ExpertHard1 markMultiple Choice
CPA · Question 35 · Area II: Business Law
Under the Revised Uniform Partnership Act (RUPA), absent an agreement to the contrary, how are profits and losses shared in a general partnership?
Under the Revised Uniform Partnership Act (RUPA), absent an agreement to the contrary, how are profits and losses shared in a general partnership?
Answer options:
A.
Equally among partners.
B.
In proportion to capital contributions.
C.
In proportion to time spent managing the business.
D.
Profits equally; losses in proportion to capital.
How to approach this question
Recall the default partnership rules: Equal rights, Equal profits.
Full Answer
A.Equally among partners.✓ Correct
A
Under RUPA, unless the partnership agreement states otherwise, all partners share profits and losses EQUALLY, regardless of their capital contributions or time spent.
Common mistakes
Assuming capital contributions dictate profit sharing (common in LLCs/Corps, but not the default for General Partnerships).
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