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30 Cards in this Set
- Front
- Back
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What are requirements to form a general partnership?
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No formalities
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What is the definition of a general partnership?
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Association of two or more people to carry on as CO-OWNERS of a BUSINESS for a PROFIT
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What leads to a presumption of a partnership?
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Contribution of capital or services in exchange for profits
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Whats the relationship of the partnership to the partners?
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Partners are agents to the partnership
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What's the relationship of general partners liability to the partnership?
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General partners are PERSONALLY LIABLE for debts of partnership
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What is incoming partner's liability for debts of partnership?
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Not liable for PRIOR DEBTS, but money paid into partnership can be used to satisfy prior debts.
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What liability does a dissociating withdrawing partner face for subsequent debts?
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A dissociating partner retains liability for future debts of partnership UNLESS
1) Actual notice of dissociation is given to creditors 2) 90 days after filing notice of dissociation with the State Corporation Commission of Virginia |
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What does partnership liability by estoppel mean?
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If one represents to a third party that a general partnership exists, she will be responsible as if a general partnership exists
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What is a limited partnership?
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A partnership with at least one general partner and at least one limited partner
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What is required to form a limited partnership?
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File limited partnership certificate with the SCC of Virginia
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What is general partner's role in limited partnership?
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1) General Partner is liable for the obligations of the limited partnership, but also manages the business
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What is the limited partner's role in limited partnership?
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Liable only for what she contributed, but does not have management authority
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What is required to form a Limited Partnership? (3)
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1) File Certificate of Registration
2) File Annual Reports 3) Maintain Sufficient Insurance for Foreseeable Insurance |
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What are liability obligations in an LLP?
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No partner is individually liable for partnership.
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What duties do general partners owe each other?
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Duty of loyalty
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What is action for breach of loyalty in a partnership? What can partnership recover?
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Action for Accounting and can recover
1) Losses from breach 2) Disgorge any profits |
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How do you determine if it's personal property or the partnerships property?
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Ask WHOSE MONEY WAS USED TO BUY THE PROPERTY?
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Can a partner transfer her share of management in a partnership?
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NO!
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What is default rule of management in a partnership?
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Equal control irrespective of contribution
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Partner provides 90% of cash and does 90% of work. Partner B does 10% of each. What are default control and profit-sharing rules?
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50% each without agreement
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What is a partner's salary in a partnership?
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NONE without agreement, UNLESS partner is involved in winding-up partnership's business
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Absent agreement, how are profits and losses shared?
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1) Profits shared equally
2) Losses shared like PROFITS |
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How are profits divided up if losses are shared 60/40?
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50/50!
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How are losses divided up if profits are shared 60/40?
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60/40
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When does dissolution occur?
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1) Notice of
2) Express will 3) of one partner to dissociate 4) without agreement to the contrary |
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What are three phases in ending a partnership?
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1) Dissolution
2) Winding Up 3) Termination |
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What are partners' liability during winding up?
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1) General partners retain liability to all existing creditors
2) Liability remains for any new creditors until actual notice of dissolution given to creditors OR 90 days after making statement of dissolution to VSCC. |
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What's the priority of distribution during winding up?
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1) Creditors first
2) Capital contributions of partners 3) Surplus to partners shared equally |
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Who are included as creditors of a partnership for purpose of distribution?
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Partnership who LOANED money to partnership
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What's the ultimate formula for determining what partners' receive during dissolution?
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Partner repaid loans and capital contribution + share of profits - share of losses
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