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The following code:
 class TestServer(BaseManager):pass
 Server_1=TestServer(address=("127.0.0.1",55555),authkey="passkey")
produces following error in python 3.2 :
"TypeError: string argument without an encoding"
The cause is in BaseManager constructor implementation (Python32\Lib\multiprocessing\managers.py):
self._authkey = AuthenticationString(authkey)
The "AuthenticationString" class is a substitute of "bytes" class, and 
"bytes" class requires second encoding argument, if first argument is a string.
I've solved this problem, changing the code in "Python32\Lib\multiprocessing\managers.py" to following:
 if isinstance(authkey,str):
 self._authkey = AuthenticationString(authkey,'utf-8')
 else:
 self._authkey = AuthenticationString(authkey)
This works for me. Please consider to fix this issue in release.

Thanks for the report.
I'm not familiar with multiprocessing, so I'll have to leave it to someone else to judge the fix.
We use 'crash' to indicate a segfault in the Python interpreter, so I'm changing the type to 'behavior' (that is, a normal bug).

You could just do
 Server_1=TestServer(address=("127.0.0.1",55555),authkey=b"passkey")
so this is probably a documentation issue. The examples in the documentation should at least be updated.

New changeset 636f75da4b9e by Richard Oudkerk in branch '3.2':
Issue #14501: Clarify that authentication keys are byte strings
http://hg.python.org/cpython/rev/636f75da4b9e 

I have fixed the documentation and examples to say that authentication keys are byte strings.