[Partnership Agreement] Rufus, Sven, and Igor Are Partners in a Health

question 18

Multiple Choice

[Partnership Agreement] Rufus, Sven, and Igor are partners in a Health Club. They executed a partnership agreement ten years ago. Rufus and Sven want to grow the company and approach Igor with their ideas. First, they want to add two partners into the partnership who have extensive capital. Second, they want to move the club into a new direction, by adding a restaurant and a casino. Third, they want to purchase new exercise equipment from SportsCo. Igor doesn't want to add new partners and despises the idea of adding the restaurant and casino. Igor agrees that new equipment is needed, but insists they continue to purchase equipment from HealthCo. Rufus and Sven tell Igor, that he's outvoted and also tell him they want to revise the partnership agreement's provision regarding mandatory retirement.
-Can Rufus and Sven move forward with the purchase of new equipment from SportsCo, over Igor's insistence on purchasing the equipment from HealthCo?

• A) Yes, because most partnership decisions are made by majority vote and this decision does not involve an alteration in the nature of the business.
• B) No, because decisions that involve an alteration in the nature of the business require a unanimous vote.
• C) No, although most partnership decisions are made by majority vote, this decision involves an alteration in the nature of the business.
• D) Yes, but only if all material facts about the restaurant and casino have been disclosed to Igor.
• E) No, alterations to the nature of the business require a unanimous vote.

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Definitions:

Planning Budget

An estimate of future income and expenditures that is used as a guideline for financial planning and decision-making.

Total Fixed Cost

The sum of all costs that do not change with the level of output produced, such as rent, salaries, and insurance.

Patient-Visits

A measure in healthcare indicating the number of individual patient interactions or consultations with healthcare professionals.

Personnel Expenses

Costs associated with employing personnel, including salaries, benefits, and payroll taxes.