Term
PARTNERSHIPS
WHAT FORMALITIES ARE THERE TO FORMING A GENERAL PARTNERSHIP? |
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Definition
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Term
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Definition
| ASSOCIATION ....OF 2 OR MORE PEOPLE...DOING BUSINESS FOR PROFIT |
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Term
LIABILITY OF PARTNERS TO THIRD PARTIES
AGENCY PRINCIPLES APPLY TO PARTNERSHIP
1. WHAT ARE AGENTS OF WHAT?
2. PARTNERS ARE BOUND BY WHAT (TWO) |
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Definition
1. PARTNERS ARE AGENTS OF THE PARTNERSHIP.
2. PARTNERS ARE BOUND BY TORTS OF PARTNERS IN THE SCOPE OF THE PARTNERSHIP BUSINESS.
3. PARTNERS ARE BOUND BY CONTRACTS OF PARTNERS IN THE SCOPE OF THE PARTNERSHIP BUSINESS |
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Term
PARTNERSHIPS
WHAT IS THE GENERAL RULE OF DEBTS |
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Definition
| RULE - GENERAL PARTNERS ARE PERSONALLY LIABLE FOR THE DEBTS OF THE PARTNERSHIP. |
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Term
PARTNERSHIPS
WHAT IS THE GENERAL RULE OF INCOMING PARTNERS IN REGARDS TO DEBTS |
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Definition
| AS A RULE INCOMING PARTNERS ARE NOT LIABLE FOR THE PRE-EXISTING DEBTS - HOWEVER - MONEY PAID INTO THE PARTNERSHIP CAN BE USED BY TEH PARTNERSHIP FOR PAYING PRIOR DEBTS |
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Term
PARTNERSHIPS
WHAT IS THE GENERAL RULE IN REGADS TO DEBTS FOR PARTNERS LEAVING THE PARTNERSHIP |
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Definition
| OUTGOING PARTIES REMAIN LIABLE ON FUTURE DEBTS OF THE PARTNERSHIP UNTIL THEY DIE, UNLESS NOTICE OF WITHDRAWAL HAS BEEN GIVEN TO ALL KNOWN AND POTENTIAL CREDITORS |
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Term
PARTNERSHIPS
WHAT ARE THE GENERAL RULES FOR ESTOPPEL IN AGENCY (BOAT SCHOOL) |
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Definition
| ONE WHO REPRESENTS HIMSELF TO A THIRD PARTY THAT A PARTNERSHIP EXISTS WILL BE LIABLE AS IF A PARTNERSHIP EXISTS |
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Term
PARTNERSHIP
WHAT IS A LIMITED PARTNERSHIP
(MADE UP OF WHO) |
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Definition
| AT LEAST ONE GENERAL AND AT LEAST ONE LIMITED PARTNER. |
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Term
partnerships
how do you form a limited partnership |
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Definition
| File a certificate of limited partnership with departmentof state, including names of all partners |
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Term
partnerships
1. what is a registered limited liability partnership
(RLLP)
2. How is it formed
3. Who is liable for debts |
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Definition
1. A registered limited liability partnership is a partnership that is formed by professionals (Lawyering)
2. By filing a registration with the Department of State
3. No partner is liable for debts of the partnership (Only for his own, and any direct employees) |
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Term
Partnerships
What benefits are there for opening a LLC
(Two) |
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Definition
1. Give owners limited liability
2. Give benefits of partnership tax status |
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Term
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Definition
| Registered limited liability company - Attorneys (Lawyering) |
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Term
Partnership
what rights and liabilities are between partners |
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Definition
Duty of loyalty
a) No self dealing
b) Cant steal partnership opportunities
c) Cant make secret profits at partnership expense |
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Term
partnership
What can a partner do if partner disloyal? |
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Definition
If a partner is disloyal, the other partner/s can have a course of action for accounting. They can recover the breach and disgorge profits made by the breaching party |
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Term
Partnership
What happens in a dispute over partnership property (Who owns what) |
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Definition
| When a dispute arises in a partnership over the legal ownership of assets (Whether owned or not by a partnership) one has to look at the source of the funds used to aquire that property. IF the funds used were from the partnership, the property will belong to teh partnership. IF however a partner used his own funds then the property is personal property |
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Term
Property
What are the partners rights in partnership property in regards to the dispbursement of property
(Three catagories of assets) |
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Definition
a) Land, leases and equipment owned by teh partnership or owned by partnership assets, may not be transferred to a third party by any one partner.
b) Share of profit and surplus - Partner may transfer his share of profit and surplus to third party (Will , sale etc)
c) Share in management - A partner may no sell his share in management - Management is seen as a asset owned by the partnership itself and cant be exchanged. |
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Term
Partnership
Management
Who has what votes? |
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Definition
| Unless a agreement, each partner has equal votes |
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Term
Partnership
What salaries do partners get |
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Definition
Unless agreement - NONE
Exception
Partners can receive compensation for the duties in winding up a partnership |
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Term
Partnership
If a partnership is being winded up, what is the pecking order for funds in the partnership? |
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Definition
a) Creditors of partnership get first bite
b) Loans made to the partnership by partners
c) Capital paid in is paid out to the relevant partners
d) IF any funds left over, distributed equally (unless agreement) between partners
Note: If loss, partners may have to pay additional monies in to the partnership to cover losses. |
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Term
Partnership
What happens when a partnership is winded up, and what compensation is payable/owed
(Three) |
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Definition
1. Partners are compensated for duties if winded up
2. partnerships and its general partners remain liable for old business (Existing business)
3. partnerships and its general partners remain liable for new business, until notice of disolution given to all known and potential creditors. |
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Term
Partnerships
1. How do you dissolve a partnership
2. What is dissolution
3. What is winding up
4. What is termination |
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Definition
1. The death or withdrawl of a General partner.
2. The beginning of the process of termination of the partnership.
3. The period in which the partnership assets are sold, creditors paid etc
4. The final end after distribution of the partnership funds. |
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Term
partnerships
How are profits and losses shared |
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Definition
If no agreement - Equally
Same for losses |
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Term
Partnerships
What are the characteristics of a LLC |
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Definition
The characteristics of a Partnership formed as a LLC are that:
a) the members control the LLC
b) Members have limited liquidity (Members intersts are NOT freely transferrable)
c) LLC have a limited life - can be dissolved
Summary - Limited Liability/liquidity/life/tax |
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