BUSINESS LAW 1 Flashcards
(16 cards)
What happens to a general partnership upon the death of a partner?
The partnership will automatically end unless the partnership agreement contains provisions to the contrary.
Can partners expel other partners in the absence of an expulsion provision in the partnership agreement?
No, partners do not have a right to expel other partners if the partnership agreement does not provide for expulsion.
How is an LLP different from a limited company in terms of taxation?
An LLP is not a taxable person and does not pay corporation tax; members are taxed individually for income tax.
What is express actual authority in a partnership?
Express actual authority is the authority that partners expressly agree a partner has, which can be granted in the partnership agreement or by majority vote.
Can a partner withdraw from a partnership at any time?
Yes, a partner may withdraw at any time by giving notice to the other partners, bringing the partnership to an end.
What is required for the introduction of a new partner in a partnership?
Unanimity is required unless the partnership agreement provides otherwise.
What constitutes the formation of a partnership?
A partnership is formed when two or more persons carry on a business for profit without creating any other business entity.
What must a partner do if they compete with the partnership business without consent?
The partner must account to the partnership for all profits made in that business.
What rights does a partner have under the Partnership Act 1890?
A partner has the right to participate in the management of the partnership.
How are losses treated in a partnership if profits are shared unequally?
Remaining losses will be paid by the partners in proportion to which they were entitled to share profits.
Is a partner’s right to a share of profits assignable?
Yes, a partner’s right to a share of the profits is assignable.
What happens to partnership property upon dissolution?
Partnership property is applied to pay debts, and surplus assets are paid to partners after deductions.
What must a partner do to retain profits from a transaction connected with the partnership?
The partner must fully disclose the transaction to the partnership and receive consent.
How are liquidation funds distributed among unsecured creditors?
Each unsecured creditor receives a share of the remaining liquidation funds in proportion to the debt owed to them relative to the total unsecured debt.
What is the procedure for changing a company’s name?
The board passes a resolution to propose a name change, and the members approve it via a special resolution. The resolution is filed using the ‘Change Your Company Name by Resolution’ form, and the change is effective upon issuance of a new certificate of incorporation by Companies House.
Are a company’s articles of association binding on its directors?
No. Articles of association are a contract between the company and its shareholders, not the directors. While they may contain procedures related to directors, they do not confer enforceable rights on them.
