Term
|
Definition
| Association of 2 or more persons engaged as co-owners of a business for profit. |
|
|
Term
|
Definition
| Prima facie evidence of partnership. In other words, if there is a sharing of profits, you have a partnership. However, exchange of money doesn't always mean sharing in profits. It could be broker fees or royalties or owed money. |
|
|
Term
| UPA/RUPA views of a partnership |
|
Definition
Under UPA - partnership is not a separate legal entity
Under RUPA- considered separate legal entity |
|
|
Term
|
Definition
| Must file owners names with county clerk, and publish notice 1 day a week for 3 weeks in a popular circulates newspaper |
|
|
Term
| If partnership is in writing, what MUST be included? |
|
Definition
| 1) Name of partners 2) capital contribution 3) restriction of parties 4) Division of profits/losses 5) Salaries |
|
|
Term
| If partnership is in writing, what CANNOT be included? |
|
Definition
| 1) Modifications or restrictions of partners access of info 2) eliminate partners duty of liability 3) Restrict partners decision to quit |
|
|
Term
|
Definition
| Total amount of property and money partners have put into business |
|
|
Term
|
Definition
| Property acquired by partnership |
|
|
Term
| Use of Partnership Property |
|
Definition
| Each partner has 100% right to use 100% of property 100% of the time for PARTNERSHIP REASONS |
|
|
Term
| What can a partner use as collateral? |
|
Definition
CANNOT assign his part in partnership property
CAN assign his personal interest in partnership unless an agreement prohibits it When he signs over to the bank the bank only has claim on distributions to partners
ALSO a partner who assigns 100% of interest, unless for loan collateral, can be expelled from partnership |
|
|
Term
| UPA/RUPA Duties of Partners |
|
Definition
UPA- Partners have fiduciary duties
RUPA- partners have duty of loyalty |
|
|
Term
| Duties of Partners in Partnership |
|
Definition
1) Duty of Obedience
2) Duty of Care (UPA- act to best of your ability RUPA- cannot be grossly negligent of knowingly break the law)
3) Duty of good faith |
|
|
Term
| It is expected that partners DO NOT... |
|
Definition
1) Take/deal with partnership benefits without agreement of partners
2) Engage in self dealing. When in doubt the interest of partnership comes before personal interest
3) Compete with partnership |
|
|
Term
|
Definition
| If there is no agreement, profits and losses are shared equally among partners. Partners do not have right to capital contribution until partnership is done/liquidated |
|
|
Term
| Rights to Repayment of Loans |
|
Definition
When liquidating partnership, first person to repay is the creditors.
UPA- outside creditors get paid first, then inside creditors
RUPA- outside and inside creditors are equal |
|
|
Term
| Partners' Right to Compensation |
|
Definition
| No partner has any right to compensation unless its in a written agreement or if they are winding up a partnership. |
|
|
Term
| Right to Participate in Management |
|
Definition
| All partners have the right, unless written agreement says otherwise. |
|
|
Term
|
Definition
UPA- can only sue partners, need Suit for Accounting (asking court to dissolve partnership)
RUPA- can sue partnership without dissolution and partnership may sue 1 partner. |
|
|
Term
| Liability in Contract and in Tort |
|
Definition
| All partners are jointly and severally liable |
|
|
Term
|
Definition
| Person who makes representation that he/she is a partner (even though they are not) is liable |
|
|
Term
|
Definition
| 1) Breach of partnership agreement 2) Partner expelled for misconduct 3) Bankruptcy |
|
|
Term
|
Definition
| 1) Die 2) Partnership at will, quit 3) Court determines you cannot fulfill duties (insane or disabled) 4) Leave following partnership terms |
|
|
Term
| In event of a Dissociation... |
|
Definition
| Right to management ends, and duty not to compete ends. |
|
|
Term
| Dissociation by act of partners |
|
Definition
Partner quits, purpose fulfills, all partners agree, death, incapacity, bankruptcy
RUPA: if wrongful, partnership doesn't end. If half or more agree within 90 days, partnership can end. |
|
|
Term
| Dissociation by Operation of Law |
|
Definition
| If some event makes it unlawful, partnership ends |
|
|
Term
| Dissociation by Order of the Court |
|
Definition
| Agrees its unreasonable to do business upon dissolution; all actual authority ends |
|
|
Term
|
Definition
| Partner in charge of winding up is entitled to compensation Fiduciary duties exist except for duty to not compete. Pay back creditors, and if money left over, return of capital contributions |
|
|
