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18 Cards in this Set
- Front
- Back
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What is required to form a General Partnership?
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No formalities
Contribution of money/services in return for a share of profits creates presumption of partnership |
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What is the definition of a GP?
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The association of two or more persons who are carrying on as co-owners of a business for profit.
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What are the two things partners in a GP are liable for?
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1. Other partner's torts in the scope of partnership;
2. all debts of the partnership |
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What is an incoming partner in a GP's liability for pre-existing debts?
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What two things are required to end a withdrawing partner's liability for subsequent debts?
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Dissociating partners retain liability on future debts until:
1. actual notice of their dissociation is given to known creditors; AND 2. until publication notice is given to all potential creditors. |
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What is liability by estoppel for a GP?
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One who represents to a third party that a general partnership exists will be liable as if a general partnership exists.
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What duty does GPs owe to each other and the partnership?
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1. Duty of Loyalty
i. no self dealing ii. No usurping p-ship opportunities; AND iii. Can't make a secret profit at the p-ships expense |
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What is an action for accounting?
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- The action brought when a partner breaches their duty in a GP.
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What are the two damages for breach of duty in a GP?
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1. losses that are caused by the breach; AND
2. may disgorge profits made by the breaching partner. |
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What are the two things that a partner in a GP cannot transfer?
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1. specific partnership assets
2. management rights |
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What is the ONLY thing a partner in a GP can transfer?
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Share of profits and surplus
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What determines whether property is personal or a partnership asset?
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The funds that were used to buy it
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What is the rule for control of a GP?
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Absent an agreement, each partner entitled to equal control (vote).
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What is the rule for a salary in a GP?
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- Absent an agreement, partners get no salary
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What is the rule for sharing profits in a GP?
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Absent an agreement, profits are shared equally
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What is the rule for sharing losses in a GP?
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- Absent an agreement, Losses shared like profits
- Note that having a lose share agreement does not change how profits are shared |
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When are the two times there will be dissolution of a GP?
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2. withdrawal of any general partner. |
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What is the priority of distribution in the dissolution of a GP? (4)
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1. outside creditors
2. inside creditors 3. capital contributions (note, if there is a loss other partners have to kick in to satisfy this) 4. Profits and surplus if any |
