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85 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
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How many persons must be involved to form a partnership?
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At least 2!
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Is a partnership legally distinct from its partners?
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yup
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What is the governing law?
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RUPA
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May partners agree to abide by different rules fo governing their relationship?
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sure; but you can't waive certain RUPA provisions (like duty of loyalty, right of court to expel partner)
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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
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Is a formal greement required?
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no; parties intent may be implied from their conduct
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Is a writing required?
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usu. no, although if partners want to make it enforceable for more than 1 year, they must execute a writing
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What happens to a partnership formed to achieve an illegal purpose?
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it is void
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Do all the partners have to agree to add a new partner?
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yup - express or implied consent of all partners
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How do courts typically determine whether a partnership existed?
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they look to the intent of the parties; did the parties intend to carry on a business as co-owners?
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what types of things raise a presumption of partnership?
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*sharing of profits
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what are some evidence indicative of partnership?
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*title to property is held in JT or in common
*parties designate their relationship as a partnership *venture requires extensive activity *sharing of gross returns |
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is some loonie who holds himself out as a partner liable to third parties who rely on the rep?
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sure; stop asking me leading questions.
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what is partnership capital?
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$ contributed by each partner for the purpose of carrying on the p'ship's business
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what is partnership property?
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everything that the p'ship owns
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when does the RUPA say that prop. is p'ship property?
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1) titled int eh p'ship's name
2) titled in name of one or more partners, and the instrument notes the titleholdr's capacity as a partner or the existence of the p'ship |
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when is property rebuttably presumed to be p'ship property?
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when it is purchased w/ p'ship funds
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when is property presumed to be a partner's separate property?
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1) instrument transferring title does not indicate p'ship
2) p'ship funds not used to acquire property |
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common law criteria re: p'ship
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*acquired w/ p'ship funds
*use of property in p'ship *entry of property in p'ship books *close relationship b/w property and business operations *improvement of prop. w/ p'ship funds *maintenance of prop w/ p'ship funds |
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is a partner a co-owner of p'ship property?
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no
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Does a partner have the right to use the p'ship property for something other than the benefit of the p'ship?
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no
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what is a partner's interest in the p'ship?
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each partner has a transferable interest - consists of share of p'ship profits, losses & distributions
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p'ship interest is:
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personal property, assignable, and attachable
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Is the p'ship dissolved when one person assigns his interest?
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nah
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does an assignee have rights w/r/t operation of p'ship?
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nah; just entitled to receive profits
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Can I make my bro-in-law a partner?
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not w/o unanimous consent of other partners
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do all partners have equal rights in management?
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yup absent agreement to contrary
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What fiduciary duties do a partner owe to the p'ship?
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1) duty of loyalty
2) duty of care |
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What's the duty of loyalty all about?
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1) account for profits/benefits
2) don't deal adversely 3) don't compete w/ the p'ship |
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What's the duty of care all about?
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*don't be negligent, reckless
*refrain from unlawful conduct or int'l misconduct |
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does a partner have a right to remuneration for services?
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nah
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list me the rights of the partners:
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*equal right management
*distributions *no remuneration for services *indemnification *contribution *inspection *lawsuits |
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Is each partner an agent for the p'ship?
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yup, w/in scope of business
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when would acts of partner not bind p'ship?
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*no authority in that matter
*third party had notice of lack of authority |
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does knowledge mean subjective knowledge?
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OK
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what is req'd to authorize ordinary business?
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majority vote of partners
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What is req'd to authorize extraordinary acts?
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unanimous vote of partners
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when is a partner notified of a fact:
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1) actual knowledge
2) notified 3) reason to know |
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is notice of a fact relating to the p'ship imputed to the p'ship?
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yes, immediately
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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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what is the nature of the liability?
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joint and several
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what is the extent of the liability?
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each partner is personally and individually liable for the entire amount of p'ship obligations
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I just came into this p'ship yesterday; am I personally liable for all this schtuff they pulled last year.
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nah
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I'm retired, am I liable for the schtuff when I was a partner?
