixed capital and current accounts for the purpose of the agreement are:

Partner	Fixed Capital (N)	Current Account (N)
Biggy	360,000	100,000
Smallie	240,000	60,000 (DR)

iv. The draft final accounts for the year ended December 31, 2014, before taking into account Fanny’s commission and interest on partners’ current accounts, revealed a profit of N347,000.
v. The drawings made by the partners are:

Partner	Drawings (N)
Biggy	95,000
Smallie	45,000
Fanny	73,900 (including commission)

Required:
Prepare a statement showing the sharing of profit of the partnership for the year ended December 31, 2014.

Answer

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Tags: Goodwill, Interest on Capital, Partnership Agreement, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2015

FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts

Identify events leading to changes in partnership agreements

Question

Which of the following events can lead to a change in a partnership agreement?

A. Introduction of additional capital by a partner
B. Establishment of a new marketing strategy
C. Admission of a new partner to the firm
D. Hiring of additional manager by the Partnership
E. Implementation of a new financial management system

Answer

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Tags: Business Management, Changes, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2023

BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations

Discuss the typical provisions in a partnership agreement and the steps required when a partner retires.

Question

a) What provisions should typically be contained in a Partnership Agreement? (10 marks)

b) Upon the retirement of a partner in a Partnership, after that partner had given notice to that effect to the other partners, describe the steps that ought to be taken by the remaining partners pursuant to the notice, in accordance with law. (10 marks)

Answer

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Tags: Company Law, Legal Requirements, Partnership Agreement, Retirement of Partners
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: MAY 2016

BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations

Advising on partnership liabilities and the consequences of breaching a partnership agreement.

Question

Adjato and Hilda are in partnership, providing forensic services to the Ghana Police Service. The partnership agreement states that all scientific equipment is to be supplied by Johnny and that neither partner may incur a liability of more than GH¢3,000 without consulting the other. Although Adjato contributed all the Firm’s initial capital, he does not have any active involvement and rarely visits its premises. Hilda receives a salary and works full-time for the Firm.

Required:
It has come to the notice of Adjato that Hilda has ordered GH¢5,000 worth of equipment from Barclays Ltd without consent by both parties. Advise Adjato. (10 marks)

Answer

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Tags: Breach of Agreement, Partnership, Partnership Agreement, Partnership Liability
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: MAY 2021

FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework

Identify key issues in a partnership agreement and advise on the accounting treatment of subsequent events.

Question

a) When two or more individuals come together to form a Partnership, it is advisable to have a correctly drafted Partnership Agreement carefully detailing the terms of the business relationship. A partnership agreement is a contract between partners in a partnership that sets out the terms and conditions of the relationship between the partners.

Required:
Identify and explain FIVE key issues that should be covered in a partnership agreement when setting up a partnership. (10 marks)

b) Ashiyie Ltd is a telecommunication company that prepares accounts in accordance with International Financial Reporting Standards (IFRS). A meeting of the Directors of Ashiyie Ltd is scheduled for 5 December 2017 to discuss the following matters with a view to finalizing the accounts for the year ending 30 October 2017:

i) A fire occurred in one of the warehouses of Ashiyie Ltd on 3 November 2017, destroying inventory that had a cost price of GH¢100,000 and a net realizable value of GH¢150,000.
ii) On 9 November 2017, Ashiyie Ltd received information that one of their largest customers had gone bankrupt. At 30 October 2017, this customer owed Ashiyie Ltd GH¢235,000. It is anticipated that Ashiyie Ltd can only receive 10 pesewas for every GH¢1 they were owed.
iii) In November 2017, Ashiyie Ltd sold inventory that had been in one of their warehouses for the past two years for GH¢75,000. This had been included in the financial statements, for the year ended 30 October 2017, at its cost price of GH¢105,000.
iv) On 30 October 2017, an employee of Ashiyie Ltd fell and injured her arm at work. This employee has commenced legal action. The Solicitors for Ashiyie Ltd informed the company on 10 August 2017 that it is probable they will be found liable and have to pay this employee GH¢33,000. The employee has worked for Ashiyie Ltd for the past four years.

Required:
Advise the board on the accounting treatment of these issues. Your answer should give a detailed reason for the accounting treatment that you have chosen. (10 marks)

Answer

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Tags: Accounting Treatment, IFRS, Partnership Agreement, Subsequent Events
Level: Level 1

Topic: Preparation of Partnership accounts, The IASB’s Conceptual Framework
Series: MAY 2018

BL – Nov 2011 – L1 – SB – Q5 – Partnership Law

Discussing the required minimum contents of a partnership agreement and legal considerations in a dispute.

Question

State any SIX of these minimum contents. (6 Marks)

You are required to advise the parties. (9 Marks)

Answer

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Tags: Business Law, Legal Contracts, Partnership Agreement, Profit Sharing
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SB – Q4 – Company Law

Understanding the principles of the Salomon vs Salomon & Co Ltd case, circumstances for lifting the veil of incorporation, and statutory terms of partnership agreements

Question

(a) Explain the legal principle(s) established in the case of Salomon vs Salomon Co. Ltd. (1897). (2 Marks)

(b) State FOUR circumstances when the veil of incorporation of a company may be lifted under statute. (4 Marks)

(d) State FIVE statutory terms of a Partnership Agreement as contained in Sections 24 and 25 of the Partnership Act 1890. (5 Marks)

Answer

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Tags: Company Law, Legal Personality, Lifting the Veil, Partnership Agreement
Level: Level 1

Topic: Company Law
Series: NOV 2011

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

Question

However, the assets and liabilities of the partnership for the two years ended 31
December 2010 are as follows:

You are required to
Prepare in vertical format, the comparative Balance Sheets and Capital Accounts of the partners at the end of 2009 and 2010 based on the above information.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Partnership Accounting, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts

Prepare a statement showing the sharing of profit in a partnership.

