These questions come from our bank but are not in any of our paid exams. Try each one, then reveal the answer and the explanation.
Question 1
Elodie Brann, Callum Brodie and Ishani Sood carry on a bicycle sales and repair business in Kingston as partners. They have never signed a partnership agreement. Elodie and Callum want to admit Owen Riddell, an experienced mechanic, as a fourth partner, and they also want the shop to open on Sundays. Ishani opposes both proposals. Under the Partnerships Act, which of the following is correct?
A.Owen cannot be admitted without Ishani's consent, but the Sunday opening can be decided by Elodie and Callum as a majority.
B.Elodie and Callum, as a majority of the partners, can both admit Owen and decide on the Sunday opening over Ishani's objection.
C.Neither proposal can proceed without Ishani's consent, because every partnership decision requires the agreement of all partners.
D.Owen can be admitted by the majority, but a change to the shop's opening days needs the consent of all three partners.
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Answer: A. Owen cannot be admitted without Ishani's consent, but the Sunday opening can be decided by Elodie and Callum as a majority.
Absent an agreement, s. 24 of the Partnerships Act supplies the rules. Rule 7 provides that no person may be introduced as a partner without the consent of all existing partners, so Ishani can block Owen's admission. Rule 8 lets a majority of the partners decide differences on ordinary matters connected with the business, and Sunday opening hours are an ordinary matter, so Elodie and Callum can decide it. (B) Majority rule under rule 8 covers only ordinary matters; admitting a partner falls under the unanimity requirement in rule 7. (C) The Act does not require unanimity for every decision; rule 8 expressly allows majority decisions on ordinary matters. (D) This reverses the two rules: admission needs unanimity, while an ordinary operating decision such as opening days needs only a majority.
Question 2
Juniper Dental Supply Inc. is a corporation under the Business Corporations Act (Ontario) that is not an offering corporation. Its directors are calling a special meeting of shareholders. Under the Act, notice of the time and place of the meeting must be sent to each shareholder entitled to vote, each director and the auditor:
A.not less than 10 days and not more than 50 days before the meeting.
B.not less than 21 days and not more than 50 days before the meeting.
C.not less than 21 days and not more than 60 days before the meeting.
D.not less than 30 days and not more than 60 days before the meeting.
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Answer: A. not less than 10 days and not more than 50 days before the meeting.
Section 96(1) of the Business Corporations Act requires notice of a shareholders' meeting to be sent not less than 21 days before the meeting for an offering corporation and not less than 10 days for any other corporation, and in either case not more than 50 days before it, to each shareholder entitled to vote, each director and the auditor. Juniper is not an offering corporation, so the window is 10 to 50 days. (B) The 21-day minimum applies only to an offering corporation. (C) This combines the offering-corporation minimum with an outer limit the Act does not use; the maximum is 50 days. (D) Neither 30 days nor 60 days appears in s. 96(1).
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