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yes, unless there has been payment, release, or novation
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My partner committed a crime; am I liable?
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nah, unless you were an accessory
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what is dissocaiation?
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a change in the relationship of the partners caused by any partner ceasing to be associated in carrying on of the business
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give me the awesome ways that people can dissociate:
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1) notice of express will to w/draw
2) happening of an agreed event 3) expulsion of partner pursuant to agreement 4) partner's bankruptcy 5) partner's death or incapacity to perform partnership duties 6) appointment of receiver 7) termination of a business entity that is a partner |
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what are the consequences of dissociation?
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1) right to participate in management ceases
2) p'ship must buy out his interest 3) p'ship must indemnify him agains known predissociation liabilities |
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can a p'ship be bound by a dissociated partner?
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sure, w/in 2 years, if:
1) act would have bound before dissociation 2) other party reasonably believed and did not have notice |
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what is the dissociated partner's liability to other parties?
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*seemingly similar to when p'ship bound (reverse obviously)
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What's the diff b/w dissociation and dissolution.
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Dissolution usu. requires p'ship business to be wound up.
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several events can cause dissolution
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you should learn 'em
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does the p'ship continue after dissolution?
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yes, until the p'ship is wound up
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who may wind up?
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all living partners have wright to participate in winding up (except those who have wrongfully dissolved, or bankrupt partners)
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can p'ners waive dissolution and continue bsiness
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sure, at any time before the winding up of the p'ship business is complete
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What is the order of distributing p'ship assets?
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1) creditors (including partners who are creditors)
2) partner's acconts |
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what is the major advantage of operating an LLP?
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partners are not personally liable for the LLP's obligations
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how can a p'ship become a LLP?
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vote - if it's says in agreement how many votes it takes to amend p'ship agreement, or amend contribution obligation; if silent, then ALL partners must vote
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is p'ner in an LLP personally liable for obligs of p'ship?
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no, but remains liable for her own wrongful acts
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what is a limited p'ship?
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one or more general partners and one or more limited partners
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what are general partners in an LP liable for?
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personally liable for p'ship obligations
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What are limited partners' in a LP liable for?
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usu. do not have liablity beyond the liability of the agreed-upon contribution
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why is the LP a creature?
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b/c it is a "creature of statute" ha ha
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how can I get into a sweet LP?
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as provided in p'ship agreement, merger or conversion, or consent of all partners
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does a part. in a LP have rights to distribution w/o making a contribution?
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no; but contribution may be in the form of any benefit
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is a limited partner personally liable for obligation of LP?
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no, not solely by reaons of being an LP
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does a general partner in an LP automatically violate duty of loyalty simply by furthering his own interests?
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nah
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does a limited partner owe a fiduciary duty to LP?
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not really, not unles p'ship agmt says otherwise
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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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can I sue my LP?
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sure
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in my LP, when is the approval of all GPs and LPs req'd?
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1) amend p'ship agmt
2) convert to LLLP 3) dispose of property outside usu. course of business 4) admit a new partner 5) compromise a p'ners oblig. to contribute or return improper distrib. |
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I am a GP. Am I entitled to remuneration for services performed for the LP?
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nah; but you can be indemnified for actions in the ordinary course of business
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I am a LP in a LP. Do I hvew any specific rights?
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sure, you can participate in mgt and control; you have right to inspect and copy any p'ship records
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I am an LP in an LP; do I have a right to dissociate?
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nah
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diff b/w regular p'ship and LP:
writing req'd |
regular: no
LP: yes |
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diff b/w regular p'ship and LP:
records office req'd |
regular: no
LP: yes |
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diff b/w regular p'ship and LP:
special name req'd |
regular: no
LP: yes |
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diff b/w regular p'ship and LP:
liability limited? |
regular: no
LP yes (for LPs) |
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diff b/w regular p'ship and LP:
partners have management rights |
regular: yes
LP: no, unless agmt |
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diff b/w regular p'ship and LP:
partners share profits and losses? |
regular: yes, equally
LP: yes, according to value of contributions |
