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31 Cards in this Set
- Front
- Back
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[General P'ship - Definition]
Definition of a partnership 1 |
Association of 2 or more persons to carry on as co-owners of busi. for profit
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[General P'ship - P'ship Property: Generally]
For what purpose is a p-ship treated like an entity? 3 |
Generally a p-ship is NOT an entity, HOWEVER, it can hold property
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[General P'ship - P'ship Property: Generally]
When will property NOT in the pship's name still be considered pship property? (1 test, and 4 examples where property is PRESUMED prop of the pship] 3 |
TEST: Intent prop be held for the pship
PRESUMPTION prop of pship: -Bought for the pship business -Bought w pship funds -Property listed in pship books -Prop on which the pship covers expenses for like taxes, repairs or insurance premiums |
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[General P'ship - P'ship Property: Partner's Rights]
What is a partner's right to assignment as a tenant is pship (i.e. - pship PROPERTY)? 4 |
Partner may NOT assign except when done in connection w/ assignment of rights by agreement of ALL PARTNERS
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[General P'ship - P'ship Property: Partner's Rights]
What is a partner family's right to pship PROPERTY at death? 4 |
Right to pship property does NOT go to family, it goes to the other surviving partners
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[General P'ship - P'ship Property: Partner's Interest]
What interest IS the personal property of a partner? 5 |
Right to pship profits/surplus
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[General P'ship - Relations b/w Partners: Management]
What are the 2 voting requirements for pship changes? 8 |
-General business = majority vote
-Important matters = unanimous |
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[General P'ship - Relations b/w Partners: Duties]
What duties does every partner owe to each other? (2 types of duties, one duty has 2 sub-parts) 9-10 |
Fiduciaries duties of:
-Loyalty (good faith, and fair dealing) -Trust and confidence Duty to indemnify for losses cause by misconduct |
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[General P'ship - Relations w/ 3rd Parties: Authority]
What are the THREE types of authority? 12-13 |
EXPRESS Actual Authority
IMPLIED Actual Authority APPARENT Authority |
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[General P'ship - Relations w/ 3rd Parties: Authority]
NO MATTER WHAT, unanimous consent is required for these actions 13 |
-Assignment of partnership PROPERTY
-Disposing good will of business -Submitting a claim to arbitration |
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[General P'ship - Relations w/ 3rd Parties: Authority]
What is the term for when partners will be liable for actions of a NON-PARTNER? And what are the elements needed to show this? 14 |
Partnership by estoppel shown by:
-Extention of credit to the pship b/c of actions of NON-PARTNER -Partners of the pship fail to act to notify the creditor of the error |
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[General P'ship - Relations w/ 3rd Parties: Partner Liability]
What's the rule for liability b/w partners for WRONGFUL ACTS/TORTS acts w/i ordinary course of business? 15 |
Joint and several liability
NOTE: Liability attaches even no actual knowledge of other partner's action |
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[General P'ship - Relations w/ 3rd Parties: Partner Liability]
What's the rule for liability b/w partners for MISAPPROPRIATION of funds w/i ordinary course of business? 16 |
Joint and several liability
NOTE: Liability attaches even no actual knowledge of other partner's action |
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[General P'ship - Relations w/ 3rd Parties: Partner Liability]
What's the rule for the extent of liability for NEW/INCOMING partners? 16 |
-Liable for obligations arising after joining
-ONLY liable for obligations arising before joining to the extent of the partnership PROPERTY (not out of his partnership interest) |
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[General P'ship - Dissolution: Causes]
What are 5 "rightful" causes of dissolution? 18 |
-End of pship agreement term
-At will -Bona fide expulsion -Death -Bankruptcy |
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[General P'ship - Dissolution: Causes]
What are 2 "wrongful" causes of dissolution? 18 |
-Violation of pship agreement
-Wrongful expulsion |
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[General P'ship - Dissolution: Causes]
What type of action may partners bring against one who has wrongly causes a dissolution? 18 |
A breach of K action
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[General P'ship - Dissolution: Causes]
What are t grounds for which a court will grant a dissolution? 18 |
-Misconduct of partner
-When it is not reasonably practicable to continue the pship |
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[General P'ship - Dissolution: Effect]
When may a partnership nevertheless continue, even AFTER a dissolution? (2 situations) 19 |
If the pship agreement so allows
If there was a WRONGFULY dissolution by one of the partners |
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[General P'ship - Dissolution: Effect]
What's the order of priority of liquidation pay-out |
-Pay off liabilities
-Excess to partners according to pship interest (default: equal shares) |
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[General P'ship - Dissolution: Effect]
What are are the rights of the family of a deceased partner? 20 |
Deceased partner's share GOES TO THE PARTNERSHIP
The family CANNOT demand liquidation BUT, partner family can demand cash payment of valid of interest |
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[General P'ship - Dissolution: Distribution]
What is the default rule if, at liquidation, there is not enough to satisfy creditors (let alone any excess to split? 20 |
The partners must contribute EQUALLY to satisfy debt obligations
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[General P'ship - Dissolution: Distribution]
What is the FULL order of liquidation preference? 21 |
-Payments to non-partner creditors
-$ partners specifically lent to pship -Return of individual partner's capital contributions -Remaining excess split based on profit sale (default rule = split equally) |
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[Limited P'ship - Definition]
What's the definition of a limited partnership? 21 |
Pship formed by 1 or more GENERAL partners, and 1 or more LIMITED partners
NOTE: general partner may be a corp |
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[Limited P'ship - Formalities]
What type of writing and formalities are required to create a general partnership? 21 |
-NO partnership agreement is required
-DO need to file a certificate w/ sec. of state -Pship name MSUT include the words "limited pship" |
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[Limited P'ship - Rights and Obligations]
What is the liability of a limited partner? 22 |
Liability is limited to the entity's debts & obligations
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[Limited P'ship - Rights and Obligations]
How can a limited partner lose his "limited" status? 22 |
If limited partner participates in control
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[Limited P'ship - Rights and Obligations]
If a limited partner participates in control, to WHOM is the limited liabliity destroyed? 22 |
Limited liablity is NOT detsroyed to all
Limited liability only destroyed to that who transact business with pship, believing the limited partner is really a GENERAL partner |
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[Limited P'ship - Rights and Obligations]
What is the default rule for share of profit and share of loss for partners of a limited partnership? 22 |
In PROPORTION to the partner's contribution
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[Limited P'ship - Dissolution]
However, when does the withdrawal of a general partner nevertheless NOT cause dissolution? 23 |
When either:
-At least one other general partnership remains and the remaining limited partners agree to continue under him -When one limited-partner steps-up to become a general partner, and all remaining limited partners agree IN WRITING w/i 90 days |
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[P'ship Tax Issues]
When must a partner pay taxes on his pship INTEREST? 24 |
Must pay taxes on partnership interest WHEN they have fixed the right to to receive the money (accrual method)
Partner need NOT make a draw, and still owes taxes on that money |
