Flashcards in partnership Deck (70)
what 5 areas are tested on partnership?
1) general partnership FORMATION
2) liabilities of general partnerships to 3rd parties
3) right and liabilities b/w general partners
4) general partnership dissolution
5) alternative unincorporated business orgz
are there any formalities requirements for general partnerships?
no formalities are required
what is the default business organization?
general partnership b/c no formalities are needed.
can a partnership be formed on accident
def of partnership
1) association of
2) 2 or more persons who
3) are carrying on as co-owners of business
4) FOR PROFIT
What is the the main thing that creates presumption of partnership?
sharing of profits.
- Contribution of $ or services in return for a share of profits creates a presumption of a general partnership exists `
-ONLY RETURN OF SHARE OF PROFITS not a salary or wage
what is the agency rules in partnership?
1) partners are agents of partnership for apparently CARRYING ON USUAL PARTNERSHIP BUSINESS
when is the partnership liable for each partners torts?
when w/i the scope of partnership business
when is a partnership liable for each partners k's?
for each partners authorized contracts
what is each general partner PERSONALLY liable for?
all debts of the partnership AND for each co-partners torts
what is an incoming partner liable for pre-existing debts>
incoming P's are generally not liable for prior debts, but any capital paid into partnership by incoming partner can be used by partnership to satisfy prior debts
what is a dissociating (withdraw) partner's liability for subsequent debts?
retain liability on future debts
what are the 2 ways that a dissociating partner can get out of liability for subsequent debts?
1) actual notice of their dissociation is given to creditors or
2) until 90 days after filing with state a NOTICE OF DISSOCIATION
what is general partnership liability by estoppel
one who represents to a 3rd party that a general partnership exists will be liable as if the general partnership exists
are general partners fiduciaries of each other and the partnership?
what do general partners owe to other partners and the partnership
duty of loyalty, which means they cannot
1) self deal
2) usurp partnership opportunities or
3) make secret profits
what is the partnership remedy if a partner breaches duty of loyalty
an action for accounting
what is an action for accounting
general partnership may recover loses cause by the breach of loyalty including
1) indeminify and also
2) partnership may disgorged (take away) profits made by breaching partner
what is the general rule about property of partnership
it is relatively hard to transfer
what is specific partnership assets?
land or leases or equipment owned by partnership.
can specific partnership assets be transferred by partner?
no. MAY NOT be transferred by individual partners w/o partnership authorizes
what can a partner do with share of profits?
personal property owned by individual partners and therefore it MAY be transferred by individual partners to 3rd party
is share of profits personal property of each partner?
can individual partners transfer their share of profits to 3rd party?
if a partner transfers there share of profits to a 3rd party, is that 3rd party now a partner?
is the share to manage the partnership transferable?
NO. owned only by the partnership itself and MAY NOT be transferred by individual partners.
(Cannot sell right to vote or leave in inheritance)
what is the default rule for how management is run in partnership
ABSENT an agreement, each partner is entitled EQUAL control (vote)
how much of partners need to vote for the ordinary course of business?
when is unanimous voted required?
for fundamental partnership matters
(outside the ordinary course of business)