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27 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
2) duty of care |
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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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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 and did not have notice Dis. partner is also liable ifthird party thought he was sitll a partner and did not have notice of dissociation. Partner can cut this time short by filing with SoS. |
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How is an LLP formed and why are they preferable?
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LLP must be voted for, amend partnership agreement, and file a statement of qualification with SoS. Must also put LLP after name.
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.
Must abide by statute to become an LP. |
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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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I want to dissolve this BS LP, can I?
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sure, if it is not reasonably practicable to carry on the business in conformity w/ the p'ship agmt
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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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What is an AGENCY relationship?
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Legal relationship whereby an agent is authorized to represent a principal an business dealings with third parties.
ABC ASSENT -Informal agreement (no writing needed) -Principal has capacity BENEFIT CONTROL -Principal has right to control agent by having POWER TO SUPERVISE manner of agent's performance |
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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 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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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.
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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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Independent Contractors
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No vicarious liability
UNLESS -Ultra-hazardous / inherently dangerous activities -Estoppel - if you hold out your independent contractor w/ appearance of agency = prevented from denying vicarious liability Intentional Torts of Ind. K-er -Generally not liable -Unless (1) Authorized by Principal (2) Friction from nature of employment (3) Motivated by desire to serve principal |
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Types of Authority for Agent to enter into K's
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Actual Express Authority
-What it sounds like / words that give authority -No need for writing unless K would require a writing Actual Implied Authority -Through CONDUCT or CIRCUMSTANCES -Necessity, custom, prior acquiescence Apparent Authority - (1) Cloaked with appearance of authority; (2) 3rd party reasonably relies on appearance of authority |
