Stan and Frank Have Started a General Partnership

question 33

Multiple Choice

Stan and Frank have started a general partnership.Stan has contributed 95% of the startup capital and has the business experience and contacts while Frank's primary contribution is 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.They have no formal written partnership agreement.

• A) Stan is entitled to $95,000 and Frank gets $5,000
• B) RUPA mandates that each get $50,000
• C) RUPA mandates that Frank be paid a fair amount for his labor contribution and the remaining profits be split with 95% going to Stan and 5% going to Frank
• D) RUPA mandates that Frank be paid a fair amount for his labor contribution and the remaining profits be split equally between Stan and Frank

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Definitions:

Statute Violation

An act or omission that goes against a law enacted by a legislative body, potentially leading to legal penalties.

Enforced Agreements

Contracts or legal agreements that are recognized by law as valid and are subject to enforcement through legal processes.

Legislature

A government agency authorized to create, modify, and abolish regulations within a specified territory.

Divisible

Characterized by being capable of division or separation into distinct and independent parts or portions.