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LAW > c6 > Flashcards

c6 Flashcards

1
Q

sole trader - types of charges

A

fixed - not floating

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2
Q

co - types of charges

A

fixed and floating

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3
Q

sole trader - liability

A

unlimited liability. business is not a separate legal entity

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4
Q

min number of partners in a p’ship

A

2

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5
Q

what must a p’ship be doing?

A

carrying out a business NOT holding co

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6
Q

what is the aim of a p’ship? what can the aim not be

A

aim: profit making
cannot be the aim: business experience

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7
Q

how do partners split profits?

A

equally - unless stated otherwise in a p’ship agreement

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8
Q

can partners have salaries?

A

no

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9
Q

partnership agreement/deed - is this requierd?

A

no - if there is not one in place, follow p’ship act

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10
Q

what is the nature of the relationship of a partner to a p’ship?

A

fiduciary
-act in good faith
-not to exercise a legal right over an improper motive
-not to keep profits from other partners (unless consent given)
-avoid conflicts of interest without full disclosure

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11
Q

what happens if a partner breaches their fiduciary duties?

A

may render the partner liable

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12
Q

partnership: profots/losses

A

shared equally

p’ship deed stats profit share but not loss share = share same as profit ratio

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13
Q

partnership: capital deficiency

A

shared amongst partners not in loss ratio but in ratio to amounts of capital they originally contributed

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14
Q

partnership: mgmt

A

every partner entitled to take part in mgmt decisions

ordinary mgmt decisions: majority of partners

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15
Q

partnership: change in business

A

any decision in changing the nature of the business = unanimous

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16
Q

partnership: new partners

A

unanimous

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17
Q

partnership: variation to p’ship agreement/deed

A

can be varied with unanimous consent of all partners

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18
Q

partnership: imdenify

A

all partners must be compensated for liabilities incurred in the ordinary and proper conduct of the business (ie expenses paid back)

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19
Q

partnership: renumeration

A

no partner is entitled to salary (they get split of profits)

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20
Q

partnership: interest on capital

A

per p’ship law: no interest on capital (allowed if in p’ship agreement)

BUT extra capital = 5% interest

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21
Q

partnership: records and accoutns

A

all partners have access

must be kept at main place of business

22
Q

partnership: expulsiojn

A

expulsion = majority of partners BUT good faith + good reason

23
Q

partnership: dissolution

A

authority of partners after dissolution continues so far is necessary to wind up the p’ship affairs/complete transactions

on dissolution - any partners can insist on realization of assets/payment debts/distribution of surplus

24
Q

partnership: liabilty

A

joint + severly liable for acts of fellow partners

someone can sue: partner A, partner B or both

25
Q

partnership: agent rule

A

agent unless

-no authority to act for the firm AND third party knows he has no authority/does not believe him to be a partner (perception of 3rd party is key)

-if a partner pledges the credit of a firm for a purpose unrelated to the firms ordinary business: the firm will not be bound unless the partner has express authority to do so

26
Q

partnership: debts incurred before joining

A

not liable

27
Q

partnership: debts incurred whilst partner

A

liable

28
Q

partnership: debts incurred after retirement but incurred whilst partner

A

liable

29
Q

partnership: debts incurred after retirement

A

not liable UNLESS:

  • 3rd party is unaware they have retired

they need to:
-notify ALL creditors
-change letterhead

30
Q

partnership: dissolution per p’ship act (if not agreement in place) - in what instances:

A

-death/retirement of a partner
-expiry of a fixed term partnership
-completion or termination of a single joint venture
-subsequent illegality
-notice given by a partner if it is a p’ship of indefinite duration
-order of the court

31
Q

partnership: default of partnership - what can creditors do?

A

can take action against individual partners OR the p’ship

32
Q

LLP - difference to partnership:

A

limited liability (separate legal Co) BUT more regulation

33
Q

LLP - incorporation doc is signed by how many members?

A

2 members

34
Q

LLP - what info needs to be submitted to CH?

A

-name of LLP
-location of registered office
-address of registered office
-names + addresses of all members of LLP
-names of 2 designated members who are responsible for signing nptices aand accounts and delivering to registra
-registration fee

35
Q

does an LLP need an agreement?

A

no - if there dont have one they follow LLP Reg 2001

36
Q

do LLP agreements need to be filed with registrar?

A

no

37
Q

LLP - dissolution - how

A

voluntary arrangement

appoint a liquidator: voluntary or compulsory

-go into administration

38
Q

LLP dissolution - difference to companies:

A

withdrawals made by members < 3 yrs prior can be clawed back if can be shown they knew about insolvency

past and present members may be required to contribute to the assets of the LLP to the extent that they have done so in their LLP agreement

39
Q

partnership: charges

A

fixed

40
Q

LLP charges

A

fixed + floating (it is a Co)

41
Q

partnership - conflicts of interest

A

fidiciary duty to the partnership - avoid conflicts of interest without full disclosure

42
Q

partner - usual acts for the normal course of the business BUT no authority

A

p’ship is still bound UNLESS: TP knew they had no authority OR does not know/believe them to be a partner

43
Q

partnerships - did they get dissolved?

A

yes - can be wound up in the same way as an unregistered company

44
Q

partnerships - why would they get dissolved?

A

-death/retirement of partner (usually changed in the agreement)

-order by court

-expiry of a fixed term p’ship

-subsequent illegality

-notice given by a partner if it is a p’ship of indefinite duration

-completion/termination of a JV

45
Q

do LLPs need formal p’ship agreement?

A

no

46
Q

do p’ships need formal formal f’ship agreement?

A

no

47
Q

T or F = an LLP must have at least one member whose liability is unlimited

A

false = liability of every member is limited

48
Q

do partnerships or LLPs need to submit confirmation statements to the registrar of companies?

A

partnerships - no

LLPs - yes

49
Q

(1) Voluntary arrangement
(2) Administration
(3) Voluntary liquidation
(4) Compulsory liquidation

which are applicable to LLPs?

A

all of them!!

50
Q

are partnerships required to have a secretary?

A

no - only public Co are required to have secretaries

51
Q

when does a p’ship begin?

A

when the partners agree to conduct their business activity together - this may be before trade begins!

52
Q

minimum number of partners subscribed onto an incorporation document

A

min = 2 designated members - responsible for signing notices and accounts and delivering them to the registrar

LAW (22 decks)

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