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42 Cards in this Set

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PARTNERSHIP: An _____________ of two or more persons to carry on a business ______ ___________.
PARTNERSHIP: An ASSOCIATION of two or more persons to carry on a business FOR PROFIT.
A partnership is a LEGAL _________ distinct from its __________.
A partnership is a LEGAL ENTITY distinct from its PARTNERS.

Ex. A partner may sue or be sued in the partnership name.
GOVERNING LAW - PARTNERSHIP

REVISED __________ PARTNERSHIP ACT (RUPA) provides a _________ set of rules.

HOWEVER, partners can agree (in _____________ AGREEMENT) to abide by DIFFERENT rules for governing relationships among themselves.

NOTE: The RUPA will govern _______ those issues _____ provided for in the P.A.
GOVERNING LAW - PARTNERSHIP

REVISED UNIFORM PARTNERSHIP ACT (RUPA) provides a DEFAULT set of rules.

HOWEVER, partners can agree (in PARTNERSHIP AGREEMENT) to abide by DIFFERENT rules for governing relationships among themselves.

NOTE: The RUPA will govern ONLY those issues NOT provided for in the P.A.
JOINT VENTURE: Partnership for a single ____________ (project).

NOTE: Treat a JOINT VENTURE like a ____________!
JOINT VENTURE: Partnership for a single UNDERTAKING (project).

NOTE: Treat a JOINT VENTURE like a PARTNERSHIP!
No one can become a PARTNER w/o the express or implied __________ of _____ partners.
No one can become a PARTNER w/o the express or implied CONSENT of ALL partners.
OPERATION - MANAGEMENT

Partners have _____ rights in managing partnership business.
ie. One partner, one _______

Decisions in __________ COURSE-> _________ VOTE

Decisions ___________ ordinary course->__________ CONSENT

AMENDMENTS to the partnership agreement->___________ CONSENT
OPERATION - MANAGEMENT

Partners have EQUAL rights in managing partnership business.
ie. One partner, one VOTE

Decisions in ORDINARY COURSE---> MAJORITY VOTE

Decisions OUTSIDE ordinary course--->UNANIMOUS CONSENT

AMENDMENTS to partnership agreement--->UNANIMOUS CONSENT
OPERATION - FIDUCIARY DUTIES

o DUTY OF ___________

o DUTY OF CARE

o DUTY TO _________
OPERATION - FIDUCIARY DUTIES

o DUTY OF LOYALTY

o DUTY OF CARE

o DUTY TO DISCLOSE
OPERATION - PARTNER'S RIGHTS

o NO right to a __________ (except for WINDING UP)

o _____________ from partnership for EXPENSES while carrying on partnership business

o Right to BOOKS and _________
OPERATION - PARTNER'S RIGHTS

o NO right to a SALARY (except for WINDING UP)

o INDEMNIFICATION from partnership for EXPENSES while carrying on partnership business

o Right to BOOKS and RECORDS
OPERATION - PARTNERS' LIABILITY

Partners are ________ and SEVERALLY LIABLE for the _________ amount of partnership obligations.

CREDITOR must first try to satisfy the ___________ from partnership ________.
OPERATION - PARTNERS' LIABILITY

Partners are JOINTLY and SEVERALLY LIABLE for the ENTIRE amount of partnership obligations.

CREDITOR must first try to satisfy the JUDGMENT from partnership ASSETS.
Each partner in a partnership is _________ LIABLE for the _________ amount of all partnership obligations.
Each partner in a partnership is PERSONALLY LIABLE for the ENTIRE amount of all partnership obligations.
Partners are only liable to ________ PARTIES for TORTS committed WITHIN THE _____ of ________ PARTNERSHIP BUSINESS.
Partners are only liable to THIRD PARTIES for TORTS committed WITHIN THE SCOPE of ORDINARY PARTNERSHIP BUSINESS.
CRIMINAL LIABILITY

Partners are ____ criminally liable for the crimes committed by a _________ w/i the ________ of partnership business...

UNLESS they participated in the commission of the crime either as __________ or ___________.
CRIMINAL LIABILITY

Partners are NOT criminally liable for the crimes committed by a CO-PARTNER w/i the SCOPE of partnership business...

UNLESS they participated in the commission of the crime either as PRINCIPALS or ACCESSORIES.
CIVIL LIABILITY - EXTENT OF

Partner who pays MORE THAN HIS FAIR SHARE of an obligation is entitled to ___________ from other partners.

Partner who pays WHOLE OBLIGATION of partnership is entitled to ______________.
CIVIL LIABILITY - EXTENT OF

Partner who pays MORE THAN HIS FAIR SHARE of an obligation is entitled to CONTRIBUTION from other partners.

Partner who pays WHOLE OBLIGATION of partnership is entitled to INDEMNIFICATION.
CIVIL LIABILITY - EXTENT OF

Each partner is __________ and INDIVIDUALLY LIABLE for ________ AMOUNT OF PARTNERSHIP OBLIGATIONS.

