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30 Cards in this Set
- Front
- Back
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What is a partnership?
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An association of 2 or more persons to carry on as co-owners a business for profit.
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What is partnership law based on?
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The law of K, and Agency. Now we have the Revised Uniform Partnership Act (RUPA).
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How is a partnership formed?
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As soon as two or more people associate to carry on as co-owners a business for profit.
No form agreement, party's INTENT may be implied from their conduct. |
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Is a writing required?
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Usually, no, all though partnerships wishing to have an enforceable agreement to remain partners for more than one year must meet SoF.
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What happens if a person holds himself out as a partner?
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He will be liable to third parties who extend credit to the apparant partnership in reliance on the representation.
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When does the RUPA say that prop. is Pship property?
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Title propert is Pship's if: 1) titled in the Pship's name
2) titled in name of one or more partners, and the instrument notes the title holdr's capacity as a partner or the existence of the Pship Titled property is NOT if: )1) title doesn't mention Pship. (2) Pship funds not used to purchase. UNtitled property: Courts will look to acquisition funds, use of property, entry in books, improvement/maintenance with Pship funds |
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What is a partner's interest in the Pship?
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Each partner has a transferable interest - consists of share of Pship profits, losses & distributions. Absent agreement: profits shared equally, losses shared like profits.
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What fiduciary duties do a partner owe to the Pship?
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1) duty of loyalty: (i) account for all profits or other benefit (ii) not deal with the partnership as one with an advese interest (iii) not compete with partnership.
2) duty of care: refrain from engaging in negligent, reckless, or unlawful conduct or intentional misconduct. |
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May partners act on behalf of the partnership?
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Each partner is an authorized agent of the partnership for the purposes of its business.
(i) The act of any partner (ii) for apparently carrying out the ordinary course of the partnership (iii) binds the partnership UNLESS: partner had no authority to act AND third party knew (actual, subjective knowledge) that partner lacked authority. |
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What types of liability do partners have for acts of other partners?
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Ks - w/in scope of business or with authority
Torts - w/in ordinary course of business or with authority |
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How does a partner become dissociated from the partnership?
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(i) Partner gives notice of his express withdraw.
(ii) Happening of an agreed event (iii) Expulsion, judicial decree. (iv) Partner becomes bankrupt (v) death or incapacity to perform duties (vi) appointment of a receiver (vii) termination of a business entity that is a partner |
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Will a Pship still be bound by a disassociated partner's actions?
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YES, w/in 2 years, if:
1) act would have bound before dissociation 2) other party reasonably believed partner was still a partner and did not have notice he wasn't a partner |
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Will a dissociated partner still be liable to other parties for obligations incurred by the Pship?
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Dissociated partner is also liable if
(i) third party reasonably believed he was still a partner and (ii) had no notice of the dissociation. Partner can cut this time short by filing with SoS. All persons deemed to have notice of dissociation 90 days after filing. |
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What events trigger dissolution of the Pship under the RUPA?
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(1) Pship at will: Notification of any partner of intent to withdraw.
(2) Pship for definite term: expiration of term, consent of all parties, half of all parties after 90 days after death, bankruptcy, wrongful dissociation. (3) Happening of agreed upon event. (4) Judicial Decree: (i) economic purpose frustrated, (ii) partner has engaged in conduct making it not reasonably practicable to carry on the business. (iii) Business cannot practicably be carried on in conformity with the partnership agreement |
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How is a Limited Liability Partnership (LLP) formed and why are they preferable?
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Formation: (i) vote to amend the partnership agreement, or all partners approve, and (ii) file with SoS a statement of qualification.
Partners are not personally liable for torts or Ks of partnership. |
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What is a Limited Partnership (LP)?
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One or more general partners and one or more limited partners. General are personally liable, limited are only liable to the extent of their contribution.
Formed by: filing certificate of limited partnership signed by all partners. Must abide by statute. Must have at least one LP and GP. Dissolve by: event, consent of majority in interest, judicial decree, administratively dissolved by SoS |
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What are the LP's distribtion rights similar to?
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corporations
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I received a sweet distribution, and I knew that my LP was just about BK. problem?
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yup, may be forced to return improper amount - you had notice you jerk
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Can I assign the rights to receive my distributions, and my entire transferable interest?
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yes and no (latter is grounds for expulsion)
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What is an LLC, and why would I want to do it?
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An LLC is a hybrid: taxed like partnership, limited liability, can be run like corporation or partnership.
Form by filing with SoS. |
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How do I form an LLC?
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File articles of organization with the SoS, containing (i) statement that entity is LLC (ii) name of LLC, must include "LLC" (iii) street address of the LLC's registered office (iv) names of all the members.
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How is an LLC dissolved?
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Dissociation of an LLC member generally causes dissolution.
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What is an AGENCY relationship?
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Legal relationship whereby an agent is authorized to represent a principal in business dealings with third parties.
CAPACITY and CONSENT between parties to form. No writing, no consideration required. |
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What are the duties of the principal and the agent?
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Principal: Compensate agent, cooperate, indemnify, express K duties.
Agent: Reasonable care, loyalty, obedience, express K duties. |
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What are the types of authority?
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Actual: Agent reasonably believes she possesses authority based on the principal's dealings with her (express or implied). Terminates on change in circumstances, breach, death, or operation of law.
Apparent: If a principal directly or indirectly holds out another as possessing certain authority inducing reasonable reliance on that authority, person held out has apparent authority. |
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What is ratification?
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A principal "ratifies" an agent's unauthorized action if he knows of the material facts, accepts the entire transaction, and has capacity.
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Will the agent be liable?
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If the agent disclosed the principal, agent is not liable.
If the agent partially disclosed the principal or failed to disclose the principal, then both the principal and the agent will be liable. |
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What is Respondeat Superior and when will it function?
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Generally, tort liability committed by employee/agent is imputed to ER/principal for acts committed within the scope of the EEs employment.
Relationship must be employer/employee. NO liability if independent contractor, unless activity was inherently dangerous, nondelegable, or principal was negligent in selection of independent contractor. |
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Is an agent an employee or a contractor?
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Look to see if the principal has control over the manner and method of the agent's performance.
Factors to consider: - tools used - form of compensation (time = money, job = contractor) - understanding/characterization by parties - period of employment |
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If I'm rollin in my boss's benz to go get himz a latte, and i see some fine hunnies and one a dem axe me fer a ride, an i say yes, did I step outside the scope of my empoyment so that when I reck the benz and my lady friend busts her head up my boss won't be liable to her for damages?
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Yup.
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