Association of 2 or more persons who carry on as co-owners of a business FOR PROFIT.

Key = profit sharing 

all contract and tort liabilities of the partnership

includes co-partners torts 

YES, she remains liable for all obligations incurred while she was a partner 

AND retains liability on future debt until she dies or gives noticeable withdrawal to known and potential creditors

DUTY OF LOYALTY

(no self-dealing, cannot usurp partnership opportunities, nor make secret profit at partnership's expense)

Action for Accounting

(partnership may recover losses caused by breach and force disgorgement of profits)

Belong to General Partnership

Cannot be transferred without partnership authority (illiquid)

Personal property owned by the individual partner

May be transferred by individual partners to third parties

Property of partnership itself

no individual partner may transfer its share in management 

Can't sell your vote

ASK WHOSE MONEY WAS USED TO PURCHASE

Partnership funds --> partnership property

Individual funds --> individual property

Default Management Rule

One partner, one ____

VOTE

(partners entiteld to equal control)

Partners get NO salary

but may be compensated for helping to wind up partnership

Any material change in partnership occurs, including death of a partner or withdrawal of a partner

--> automatic dissolution 

Period between dissolution and termination in which remaining partners liquidate partnerships assets in order to satisfy partnerships creditors 

*can get paid for doing this

old business (transactions entered into to wind up old business with existing creditors)

new business (new business transactions) UP until notice of dissolution is given to existing/potential creditors

1. Outside Creditors*

2. Inside Creditors*

3. Capital Contributions made by partners*

4. Profits and Surplus (divided equally absent agreement)

*must be paid

Partnership with at least one General Partner and at least one limited partner 

must file limited partnership certificate with state that includes names of general partners

Liable for all partnership obligations

have right to manage business and operations

not personally liable for partnerships obligations (only their individual contributions)

cannot manage business/operations without forfeiture of limited liability status 

Must register with state as RLLP (certificate of RLLP) indicating your profession

limited liability --> no partner is personally liable for partnership debts or obligations or co-partner torts (limited to own personal contributions) 

*always liable for their own wrongdoings

Limited Liability of shareholders in a corporation but taxed like partnership

(no tax to partnership, only on partners profits)

1. Articles of organization must be filed with state

2. Summary of Articles of organization must be published once a week for 6 weeks in a row in at least 2 newspapers (one of which has to be in LLC's place of business)

Control (members control, can be delegated to managers if next two are met)

Limited Liquitidity (right to profits only transferrable/liquid asset)

Limited Life (disassociation generally causes dissolution)