NOTE: This is called ________ and ________ LIABILITY.
CIVIL LIABILITY - EXTENT OF

Each partner is PERSONALLY and INDIVIDUALLY LIABLE for ENTIRE AMOUNT OF PARTNERSHIP OBLIGATIONS.

NOTE: This is called JOINT and SEVERAL LIABILITY.
CIVIL LIABILITY OF PARTNERS

Liability is joint and several (____ or MORE partners may be sued) for _____ partnership obligations.
CIVIL LIABILITY OF PARTNERS

Liability is joint and several (ONE or MORE partners may be sued) for ALL partnership obligations.
CIVIL LIABILITY OF PARTNERS

Partners are liable for ____ K's entered into by other partners in the _______ of PARTNERSHIP BUSINESS or w/ _________ of the partnership.
CIVIL LIABILITY OF PARTNERS

Partners are liable for ALL K's entered into by other partners in the SCOPE of PARTNERSHIP BUSINESS or w/ AUTHORITY of the partnership.
CIVIL LIABILITY - INCOMING PARTNER

An incoming partner is ____ personally liable for obligations _________ by the partnership ________ he became partner.
CIVIL LIABILITY - INCOMING PARTNER

An incoming partner is NOT personally liable for obligations INCURRED by the partnership BEFORE he became partner.
CIVIL LIABILITY - OUTGOING (DISSOCIATED) PARTNER

An outgoing (dissociated) partner remains _________ for obligations arising WHILE he was a partner UNLESS there has been _________, RELEASE, or __________.
CIVIL LIABILITY - OUTGOING (DISSOCIATED) PARTNER

An outgoing (dissociated) partner remains LIABLE for obligations arising WHILE he was a partner UNLESS there has been PAYMENT, RELEASE, or NOVATION.
CIVIL LIABILITY - OUTGOING (DISSOCIATED) PARTNER

An outgoing partner can ALSO be liable for acts done _______ dissociation.
CIVIL LIABILITY - OUTGOING (DISSOCIATED) PARTNER

An outgoing partner can ALSO be liable for acts done AFTER dissociation.
NOTE: An OUTGOING PARTNER remains liable for all partnership obligations incurred _________ he was a partner, wheras an INCOMING PARTNER has NO LIABILITY for obligations incurred ________ she became a partner.
NOTE: An OUTGOING PARTNER remains liable for all partnership obligations incurred WHILE he was a partner, wheras an INCOMING PARTNER has NO LIABILITY for obligations incurred BEFORE she became a partner.
DISSOLUTION

Unlike ___________, dissolution generally requires partnership business to be ________ ____.
DISSOLUTION

Unlike DISSOCIATION, dissolution generally requires partnership business to be WOUND UP.
Does DISSOCIATION of a partner necessarily cause dissolution and winding up of partnership business?
NO!

DISSOCIATION of a partner does NOT necessarily cause dissolution and winding up of partnership business.
LIMITED PARTNERSHIP: Composed of one or more _______ PARTNERS + one or more ________ PARTNERS.
LIMITED PARTNERSHIP: Composed of one or more GENERAL PARTNERS + one or more LIMITED PARTNERS.
LIMITED PARTNERSHIP - PARTNER LIABILITY

Liability of a limited partner for partnership debts is limited to the EXTENT of ________ he has agreed to contribute.
LIMITED PARTNERSHIP - PARTNER LIABILITY

Liability of a limited partner for partnership debts is limited to the EXTENT of CAPITAL he has agreed to contribute.
RIGHTS OF PARTNERS - MANAGEMENT

Partners have an _______ _______ to participate in management of the partnership (UNLESS P.A. provides otherwise).
RIGHTS OF PARTNERS - MANAGEMENT

Partners have an EQUAL RIGHT to participate in management of the partnership (UNLESS P.A. provides otherwise).
RIGHTS OF PARTNERS - DISTRIBUTIONS

Partners have whatever rights are granted in the P.A. as to distribution of ________.

If the agreement is SILENT, partners share profits (and losses) _________.
RIGHTS OF PARTNERS - DISTRIBUTIONS

Partners have whatever rights are granted in the P.A. as to distribution of PROFITS.

