Test 1

Question 1

Partnerships as a legal entity

Answer 1

Partnership having legal existence separate from their members. Ex. Opening a bank account under the business name not yours.

Question 2

Types of partnerships for GP

Answer 2

Term - a partnership for only asp certain time

At Will- partner can end partnership at any time

Question 3

Formation of a general partnership

Answer 3

Partnership agreement
Partnership capital
Partnership property
Partners interest in property

Question 4

Partnership agreement for a GP

Answer 4

Preferable but not required to enter in a written agreement

Question 5

Partnership capital

Answer 5

Total money contributed to be used by partnership

Question 6

Partnership property

Answer 6

Sum of assets, including property acquired by the partnership

Question 7

Partners interest in partnership

Answer 7

Profit of surplus owned by each individual partner, transferred as gift or sale.

Question 8

Duties among partners

Answer 8

Fiduciary duty
Duty of obedience
Duty of care

Question 9

Duties among partners

Fiduciary duty

Answer 9

Duty of loyalty, good faith , and honesty

Question 10

Duties among partners

Duty of obedience

Answer 10

To obey partnership agreements and business decisions made by partners

Question 11

Duties among partners

Duty of care

Answer 11

Manage partnership without negligence, reckless conduct(coming to work drunk), intentional misconduct(sexual harassment) and violation of law(lying for client).

Question 12

Rights among partners

Answer 12

Rights In Partnership property
Transferable interest in partnership
Management

Question 13

Rights in partnership property

Answer 13

Right to use partnership property for partnership purposes

Question 14

Transferable interest in partnership

Answer 14

Right to share your surplus or profit. May be transferred Ex. Will

Question 15

Management

Answer 15

Every partner has equal right in management, unless otherwise agreed.

Question 16

Enforcing rights

The rights you have in the partnership

Answer 16

Information - right to demand information

Legal actions - right to sue partnership or partners

Question 17

Contracts of partnership

Personal liability

Answer 17

Each partner has joint and several, unlimited personal liability

Question 18

Contracts of partnership
Personal liability
Joint and several liability

Answer 18

The partnership may be sued joint as a group or individually to each person

Question 19

Contracts of partnership
Personal liability
Unlimited personal liability

Answer 19

Can be sued for everything you own.

Question 20

Summary equation of a general partnership

Answer 20

General partnership = unlimited power + unlimited liability

Question 21

Contracts of partnership

Implied or apparent authorities

Answer 21

Actual express authority - partner was actually told orally or writing to enter contracts
Actual implied authority - deduced or concluded that the person can make decisions under companies name

Question 22

Contracts of partnership

Partnership by estoppel

Answer 22

A non-partner presents himself as a partner, they are responsible for incurred debt. Ex. Taking out a loan for a company that you are not part of.

Question 23

Tort

Answer 23

Partnership is responsible of any tort committed by partners during ordinary course of business

Question 24

Crime

Answer 24

Partner is not considered criminally liable, for a crime committed unless participated or authorized.

Question 25

Notice to a partner

Answer 25

When one partner is notified, the entire firm is

Question 26

Liability of incoming partner

Answer 26

Antecedent debts | Subsequent debts

Question 27

Liability of incoming partner | Antecedent debts

Answer 27

Responsible for debts incurred before coming to the partnership but only for your capital contribution

Question 28

Liability of incoming partner | Subsequent debts

Answer 28

Has unlimited personal liability for debts incurred after being a partner.

Question 29

Dissociation

Answer 29

When a partner leaves the partnership

Question 30

Methods of dissociation for a general partnership (the ways a partner can leave the partnership)

Answer 30

``` Partner withdraws Partner is judicially expelled Partner becomes bankrupt Partner dissolved it self within the company Death of a partner ```

Question 31

General rule of dissociation from a partnership

Answer 31

Dissociation may lead to dissolving unless the remaining partners agree to continue the business

Question 32

Dissolution

Answer 32

When the Gp is no longer operating as a business

Question 33

Winding up

Answer 33

Completing unfinished business | Tying up loose ends

Question 34

Distribution of assets for GP

Answer 34

Money owed to creditors (banks, light ill,landlord, ect. Loans made by partners (loan you took from your father) Capital contribution Amount owned to profit

Question 35

Limited partnership

Answer 35

A partnership made under laws of state having one or more general partner and limited partner.

Question 36

Formation of a LP

Answer 36

Filing of certificates Name Contribution

Question 37

Filing of certificate

Answer 37

Two or more must file certificate signed with the state

Question 38

Name of LP

Answer 38

Inclusion of partners surname leads to loss of the limited partners limited liability. So only the name of the GP should be included in the name and must end with L.P

Question 39

Contribution of formation for a LP

Answer 39

Cash, property, or services

Question 40

Rights of a L.P | Profit loss and sharing

Answer 40

Profits and losses are included in the partnership agreement If not theN It will be based on the capital contribution of each partner

Question 41

Rights of a L.P | General partner

Answer 41

Unlimited power , unlimited personal liability

Question 42

Rights of a L.P | Limited partnership

Answer 42

Limited power, limited personal liability (extent of capital contribution)

Question 43

Dissolution of a LP

Answer 43

Expiration of time period Withdrawal of general partner A decree of judicial dissolution

Question 44

Winding up of a LP(same as GP) | Distribution of assets

Answer 44

Creditors including partners (so everybody gets paid) Partners and ex-partners for distribution Capital contribution Partners for extra profit

Question 45

Limited liability companies equation

Answer 45

"The best of both worlds" | Unlimited power + limited liability

Question 46

Limited liability company

Answer 46

A non-corporate business that provides limited liability and participation in management. Considered a member

Question 47

Formation of a LLC

Answer 47

Filing - articles of organizations Name must include LLC Contribution - cash, property, services rendered

Question 48

Operating agreement for a LLC

Answer 48

Contract governing affairs and stating various right and duties of each member,

Question 49

Foreign limited liability company

Answer 49

An LLC is considered foreign other than in the state that where it was formed

Question 50

Financial rights of a LLC | Profits and loss sharing

Answer 50

Based on the % contribution

Question 51

Financial rights of a LLC | Distribution

Answer 51

Based on the % of members contribution

Question 52

Financial rights of a LLC | Withdrawal

Answer 52

When a person withdraws they may demand their capital contribution back.

Question 53

Dissolution of LLC | Will automatically dissolve upon

Answer 53

Dissociation of a member Expiration Written consent of all members Decree of judicial dissolution

Question 54

Winding up for LLC

Answer 54

Creditors - all members Unpaid distribution Return of capital Extra profit

Question 55

Limited liability partnership

Answer 55

General partnership that limits the liability of its partners

Question 56

Limited liability limited partnership

Answer 56

Limited partnership in which the liability of a GP is limited the same as an LLP

Question 57

Summary of partnership | Equations

Answer 57

GP = LLP LP = LLLP LLC

Question 58

General partnership

Answer 58

Two or more persons as co-owners for profit.