Stanton and Francesca Have Started a General Partnership

question 31

Multiple Choice

Stanton and Francesca have started a general partnership.Stanton has contributed 95 percent of the start-up capital and has the business experience and contacts,while Francesca's primary contribution is the labor necessary to operate the business.Management decisions are jointly made.At the end of the year,the business has shown a $100,000 profit.Stanton and Francesca have no formal written partnership agreement.

• A) Stanton is entitled to $95,000, and Francesca gets $5,000.
• B) The RUPA mandates that each get $50,000.
• C) The RUPA mandates that Francesca be paid a fair amount for her labor contribution and the remaining profits be split with 95 percent going to Stanton and 5 percent going to Francesca.
• D) The RUPA mandates that Francesca be paid a fair amount for her labor contribution and the remaining profits be split equally between Stanton and Francesca.

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Definitions:

Arbitration Costs

The expenses associated with resolving disputes through arbitration, including fees for arbitrators, administration, and sometimes legal representation.

Federal Rules

Regulations and procedures established by federal law that govern legal processes in U.S. federal courts.

Arbitration Agreement

A contract in which parties agree to resolve disputes through arbitration rather than litigation in courts.

Brazilian Civil Code

The primary source of civil law in Brazil that addresses matters of personal rights and of civil and commercial obligations.