Term
| WV has adopted what partnership act? |
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Definition
| Rivised Uniform Partnership Act (RUPA) |
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Term
| Generally the RUPA provides a default set of rules and the partners are free to agree via partnership agreement, thus waiving the RUPA. What provisions of the RUPA can not be waived? |
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Definition
1) A partners right of acess to books and records;
2)A partner's duty of loyalty and care (although the agreement can reduce the scope of this duty if the agreement is not manifestly unfair);
3) The power to dissociate as a partner;
4) The power to expell a partner;
5) The requirement that the partnership be wound up in the event of either the illegallity of the busines or certain judicial determinations that continuing the business is not practicable or equitable;
6) The rights of 3d parties
7) A partner's duty of good faith and fair dealing |
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Term
| What capacity is required under the RUPA to enter into a partnership? |
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Definition
| The basic rule is the same as respects a principle in agency; anyone can be a partner who is capable of entern=ing into a binding contract. |
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Term
| What if the would be partner is found to lack capacity? |
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Definition
| The noncapable person is not persaonlly liable for the obligations of the partnership or for breaches of the partnership agreement. The NC is bound to the extent of any capital contribution made to the partnership. |
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Term
| Under the default rules of the RUPA, if a new person wishes to join the partnership how many of the current partners must agree? |
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Definition
| All, unless the partnership agreement |
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Term
| A person who recieves a share of the profits of a business is presumed to be a partner unless the profits were recieved in payment: |
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Definition
1) of a debt
2) for services as a contractor or as wages or other compensation of an employee;
3) of rent
40 of an annuity or other retirment or health benefit to a beneficiary or representative of a deceased or retired partner;
5) Of interest on a loan, even though the amount varies with the profits of the bisiness; or
6) for the good will of a business, by installments or otherwise |
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Term
| If a person is held out by another as being a partner, under the RUPA are they required to deny the relationship? |
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Definition
| No. No one is actually a partner unless they consent to the holding out. Mere failure to deny a representation of partnership does not give rise to liability as a purported partner. Thus there is no need to file a statement of dissociation. |
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Term
| what is the effect of holding another out as your partner to the one who is wrongfully holding th eperson out? |
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Definition
| Under the RUPA the person holding out anoth is bound. It is important ot note that only those members of the partnership who hold the nonpartner out will be bound. |
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Term
| What are the two classification of property under the RUPA? |
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Definition
| Partnership Capital and Partnership Property. |
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Term
| Under the RUPA what property is deemed to be partnership property? |
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Definition
1) It is titled in the partnership name;
2) It is titled in the name of a partner and the intrument transferring title notes the title holder's capacity as a partner or the existence of the parneteship |
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Term
| Under the RUPA, if property is purchased with partnership funds or credit what is the result? |
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Definition
| a rebuttable presumption arises that the ppty is partnership ppty regardless of in whose name title is held. |
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Term
| Under the RUPA is an asset is used by the partnership, what must the partner do to establish that the ppty is not partnership ppty? |
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Definition
1) the ppty must be titled in the name of a partner(s) and not the partnership;
2) the instrument of transfer does not indicate the person's capacity as a partner or mention the exsistence of the partnership;
3) partnership funds were not used;
then the ppty is rebuttably presumbed to be seperate ppty, even when the ppty is used for partnership purposes. |
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Term
| The RUPA does not govern nontitled ppty. Therefore the common law criteria would be applied. What factors are considered by the Ct to determine if an asset is partnership ppty? |
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Definition
1) aquisition of the ppty with partnership funds
2) use of the ppty by the partnership
30 entry of the ppty in the partnership books
4) a close relationship between the ppty and the business operations of the partnership;
5) improvement of the ppty with partnership funds;
6) Maintenance of the ppty w/ partnership funds. |
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Term
| Under the RUPA may a creditor reach partnership assets to satisfy the personal debts of a partner? |
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Definition
| No. A partner is not a co-owner and has no interest in partnership ppty. |
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Term
| Under the RUPA what are the transferable interests that a partner possesses? |
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Definition
1) The right to his share of the profits and losses;
2) the right to recieve distrubutions |
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Term
| Under the RUPA does the assignment of the partner's interest dissolve the partnership? |
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Definition
| No, even when the assignment is an involentary |
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Term
| Under the RUPA what are the Assignee's rights? |
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Definition
Only to the assigned distrubutions. Unless there is another agreement the assignee may not 1) interfere in the management;
2) to require any information or account of the partnership transactions; or
3) inspect the partnership books. |
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Term
| Under the RUPA decisions regarding matters within the ordinary course of business may be controlled by a vote of how many of the partners? |
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Definition
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Term
| Under the RUPA decisions regarding matters outside the ordinary course of business require the consent of how many partners? |
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Definition
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Term
| What duties are included in the duty of loyalty? |
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Definition
1) to account for profits, ppty, opportunities
2) to refrain from dealing with the partnership as or on behalf of a party having an interest adverse to the partnership;
