(TEMPLATE) Barrister/Solicitor Practice Exam B - Questions
Business Law
1. Harold and Linda form a limited partnership in Ontario to invest in an urban condominium development. Linda is listed as the general partner and manages the business, while Harold is named as a limited partner and contributes $250,000 in capital. When the partnership defaults on payments to a contractor, the contractor sues both Harold and Linda for the full amount. Harold argues he should not be personally liable because he did not participate in management and only provided funding. The contractor claims that all partners in a business are equally liable unless incorporated. Linda acknowledges Harold’s limited role but refuses to indemnify him. Harold seeks legal advice on his exposure.
Which of the following best describes Harold’s liability?
A) Harold is fully liable as a partner regardless of his role.
B) Harold is a limited partner and liable only up to his at-risk contribution.
C) Harold is a passive investor and not liable for any business debts.
D) Harold is protected from liability unless the partnership agreement states otherwise.
2. Michael, a corporate lawyer, was retained by a client to advise on complex international tax structuring for a business expansion. Michael had no prior experience with international taxation but attempted to handle the matter without consulting a specialist. Several months later, the client faced significant penalties due to errors in the tax plan.
What professional responsibility principle did Michael most clearly violate?
A) Duty to avoid conflicts of interest by advising both shareholders and directors.
B) Duty to act diligently by responding to client inquiries promptly.
C) Duty to recognize limitations in competence and either associate with an expert or decline the retainer.
D) Duty to prioritize the client’s instructions even if beyond his expertise.
3. Rina, a junior member of a consulting partnership, receives a guaranteed salary and a small share of firm profits. She has no voting rights and is excluded from strategic decisions. For tax purposes, the firm classifies her as a partner. Rina is audited and disputes this classification, claiming she is effectively an employee. The CRA reviews the firm’s structure and compensation policies.
Which of the following factors is most relevant in determining Rina’s status?
A) Whether she shares in profits and bears risk of loss.
B) Whether she has access to the firm’s financial records.
C) Whether she refers to herself as a “partner” on her business cards.
D) Whether she was introduced by a vote of the senior partners.
4. Adriana transfers machinery with a fair market value (FMV) of $100,000 and an adjusted cost base (ACB) of $70,000 to her new CCPC in exchange for common shares. She and the corporation jointly elect under s. 85 of the ITA to set the elected amount at $70,000. No boot or other consideration is received. Two years later, she sells the shares for $150,000. Adriana now wonders when the deferred gain from the machinery will be realized.
What is the most accurate tax consequence of the rollover and share sale?
A) The $30,000 deferred gain is immediately taxable upon transfer.
B) The deferred gain is permanently exempt under s. 85.
C) The deferred gain is realized when Adriana sells the shares of the corporation.
D) The gain is taxable only if the asset is depreciable.
5. Mei, a financial advisor, receives a request from CRA under s. 231.2 of the ITA for client information related to certain offshore transactions. The request does not identify any specific clients but asks for general data on those with foreign investment accounts. Mei believes the request is improper, as it targets unnamed persons. CRA insists the request is valid under its audit authority.
Which of the following best describes CRA’s obligations when seeking information on unnamed persons?
A) CRA has full authority to request data without limitation.
B) CRA must obtain consent from each affected taxpayer.
C) CRA must first obtain judicial authorization before requiring information on unnamed persons.
D) CRA can request such information only during criminal investigations.
6. Jason is updating a shareholder agreement and stores the working version on a USB drive he carries between home and office. He does not use encryption or password protection. One day, the USB is lost during his commute. The agreement contains sensitive business data and personal identifiers.
What duty of technological competence did Jason breach?
A) He failed to include a non-disclosure clause in the agreement.
B) He failed to notify the Law Society of the incident.
C) He failed to implement basic safeguards to protect client information.
D) He failed to obtain a limited-scope retainer.
7. Paul, a business lawyer, was representing a corporate client in a complicated commercial acquisition. During negotiations, opposing counsel made an error in the draft agreement that materially benefited Paul’s client. Paul was aware of the mistake but decided not to correct it, believing it was not his role to assist the other side. After closing, the mistake was discovered, leading to a dispute. What professionalism principle did Paul most likely violate?
A) Paul was entitled to exploit the mistake because his duty of loyalty to his client outweighed any other concern.
B) Paul acted properly because he was not responsible for the other lawyer's error.
C) Paul breached his duty to act in good faith and with integrity when dealing with other lawyers.
D) Paul had no obligation because there was no fiduciary duty to opposing counsel.
8.
9.
10. PR
11.
12.
13.
14. PR
15. PR
16.
17.
18. PR
19.
20.
21. PR
22. PR
23.
24.
25.
26. PR
27.
28. PR
29.
30. PR
31. PR
32. PR
33. PR
34.
35. PR
36.
37. PR
38.
39.
40.
41. PR
42.
43. PR
44.
45.
46.
47. PR
48.
49.
50.
51.
52. PR
53. PR
54.
55. PR
56.
57.
58.
59. PR
60. PR
Estate Planning
61. C
62. PR
63. PR
64. PR
65.
66.
67.
68. PR
69.
70.
71.
72.
73. PR
74. PR
75.
76.
77. PR
78.
79.
80. PR
81.
82. PR
83. PR
84.
85. PR
86.
87. PR
88.
89.
90.
91. PR
92. PR
93. PR
94.
95.
96.
97. PR
98.
99.
100. PR
101.
102.
103.
104.
105. PR
Real Estate
106. C
107. f
108. PR
109. PR
110.
111. PR
112.
113.
114. PR
115.
116. PR
117.
118.
119.
120. PR
121.
122.
123. PR
124. PR
125. PR
126.
127.
128.
129. PR
130.
131.
132. PR
133.
134.
135. PR
136.
137. PR
138.
139.
140. PR
141.
142.
143.
144. PR
145.
146. PR
147.
148. PR
149.
150. PR
151. PR
152.
153. PR
154. PR
155.
156.
157.
158. PR
159.
160.