If the agreement is SILENT, partners share profits (and losses) EQUALLY.
RIGHTS OF PARTNERS - REMUNERATION

Partners have ____ right to remuneration for their services to partnership EXCEPT for ________ UP partnership business.
RIGHTS OF PARTNERS - REMUNERATION

Partners have NO right to remuneration for their services to partnership EXCEPT for WINDING UP partnership business.
RIGHTS OF PARTNERS - INDEMNIFICATION

A partner has a right to be indemnified by fellow partners for ________ incurred ON ________ of the partnership.
RIGHTS OF PARTNERS - INDEMNIFICATION

A partner has a right to be indemnified by fellow partners for EXPENSES incurred ON BEHALF of the partnership.
RIGHTS OF PARTNERS - CONTRIBUTION

A partner has a right to contribution from fellow partners where he has paid ______ THAN HIS _______ of a partnership liability.
RIGHTS OF PARTNERS - CONTRIBUTION

A partner has a right to contribution from fellow partners where he has paid MORE THAN HIS SHARE of a partnership liability.
RIGHTS OF PARTNERS - INSPECTION

Partners have a right to INSPECT and ______ partnership books.
RIGHTS OF PARTNERS - INSPECTION

Partners have a right to INSPECT and COPY partnership books.
RIGHTS OF PARTNERS - LAWSUITS

A partner may sue his _________ and vice versa in an action AT ____ or IN _____.
RIGHTS OF PARTNERS - LAWSUITS

A partner may sue his PARTNERSHIP and vice versa in an action AT LAW or IN EQUITY.
FIDUCIARY DUTIES - DUTY OF CARE

Requires partner to refrain from engaging in __________, _________, or UNLAWFUL CONDUCT or ___________ MISCONDUCT.
FIDUCIARY DUTIES - DUTY OF CARE

Requires partner to refrain from engaging in NEGLIGENT, RECKLESS, or UNLAWFUL CONDUCT or INTENTIONAL MISCONDUCT.
PARTNERSHIP "AT WILL"

Partnership can be ____________ by a ________ at ANY TIME.
PARTNERSHIP "AT WILL"

Partnership can be TERMINATED by a PARTNER at ANY TIME.
DUTY OF LOYALTY - BREACH OF

If a partner breaches his duty of loyalty, he is liable to partnership for any _______ earned as a result of the breach.
DUTY OF LOYALTY - BREACH OF

If a partner breaches his duty of loyalty, he is liable to partnership for any PROFITS earned as a result of the breach.
DUTY OF LOYALTY - REQUIREMENTS

The duty of loyalty requires that the partner:

(1) ACCOUNT FOR ALL ________ or other benefits derived by him in connection w/ partnership business;

(2) NOT deal w/ the partnership as one w/ an ________ INTEREST; and

(3) NOT _________ w/ the partnership.
DUTY OF LOYALTY - REQUIREMENTS

The duty of loyalty requires that the partner:

(1) ACCOUNT FOR ALL PROFITS or other benefits derived by him in connection w/ partnership business;

(2) NOT deal w/ the partnership as one w/ an ADVERSE INTEREST; and

(3) NOT COMPETE w/ the partnership.
RIGHTS UPON DISSOLUTION

Upon dissolution, a partner is entitled to a __________ of her account.
RIGHTS UPON DISSOLUTION

Upon dissolution, a partner is entitled to a SETTLEMENT of her account.
A partnership may sue or be sued IN ITS _____ NAME.

HOWEVER, to reach a partner's personal assets, there must be a ___________ against the individual partner.
A partnership may sue or be sued IN ITS OWN NAME.

HOWEVER, to reach a partner's personal assets, there must be JUDGMENT against the individual partner.
Decisions on matters INSIDE the ordinary course of business = __________ VOTE

Decisions on matters OUTSIDE the ordinary course of business = __________ CONSENT
Decisions on matters INSIDE the ordinary course of business = MAJORITY VOTE

Decisions on matters OUTSIDE the ordinary course of business = UNANIMOUS CONSENT
ACTUAL AUTHORITY: That which a partner _________ BELIEVES he has based on the communications between the ___________ and HIMSELF.
ACTUAL AUTHORITY: That which a partner REASONABLY BELIEVES he has based on the communications between the PARTNERSHIP and HIMSELF.
DISTRIBUTION OF ASSETS - FINAL ACCOUNTING

(1) Pay _________ FIRST

(2) Return ___________ CAPITAL CONTRIBUTIONS

(3) DIVIDE ________ among partners
DISTRIBUTION OF ASSETS - FINAL ACCOUNTING

(1) Pay CREDITORS FIRST

(2) Return PARTNERS' CAPITAL CONTRIBUTIONS

(3) DIVIDE PROFITS among partners
LIMITED PARTNERSHIPS have both _________ and _________ PARTNERS.
LIMITED PARTNERSHIPS have both GENERAL and LIMITED PARTNERS.
LIMITED PARTNERSHIPS

GENERAL PARTNERS:

o RIGHT TO _________

o _________ LIABILITY


LIMITED PARTNERS:

o ____ RIGHT TO MANAGE

o _________ LIABILITY
LIMITED PARTNERSHIPS

GENERAL PARTNERS:

o RIGHT TO MANAGE

o UNLIMITED LIABILITY


LIMITED PARTNERS:

o NO RIGHT TO MANAGE

o LIMITED LIABILITY