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Partnerships
Partnerships
10
Law
Professional
12/04/2012

Additional Law Flashcards

 


 

Cards

Term
Partnership - Def.
Definition
Under Revised Uniform Partnership Act (RUPA), an association of 2 or more persons to carry on as co-owners of a business for profit as a partnership
Term
Apparent Authority
Definition

RUPA provides:

1. The act of any partner, for apparently carrying on in the ordinary course of business, binds the partnership UNLESS:

a. the partner had no authority to act

b. the 3rd party KNEW that the partner did not have authority 

Term
Dissolution
Definition

Distinguish disassociation - where there is a change in the relationship of partners..

 

Partnership at will - automatically dissolves upon notice of express will of one of prtnrs

- dissolves upon winding up - period between disso and termination in which the remaining prtnrs liquidate assets to satisfy debts

- partner gets compensation for winding up

 

Priority $$ - 1. creditors, 2. Capital contributors by prtnrs, 3. profits back to prtnrs

Term
Disassociation
Definition

A partner becomes disassociated from ptnrshp IF:

1. Notice by partner's express will to w/draw

2. expulsion by unanimous vote by Court order

3. Partner incapacity

 

- after partner disassociated, others MUST by out his shares

Term
Limited Partnerships
Definition

At least 1 general partner & at least 1 limited partner

Formation: MUST file LP certificate w/ SOS

 

LPs have limited liability (not liable for ptnrshp obligations)

- Generally, may NOT control or manage business

- GP subject to all liabilities of a partner

- both share profits & losses based on their agreement

Term
Limited liability partners
Definition

- partners are NOT personally liable for LLPs obligations

- MUST file w/ SOS

- name must end in -- LLP

Term
Duties owed partnerships
Definition

Duty of loyalty

Duty of care

Equal control in management

no right to salary - right to profits

Term
Duty of loyalty
Definition

Partners may NOT:

1. engage in self-dealing

2. usurp partnership opportunity

3. no secret profits

Term
Duty of care
Definition
Requires partner to refrain from reckless, negligent or unlawful conduct
Term
Profits & losses
Definition

1. absent an agreement to the contrary - profits are shared equally

2. absent an agreement - losses are shared like profits

 

* remember ANYTHING can be modified by agreement. Therefore very important to mention "absent agreement"

 

Each partner MUST be repaid their loans & capital contributions

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