Question

Partner	Fixed Capital (N)	Current Account (N)
Biggy	360,000	100,000
Smallie	240,000	60,000 (DR)

Partner	Drawings (N)
Biggy	95,000
Smallie	45,000
Fanny	73,900 (including commission)

Required:
Prepare a statement showing the sharing of profit of the partnership for the year ended December 31, 2014.

Answer

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Tags: Goodwill, Interest on Capital, Partnership Agreement, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2015

FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts

Identify events leading to changes in partnership agreements

Question

Which of the following events can lead to a change in a partnership agreement?

A. Introduction of additional capital by a partner
B. Establishment of a new marketing strategy
C. Admission of a new partner to the firm
D. Hiring of additional manager by the Partnership
E. Implementation of a new financial management system

Answer

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Tags: Business Management, Changes, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2023

BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations

Discuss the typical provisions in a partnership agreement and the steps required when a partner retires.

Question

a) What provisions should typically be contained in a Partnership Agreement? (10 marks)

Answer

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Tags: Company Law, Legal Requirements, Partnership Agreement, Retirement of Partners
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: MAY 2016

BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations

Advising on partnership liabilities and the consequences of breaching a partnership agreement.

Question

Required:
It has come to the notice of Adjato that Hilda has ordered GH¢5,000 worth of equipment from Barclays Ltd without consent by both parties. Advise Adjato. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Breach of Agreement, Partnership, Partnership Agreement, Partnership Liability
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: MAY 2021

FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework

Identify key issues in a partnership agreement and advise on the accounting treatment of subsequent events.

Question

Required:
Identify and explain FIVE key issues that should be covered in a partnership agreement when setting up a partnership. (10 marks)

Required:
Advise the board on the accounting treatment of these issues. Your answer should give a detailed reason for the accounting treatment that you have chosen. (10 marks)

Answer

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Tags: Accounting Treatment, IFRS, Partnership Agreement, Subsequent Events
Level: Level 1

Topic: Preparation of Partnership accounts, The IASB’s Conceptual Framework
Series: MAY 2018

Question Tag: Partnership Agreement

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BL – Nov 2011 – L1 – SB – Q5 – Partnership Law

Discussing the required minimum contents of a partnership agreement and legal considerations in a dispute.

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q5 – Partnership Law"

BL – Nov 2011 – L1 – SB – Q4 – Company Law

Understanding the principles of the Salomon vs Salomon & Co Ltd case, circumstances for lifting the veil of incorporation, and statutory terms of partnership agreements

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q4 – Company Law"

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

You're reporting an error for "FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts"

FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts

Prepare a statement showing the sharing of profit in a partnership.

You're reporting an error for "FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts"

FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts

Identify events leading to changes in partnership agreements

You're reporting an error for "FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts"

BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations

Discuss the typical provisions in a partnership agreement and the steps required when a partner retires.

You're reporting an error for "BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations"

BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations

Advising on partnership liabilities and the consequences of breaching a partnership agreement.

You're reporting an error for "BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations"

FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework

Identify key issues in a partnership agreement and advise on the accounting treatment of subsequent events.

You're reporting an error for "FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework"

BL – Nov 2011 – L1 – SB – Q5 – Partnership Law

Discussing the required minimum contents of a partnership agreement and legal considerations in a dispute.

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q5 – Partnership Law"

BL – Nov 2011 – L1 – SB – Q4 – Company Law

Understanding the principles of the Salomon vs Salomon & Co Ltd case, circumstances for lifting the veil of incorporation, and statutory terms of partnership agreements

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q4 – Company Law"

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

You're reporting an error for "FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts"

FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts

Prepare a statement showing the sharing of profit in a partnership.

You're reporting an error for "FA – Nov 2015 – L1 – SB – Q5b – Partnership Accounts"

FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts

Identify events leading to changes in partnership agreements

You're reporting an error for "FA – Nov 2023 – L1 – SA – Q6 – Partnership Accounts"

BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations

Discuss the typical provisions in a partnership agreement and the steps required when a partner retires.

You're reporting an error for "BCL – May 2016 – L1 – Q7 – Alternative Forms and Constitutions of Business Organizations"

BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations

Advising on partnership liabilities and the consequences of breaching a partnership agreement.

You're reporting an error for "BCL – May 2021 – L1 – Q5b – Alternative Forms and Constitutions of Business Organisations"

FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework

Identify key issues in a partnership agreement and advise on the accounting treatment of subsequent events.

You're reporting an error for "FA – May 2018 – L1 – Q7 – Preparation of Partnership accounts | The IASB’s Conceptual Framework"

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