Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
27 Cards in this Set
- Front
- Back
|
overview of partnerships |
association of 2 or more people to carry on as co-owners a business for profit, whether or not the persons intend to form a partnership |
|
|
uniform partnership act of 1914 |
governs partnerships
revised several times, most recent in 1997 |
|
|
factors that matter in a partnership |
share profits share mgmt. of business usually share losses
cannot simply call yourselves partners charitable businesses are not partnerships |
|
|
partners by estoppel |
participants tell other people that they are partners when they aren't, or allow others to call them partners.
third party relies on this assertion
third party suffers harm |
|
|
liability to ourtsiders |
partners with Actual or Apparent authority may bind the partnership
actual authority implied apparent |
|
|
lto
actual authority |
set forth in partnership agreement, or in decisions made by a majority of partners |
|
|
lto
implied authority |
reasonably deduced from the nature of the partnership, partnership agreement, or relations of the partners |
|
|
lto
apparent authority |
acts of a partner apparently carrying on the ordinary partnership business bind the partnership, so long as that third person has no knowledge or notice of the lack of actual authority |
|
|
lto
ratification |
if the partnership accepts the benefit of an unauthorized transaction or fails to repudiate it, it has ratified the transaction |
|
|
lto
information |
under the uniform partnership act, whatever one partner knows, the partnership is deemed to know |
|
|
lto
tort liability |
a partnership is liable for intentional and negligent torts of a partner in the ordinary course of business or when the partner is acting with actual authority |
|
|
paying partnership debts |
personal liability- each partner is personally liable for the debts of the partnership
joint and several liability- a creditor may sue the partners jointly as a group or separately as individuals
incoming partners- are liable only for debts incurred after becoming a partner, liability for earlier debts is limited to the investment in the partnership |
|
|
liability of incoming partners |
a partner is personally liable only for obligations the partnership incurred while he was a partner
his liability for debts incurred before he became partner is limited to his investment in the partnership |
|
|
Relationship of partners
financial rights |
*partners share profits equally
partners share losses in the same ratio as losses
*partners get no pay for work done beyond their share of profits
all partnership property belongs to the partnership, not an individual
a partner can transfer the right to profits, but not membership of partnership |
|
|
management rights |
*each partner has equal rights in mgmt. of partnership
partners with authority have the right to bind the partnership to a contract. partners without authority have power, but not the right to bind.
*partners have an equal vote on matters of part. business
all partners have a right to inspect and copy the part. books and records. partners are also required to share info with everyone |
|
|
management duties |
duty of care- owed by partners to manage the part. affairs without gross negligence, reckless conduct, intentional misconduct, or knowing violation of law.
duty of loyalty- not compete with part. and avoid conflicts of interest.
duty of good faith and fair dealing- deal with each other and part. in a fair way |
|
|
terminating partnership
partnership at will |
the partners have not agreed in advance how long their part. will last, any of them may leave at any time |
|
|
terminating partnership
term partnership |
the partners have decided on a length of time or a particular task to be completed, the part. automatically ends at the end of the time or task |
|
|
dissociation |
occurs if partner quits
when one quits, they can buy each other out or wind up the business and terminate partnership
partner always has the power to leave, but may not have the right |
|
|
rightful dissociation |
partner in part. at will gives notice that he intends to withdraw
partners agree in advance on events that will cause this
partner dies/ incompetent
partner is expelled by other partners |
|
|
wrongful dissociation |
partner violates the part. agreement
partner withdraws before the end of the term
court expels a partner in a term part. due to harmful behavior
partner in a term part. is bankrupt |
|
|
financial settlement
|
if the part. decides to continue, it must pay the ex-partner the value of her share of the business |
|
|
liability of dissociated partner to outsiders for debts incurred before dissociation |
dissociated part. is liable to outsiders for debts incurred during her term as a partner, but the partnership must indemnify her for these debts |
|
|
liability of dissociated partner for debts incurred after dissociation |
a diss. partner is liable to outsiders for part. debts incurred within 2 years after she leaves, but only if the creditor reasonably believes she is still a partner
part. must indemnify her for these debts |
|
|
liability to the partnership |
if the ex-partner harms the pat. after she leaves, she is liable for the damage |
|
|
termination of partnership business
3 steps |
dissolution- decision to end business, voluntary or automatic
winding up- during this process, all debts are paid, and the remaining proceeds are distributed to the partners
termination- the end. when winding up is complete |
|
|
o |
k |