3) to refrain from competing with the partnership. |
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Term
| When can a partner bring an action against the partnership under the RUPA? |
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Definition
To enforce any right
1) created by the RUPA
2) created by the partnership agreement
3) otherwise belonging to the partner
NOTE: such actions include an equitable action for an accounting |
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Term
| Under the RUPA each partner is considered an agent of the partnership. What is the paradigm used to examine the authority of agency? |
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Definition
| it tends to follow apparent authpority- the authority that a 3d party would reasonably believe a partner has based on his being held out by the partnership as a partner. |
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Term
as to apparent authoethority the RUPA provides that:
1) the act of any partner
2) for apparently carrying on in the ordinary course of the partnership business or business of the kind
3) binds the partnership
UNLESS |
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Definition
1) the partner had NO authority to act for the partnership in the particular matter; AND
2) the person with whom the partner was dealing KNEW or had recieved notification that the partner lacked authority. |
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Term
| What is the general rule with regard to partner voting? |
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Definition
| Usually a majority of the partners is all that is required. |
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Term
| When is a Unanimous vote required by the partners? |
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Definition
1) Acts outside the ordinary course of business; and
2) amendments to the partnership agreements. |
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Term
| In a transaction involveing ppty other than real ppty, if a statement is filed with the dept. of state what is the effect on the outside party? |
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Definition
| the 3d party is not considered to have knowledge of any limitation on the partners authority. |
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Term
| When a grant of authority is filed with the dept of state concerning a limitation of a partner to enter into real estate transactions, what is the effect on 3d parties? |
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Definition
| None, unless the limitation is also filed in the county recording office. |
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Term
| Under the RUPA, when does a partner have notice of a fact? |
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Definition
the partner has notice of a fact when:
1) there is actual knowledge
2) there is notification of the fact; or
3) the partner has reason to know based on the surrounding circumstances. |
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Term
| What is the extent of a partners tort liability? |
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Definition
Any tort committed by a partner or employee in the ordinary course of partnership business or with authority.
NOTE: This liability covers fraud committed by a copartner in the course of partnership business even though the other partners have no connection with, knowledge of, or participation in the fraud. |
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Term
| What is the Contract liability of partners? |
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Definition
| Partners are liable on contracts made by a partner in the scope of the partnership business and on any other contracts expressly authorized by the partners. |
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Term
| Although partners are jointly and severly liable in contract and in tort a judgement creditior may NOT levy or execute against a partner's personal assets unless... |
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Definition
1) the partnership assets have been exhausted
2) the partnership is a debtor in bankrupcy
3) the partner has agreed that the creditor need not exhaust partnership assets
4) A court grants the judgment creditor permission to proceed against the individual assets of a partner; OR
5) the partner is independently liable in law or contract. |
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Term
| Under the RUPA what is the liability of an incoming partner as to exsisting partnerhip debts? |
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Definition
| A person admitted as a partner into an exsisting partnership is NOT persoanlly liable for any partnership obligation incurred before the person's admission as a partner. NOTE: any ppty or capital the incoming partner contributes to the partnership is at risk for satisfying exsisting partnership obligations. |
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Term
| What is the liability of an outgoing (dissociated) partner? |
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Definition
That partner remains liable on all obligations incurred by the partnership while a mmbr unless there has been:
1) payment
2) RELEASE;
3) novation; or
4) the creditor has agreed to a material alteration in the obligation w/o the partner's consent. |
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Term
| What are the events that result in dissociation of a partner? |
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Definition
1) The express will of the partner to withdraw
2) the happening of an agreed upon event
3) Expulsion pursuant to the terms of the partnership agreement
4)expulsion by unanimous vote of the remaining partners
5) expulsion via judical decree
6) the partners becoming bancrupt
7) the death of a partner
8) incapacity
9) appointment of a reciever for or distribution of substantially all of the partners interst
10) termination of a partner that is a business entity. |
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Term
| When a partner dissociates the duty of care and loyalty is generally terminated except as to what? |
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Definition
| The duty remains as to matters arising before the dissociation. |
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Term
| If a partner is dissociated the the partnership MUST buy out the dissociated partner's interest based on what? |
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Definition
The greater of;
1) the partnerships liquidation value or
2) the value of the business as a going concern w/o the dissociated partner. NOTE: interst must be paid on the buyout price from the date of the dissociation to the date of payment. Damages for wrongful dissociation reduce the amount due to the dissociated partner. |
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Term
| What power does a dissociated partner have to bind a partnership? |
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Definition
The partnership will be bound for a period of 2 years after the dissociation by acts that would have bound the partnership if not for the dissociation so long as the other party to the transaction:
1) reasonably believed the dissociated partner was a partner
2) did not have and was not deemed to have notice or knowledge of the dissociation. |
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Term
| Who may wind up the business of the partnership? |
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Definition
1) all partners
2) Remaining partners (like in bancrupcy)
3) Suriving partners
4) Executor (of the last survivng partner)
NOTE: a partner who wrongly dissolves a partnership is not entitled to wind up the affairs of the partnership. |
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