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Heidi's Homemade MEE > Partnerships > Flashcards

Partnerships Flashcards

(64 cards)

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1
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A
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3
Q

liability of the partnership for contracts

A

A partnership is liable for all contracts entered into by a partner

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4
Q

A principal will incur liability for the acts of an independent contractor if:

A
  • inherently dangerous activities were invovled
  • nondelegable duties were delegated, or
  • the principal knowingly selected an incompetent independent contractor
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5
Q

define

partnership

A

An association of two or more persons to carry on as co-owners of a business for profit

A person can be an individual, trust, corp, partnership, or other entity

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6
Q

A partnership will be liable for loss or injury caused by a person’s tortious conduct if the person committing the tort was:

A

a partner or employee acting
- in the ordinary course of business of the partnership OR
- acting with authority with the partnership

Basically if the partner or employee was acting with **apparent authority **

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7
Q

An outgoing partner remains liable for what type of obligations?

A

obligations incurred while they were a partner
unless there has been payment, release, or novation

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8
Q

apparent authority in partnerships

A

RUPA says a partner is an agent of the partnership

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9
Q

intent required to form a partnership

A

intent to carry on a business as co-owners in a business for profit
no need to subjectively intend to be partners

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10
Q

how long is a proxy writing good for?

unless otherwise stated

A

11 months

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11
Q

intent required to form a partnership

A

intent to carry on a business as co-owners in a business for profit
no need to subjectively intend to be partners

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12
Q

Factors to consider in determining whether an association rises to a partnership

A
  • profit sharing (creates a rebuttable presumption of partnership)
  • each person has power to control the business
  • whether there is no sharing of losses -> disfavors partnership
  • title to property is held in joint tenancy or as tenants in common
  • parties designate their relationship as a partnership
  • venture undertaken by the parties requires extensive activity
  • sharing of gross returns
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13
Q

when is a writing required to form a partnership?

A

if the partners wish to have an enforceable agreement to remain partners for more than one year under the SoF

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14
Q

partnership by estoppel

A

partner liability is imposed when a party, who is not a partner in fact, holds themselves out or lets other people hold him out to be a partner to the world

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15
Q

is there a duty to deny a partnership?

A

No- a person held out by another as a partner is not liable as a partner unless they actually consent to the holding out
failure to deny a representation of partnership does not create partnership liability

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16
Q

is an agreement required to form a partnership?

A

No
But if there is an agreement, it may be written, oral, or implied

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17
Q

capacity required to enter a partnership

A

capacity to enter into a binding contract

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18
Q

governing law of partnerships

A

revised uniform partnership act
partners can agree to abide by different rules in a partnership agreement

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19
Q

what voting and management rights do partners have

A

all partners have equal rights in the management of the of the business and equal votes

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20
Q

do partners get a salary for services rendered to the partnership?

A

No- a partner has no right to compensation for services rendered to the partnership unless otherwise agreed

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21
Q

how are profits and losses shared in a partnership

A

equally among the partners unless otherwise agreed

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22
Q

when is a partnership liable for the tortious conduct of a partner or employee of the partnership ?

A
  • when the partner or employee was acting in the ordinary course of business of the partnership or
  • with authority of the partnershi
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23
Q

actual authority

partnerships

A

authority a partner reasonably believes they have based on communications between the partnership and the partner

