11/15/07: St. John's; Law-1310-0; Sabino; Quiz 2

Front 1

5 parts to the definition of partnerships

Back 1

1. an association
2. of two or more "persons"
3. acting as co-owners
4. in a business
5. for profit

Front 2

definition of implied partnership

Back 2

2 persons who are working together but arent actually partners.... however, they appear to look like partners

Front 3

danger of an implied partnership

Back 3

if one guy gets in trouble, they come after the other guy, even though they are not formal partners, they still appear to be partners

Front 4

TRUE or FALSE: the law requires a partnership to be in writing

Back 4

FALSE, you dont have to put it in writing

Front 5

TRUE or FALSE: the law of partnerships is state law

Back 5

TRUE

Front 6

What does UPA stand for?

Back 6

Uniform Partnership Act

Front 7

2 benifits of the UPA

Back 7

-tells us what to put into a writen partnership
-incase we forget anything, the UPA will fill the gap

Front 8

TRUE or FALSE: partners must share in profits equally because of state law

Back 8

FALSE, partners may share profits anyway they want; however, if you say nothing, (absence of agreement)profits are shared equally

Front 9

TRUE or FALSE: parnters must share in losses equally because of state law

Back 9

FALSE, in absence of an agreement, losses are shared the same way that you share profits

Front 10

definition of capital contribution

Back 10

assets that are put into the partnership

Front 11

definition of partnership property

Back 11

property that is put into the partnership that should yield dividends... can use it anytime they want to make money

Front 12

definition of buy/sell clause

Back 12

allows new people to buy into the partnership or to sell it

Front 13

TRUE or FALSE: you can name a partnership anything you want; you just have to put the 2 partners in writing

Back 13

TRUE

Front 14

what are the legal rights of partners to manage their business?

Back 14

each and every partner has the right to participate in management

Front 15

how do partners divide the management duties?

Back 15

anyway they want... all they have to do is agree on it

Front 16

do partners have the right to get a salary?

Back 16

partners have no right to a salary... they control the profits of the business

Front 17

TRUE of FALSE: partners do not have the right to inspect the books and records unless they control the majority of the profits

Back 17

FALSE, partners have the right to inspect the books and records so they hire an unrelated independent CPA to check

Front 18

TRUE or FALSE: partners have the right to watch each other or anything they want (they may want u to account for the money)

Back 18

TRUE

Front 19

what are the individual rights to do partnership business?

Back 19

each and every partner has an unlimited right to conduct partnership business.. they can do whatever they want as long it is as in pursuit of the business

Front 20

definition of fiduciary duty

Back 20

the legal responsibility that binds partners to the partnership as a whole (loyality and trust)

Front 21

2 points about viarious liability

Back 21

-to be liable even though you were not physically there
-you dont have to be there, but it is part of your partnership

Front 22

definition of Intential tort

Back 22

intentional physical harm or damage to a person or personal property

Front 23

3 ways to end a partnership (dissollution)

Back 23

1. voluntary dissolution by partnership vote
2. involuntary dissolution by operation of law
3. involuntary dissolution by court order

Front 24

4 circumstances that cause the partnership to end by involuntary dissolution by operation of law

Back 24

-event of the death of a partner, when a partner dies, the partnership dies
-insanity of a partnerl crazy people cant volunteer
-the bankruptcy of a partner, no longer can consent
-when the nature of the business becomes illegal

Front 25

When would a partnership be dissolved by court order?

Back 25

when partners cant get along or agree so a judge ends the partnership

Front 26

2 dangers of being in a partnership

Back 26

-unlimited personal liability of partners in a partnership
-Joint and Several Liability

Front 27

what does 'joint' mean in joint and several liability?

Back 27

the partners are jointly, as a group, liable

Front 28

what does 'several liability' mean in joint and several liability?

Back 28

to take any partner and make them pay it alone

Front 29

TRUE or FALSE: when the creditors single out and attack one partner, that partner has the right to demand the money from their other partners

Back 29

TRUE

Front 30

What does PC stand for?

Back 30

Professional Corporation

Front 31

What does LLP stand for?

Back 31

Limited Liability Partnership

Front 32

What does LLC stand for?

Back 32

Limited Partnership Company

Front 33

definition of PC

Back 33

corporations made up of shareholders but u have to be a member of the same profession (denistry , art, etc)

Front 34

definition of LLP

Back 34

liability is limited to their own wrongful acts in a limited liability partnership

Front 35

definition of LLC

Back 35

open to all businesses... also foreign companies.. it is so foreign companies can come here and do business and not be subject to our laws so much (note: each company isnt a shareholder, they are a member)

Front 36

2 reasons why LLCs are dangerous

Back 36

-much more expensive that corporation
-you dont know what u are getting in an LLC; u know what ur getting in an LLC

Front 37

What is the flaw to limited partners in an LP having limited liability

Back 37

limited partners have zero management authority... there is always one general partner who has all the management power and all the liability.... who owns the general partner if there is none? a corporation

Front 38

What kind of partnership is noted for selling risky investments to ppl who dont know shit?

Back 38

Limited Partnerships (LP)