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39 Cards in this Set
- Front
- Back
Default of failed LP
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GP
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Requirments for GP
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2 or more carrying on as co-owners for profit
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When is partnership liable for k's
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If partner entered into k for business
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When is partnership bound by torts committed by partner?
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if within scope of partnership
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When is partnership not bound by contracts entered into by partner
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no authority
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What is incoming GP's liabilities for pre-exisitng debts?
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NONE but any contribution money they put into GP can be used to pay off pre existing debts
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Withdrawing partner's liability for partnership debts?
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Still liable unless does 1 of 2 things:
1) Gives notice of withdrawal to creditors, or 2) 90 days after filing notice of withdrawal with the state |
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Describe the doctrine of partnership by estoppel? 3 elements
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1. Person who is not a partner and has no partnership
2. represents to a 3rd person that a partnership exists 3. Will be liable as if a general partnership exists |
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How to form LP
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i. Need at least 1 General Partner and at least 1 limited parter to form
ii. Must file limited partnership certificate with state |
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Liability of GP in LP?
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personal unlimited liability
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What rights do GP's have that LP's do not have
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right to exercise substantial control and run day to day business of partnership
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Does GO have FD to partnership>?
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yes cannot do anything adverse to it
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Liability of LP in LP
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no personal liability just liable to amt put in
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When will LP be liable personally
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when exercises too much control
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3 rights of LP's
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1. bring derivative action
2. Vote on extraordinary matter of partnership 3. Get partnership information from GP or see documents upon reasonable demand (inspect and copy partnrship business) |
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Can LP ever assign his LP interest to another?
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YES but only rights of distribiton, can only assign other rights if all partners consent or partnership k allows
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Are GP's fidcuciaries?
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Yes to other GP"s and to partnership
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5 FD of GP's
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1. duty of loyalty
2. duty of disclosure 3. duty to follow reasonable directions of partnership 4. duty of care 5. duty to provide complete and accurate information concenring the partnership |
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Can specific partnership assetS ever be transferred by GP?
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NO
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Is goodwill an asset?
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YES
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What is partner's profits considered to be
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personal property can do whatever they want with it
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When cannot determine if partnership or personal asset what test?
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If personal money used to purchase then personal even if used in partnership busienss
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If no agreement to management share what result?
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EQUALLY disregard profits agreement
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If k silent can partners ever get salary?
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NEVER unless provided for in partnership agreement or compensation for winding up
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Absent agreement how are profits shared?
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Equally
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Absent agreement how are losses shared?
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LIKE PROFITS
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3 stages of ending partnership
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1) dissolution
2) winding up of partnership 3) termination |
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When partnership has dissolution what must happen
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WIND UP and liquidate
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How does GP dissolute from At will partnership
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Any express manifestation starts dissolution and NO LIABILITY
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Expressed partnership formed by contract how do start dissolution? 2 ways
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1) by event specified in k
2) upon majority vote of remaining partners to dissolve within 90 days of a partner's withdrawal |
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When no dissolution but just withdrawal of GP
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GP withdraws but majority of GP's do not vote to withdrawal within 90 days after GP's withdrawal
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Liabilities for withdrawing GP?
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1 any debt that arouse while he was GP and 2. If GP does dissolute then is liable for winding up business
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How to cause dissolution in LP?
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Withdrawal of a GP, unless all partners agree in writing to the appointment of any necessary GP's within 90 days of the w/d. So if new GP substituted for w/d GP then no dissolution.
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When there is dissilotuin what must happen
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WInd up by liquidating all assets of partnership and then paying off all creditors and then remainder to partners if any
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WHat happens after winding up over?
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TERMINATION nothing left
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Do partners who engage in actual winding up/liquidating get compensation
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yes even if k does not provide for
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Partner's liability regarding old business during winding up?
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partnership and partners liable on all transaction entered into to wind up old business with existing creditors
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Partner's liability during winding up phase regarding new business
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Liable in brand new business until either 1_ notice of dissolution given to creditors or 2) it has been 90 days after filing of dissolution with state
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Priority of distribution?
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1st level=Outside trade creditors, and inside partner creditors (when partner borrows $)
2nd level=Capital contributions by partners (not loans) 3rd level=If leftover $ then shared equally in absence of agreement *if 1st or 2nd level not paid out then go after partners personally to get paid |