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24
Q

where does actual authority come from

partnerships

A
  • from the partnership agreement
  • by vote of the partners
  • by the partnership filing a statement of partnership authority with the state
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25
what is a statement of partnership authority
A statement filed with the secretaryof state that grants or limits a partner's actual authority to enter into transactions on behalf of the partnership
26
# appare who is the principal and who is the agent in an agency relationship for a partnership
partnership is the principal partners are the agents
27
partners have ____ authority to bind the partnership to any contract ___________
apparent; within the scope of the partnership business
28
when will a partnership not be bound by a partner's act? - what does the partner lack? - what must the third party have/not have?
- the partner must lack actual authority AND - the person with whom the partner dealth with either knew or received notification of the lack of actual authority ## Footnote knowledge means what the person actually knew- not what they should have known
29
liability of the partners
each partner is jointly and severally liable for all obligations of the contract, whether arising in tort or in contract
30
indemnification of partners
since all partners are personally and individually liable for the entire amount of partnership obligations, one partner who pays the whole obligation of the partnership is entiteld to indemnification from the partnership (partnership pays partner the money he paid for the obligation)
31
A newly admitted partner is/is not personally liable for partnership obligations that arose before their admission
is not
32
duties each partner owes to the partnership
duty of loyalty duty of care duty of disclosure duty of obedience owed to both the other partners and the partnership
33
duty of loyalty in a partnership - to whom is it owed - what is it - type of duty
- owed to each other and the partnership - put the partners' and partnership's interest ahead of your own -> treat them fairly - fid duty
34
duty of care in a partnership - to whom is it owed - what is it - type of duty
- to each partner and the partnership - duty to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law -> **excuses regular negligent behavior ** - fid duty
35
duty of disclosure in a partnership - to whom is it owed - what is it - type of duty
- partners and the partnership - duty to provide complete and accurate information concerning the partnership - statutory duty outlined in RUPA -> must supply info without demand and on demand
36
duty of obedience in a partnership - to whom is it owed - what is it - type of duty
- to partners and partnership - duty to obey all reasonable directions of the partnership and not act outside the scope of his or her authority - fid duty
37
which duties may a partnership NEVER eliminate
- duties of loyalty - duty of care - duty of obedience can never eliminate fid duties can eliminate duty of disclosure bc it's statutory
38
partnership capital
property or money contributed by each partner for the purpose of carrying on the partnership business
39
# define partnership property
everything the partnership owns, including capital and property
40
types of property **presumed** to be partnership property
property purchased with partnership funds, regardless of whose name the title is in
41
property **presumed** to be partner's separate property
rebuttably presumed to be partner's separate prop if: - it is held in the named of one or more partners - the title instrument makes no mention of the parties acting for a partnership AND - partnership funds were not used to acquired the property
42
A partner is a BLANK of the partnership for business purposes
an agent
43
apparent authority | in the partnership context
Exists when a partner: - acts in the ordinary course of partnership business or business of the kind of the partnership - to enter into a contract with a third party AND - the third party is reasonably led to believe that the partner is acting with authority on behalf of the partnership analyze whether the partner is acting within the scope of the partnership or making a deal for soemthing reasonably related to the partnership
44
In a partnership: - who is principal? - who is the agent?
Partners are agents of the partnership. The partnership is the principal. The partners are agents of the partnership.
45
business of the kind | context of partnership authority
transactions that would reasonably be for carrying on business of the kind run by the partnership use common sense here!!!
46
liability of the partners
Each partner is jointly and severally liable for all obligations of the partnership, whether arising in tort or contract Plaintiff must first exhaust partnership resources before seeking to collect from an individual partner's assets
47
# explain partner indemnification
Where one partner pays the whole obligation of the partnership, they are entitled to indemnification from the partnership
48
management rights of a partner
a partner's right to participate in the management of the business, to get info about the partnership, and be recognized as a partner
49
financial rights of a partner
the partner's right to receive his share of any profit distributions made by the partnership
50
can a partner unilaterally transfer his management rights?
No- unless otherwise agreed upon by the partners. A partner cannot unilaterally transfer his management rights and make the transferee a partner Admission of a new partner requires a unanimous vote of the existing partners
51
can a partner unilaterally transfer his financial rights?
Yes- the transferee has the right to receive profit distributions from the partnership that would have otherwise gone to the partner. The transferee is not a partner and the transferee is still a partner and retains all managementrights
52
dissociation
when a partner withdraws from or leaves the partnership
53
methods by which a partner becomes dissociated from the partnership
1. oral or written notice of the partner's express will to withdraw 2. happening of an agreed event 3. valid expulsion of the partner 4. partner's bankruptcy 5. partner's death or incapacity to perform partnership duties 6. a court decision saying a partner is incapable of performing partnership duties 7. termination of a business entity that is a partner
54
when does wrongful dissociation occur
when a partner dissociates in breach of an express term in the partnership agreement or if the partner withdraws, is expelled, or becomes bankrupt before the end of the partnership term
55
A partner who wrongfully dissociates will be liable for what
any damages to the partnership caused by the dissociation
56
# define at-will partnership
Partnership with no definitive end point
57
what is the default form of partnership
at-will
58
# define term partnership
a partnership where the partners have agreed, explicitly or implicitly, to remain partners for a definite term or until the completion of a particular undertaking
59
types of property **deemed** to be partnership property
acquired in the partnership’s name or in a partner’s name where it is apparent from the document that they are acting for a partnership
60
most important factor in deciding whether an association is a partnership
sharing of profits Sharing of profits raises a presumption of partnership UNLESS the share was received as **payment of a debt**, as wages or compensation for services rendered, as rent payment, as an annuity or other retirement benefit, as interest on a loan, or for the sale of goodwill of a business.
61
when can a plaintiff collect from an individual partner's assets
after plaintiff has first exhausted partnership resources
62
what percentage of the vote is needed for matters outside the ordinary course of business of a partnership
unanimous consent of all partners
63
third parties are deemed to have constructive notice of the statement of partnership authority for real property transactios if the statement is filed **where**
statement is recorded in the county where the property is located
64
criminal liability of partners
partners will not be criminally liable for the crimes of other partners committed within the scope of their partnership business unless the other partners participated in the crime as principals or accessories

Heidi's Homemade MEE (10 decks)

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