Term
| requirements to make a general partnership |
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Definition
1. 2 or more persons
2. who carry on a for-profit business
3. as co-owners |
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Term
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Definition
| partnership for specific purpose |
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Term
| profit sharing creates presumption of partnership except when profit is from |
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Definition
1. debt payments
2. interest
3. rent as profit
4. wages to non-owning employees
5. goodwill payments
6. annuities |
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Term
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Definition
1. must make representation he's a partner (when he isn't) or consent to such representation; &
2. 3rd party must detrimentally rely |
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Term
| GP violates duty of loyalty when |
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Definition
1. steals from partnership (includes business opportunity)
2. competing w/partnership
3. self-dealing |
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Term
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Definition
| avoid grossly negligent, reckless or intentional misconduct |
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Term
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Definition
| may limit duty of loyalty as long as it isn't "manifestly unreasonable" |
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Term
| default profit/loss sharing |
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Definition
| share equally regardless of contribution |
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Term
| agreement address profit sharing but not loss sharing |
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Definition
| share losses same as profits |
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Term
| unilateral transfer of partnership rights & responsiblities to 3rd party |
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Definition
partner can transfer right to profits
partner can't transfer responsibility to manage to 3rd party |
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Term
| partnership bringin in new partners |
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Definition
| may be done by unanimous vote of partners |
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Term
| do partners have right to income for services rendered to partnership by default? |
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Definition
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Term
| events causing partner dissociation |
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Definition
1. partner gives notice saying he wants out
2. event in partnership agreement
3. other partners expel partner
4. court expels partner
5. remaining in partnership would be illegal
6. partner goes bankrupt
7. partner dies
8. partner is declared incapable of performing
9. an entity that is partner terminates |
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Term
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Definition
1. partner in partnership for term leaves before term ends
2. partner in joint venture leaves before venture is complete
3. partner expelled by court
4. partner goes bankrupt
5. entity partner terminates on its own |
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Term
| what must partnership do after partner dissociates |
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Definition
| buy dissociate partner's interest within 120 days of written demand |
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Term
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Definition
value of the assets; or
the value of the business as going concern |
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Term
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Definition
express - partnership says partner has authority
implied - partner's reasonable belief he must act |
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Term
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Definition
| must be performed in ordinary course of business |
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Term
| partnership creditor vs partner's assets |
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Definition
| must exhaust partnership assets before going after partner's assets |
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Term
| general liability exists for how long after conversion to limited partnership |
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Definition
| 90 days if person thinks he's dealing w/general partner |
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Term
| what events trigger dissolution of partnership at will |
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Definition
| any dissociation in a partnership at will (unless partners agree to continue w/out dissociated partner) |
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Term
| what events trigger dissolution of partnership for term/undertaking |
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Definition
1. term ends or undertaking accomplished
2. all partners agree to dissolve
3. after a dissociation a majority of partners agree to dissolve |
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Term
| what events trigger dissolution of any partnership |
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Definition
1. some event in agreement happens
2. it would be illegal to continue the partnership
3. judicial decree on application by partner
4. judicial decree on application by purchase of a partner's interest
partners can always agree to continue despite the a |
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Term
| priority of claims in partnership liquidation |
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Definition
1. creditors (including partners who loaned partnership $)
2. partners |
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Term
| paying off creditors partners in dissolution of partnership |
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Definition
1. pay off creditors
2. give each partner what they initially contributed (capital account)
3. split profits |
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Term
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Definition
1. LLP partners get limited liability
2. must file w/state
3. must have "limited liability partnership" or "LLP" in name |
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Term
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Definition
| either say "limited partnership" "LTD" "LP" or "limited" |
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Term
| LP partner characteristics |
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Definition
has both
general partner (active in management & liable for debts)
limited partner (have no liability for partnership debts) |
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Term
| default profit sharing in LP |
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Definition
| contributions from each partner |
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Term
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Definition
| like LP but general partners have limited liability |
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Term
| dissociated partners bind partnership when |
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Definition
3rd party
1. reasonably believes that the dissociated partner is a partner,
2. does not have notice of the partner’s dissociation, and 3. is not deemed to have knowledge of the dissociated partner’s lack of authority |
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