4) Ending Flashcards
(24 cards)
affect of rules on LLP
generally the same – LLP is a GP for all purposes except liability
power vs right to dissociate
power: always have
right: only have right to dissociate if not wrongful, if you wrongfully dissociate liable for breach (damages caused by dissociating)
power to dissociate: when
nonwaivable right of every GP or LP
can be exercised any time
power to dissociate: how
give notice to the partnership of express will to withdraw
right to dissociate
depends on terms of partnership
if partnership is for a definite term or undertaking, NO rightful dissociating before it’s complete
events that cause a partner’s dissociation
1) death
2) bankruptcy
3) appointment of guardian for the partner
4) judicial determination that partner is incapable of performing the duties of partner
5) occurrence of an event specified in the partnership as triggering partner’s dissociation
6) expulsion
dissociation by bankruptcy / definite term or undertaking
wrongful –> liable for damages
dissociation by expulsion: ways
1) per terms of agreement
2) unanimous vote of other partners
3) judicial determination
rules for dissociation of limited partners
very similar – inc. no right to dissociate before term of limited partnership
rights of general partners in an limited partnership to dissociate
less – in a general partnership, the GP can dissociate by express will before partnership ends, if it’s at will
but in limited partnership no right to dissociate until end of the LP
results of dissociation: what partnership must do
1) wind up business w/in 90 days, OR
2) buy out the interest of the dissociated partner
results of dissociation: partner’s rights/duties
1) no more right to manage
2) no more duty of loyalty/care (for future things)
3) ok to compete now
4) still liable for anything that happened before dissn
partnership dissolved by court: How
individual partner can file application with court to dissolve
partnership dissolved by court: when will court grant
ONE OF THESE:
1) economic purpose of partnership is likely to be unreasonably frustrated, OR
2) carrying on of business in confomrity w the partnership agreement would not be reasonably practicable, OR
3) carrying on of business in partnership w particular partner no longer reasonably practicable bc conduct
more ways partnership can dissolve
1) becomes unlawful to carry out business
2) upon occurrence of event specified in partnership agreement
ways partnership can dissolve: PARTNERSHIPS AT WILL ONLY
partnership has notice of express will to dissolve (not just dissociation by other means) from 50%+ of the partners within 90 day period
ways partnership can dissolve: PARTNERSHIPS FOR A DEFINITE TERM OR PARTICULAR UNDERTAKING only
will dissolve automatically 90 days after wrongful dissociation of a partner (INCLUDING by death or bankruptcy), UNLESS majority of partners agree to continue
2) completion of undertaking or expiration of term
3) unanimous consent of all partners
dissolution of limited partnership: last GP or LP leaves
needs both a GP and an LP
if last of either one leaves,
–before 90 days pass MAJORITY (more than half) must conset to continue and admit 1+ replacement partner of the kind needed
dissolution of a limited partnership: A GP leaves but not the last one
will dissolve if, w/in 90 days of dissociation, majority CONSENT to dissolution
more ways limited partnership can dissolve
1) event specified in partnership agreement
2) all GPs, and majority of LPs, consent
3) court order
results of partnership dissolving
continues only to wind up, then terminates
who participates in winding up
only GPs who have not dissociated
how assets distributed in winding up
1) outside creditors
2) creditors who are also partners
3) return capital contributions to partners
4) allocate profits/losses
how assets distributed in winding up: what if it’s not enough?
each partner jointly and severally liable for the whole debt wrt outside world
can seek contributions from each other for shares
