09. Sole traders, ordinary partnerships. Flashcards
In a sole tradership, there is no … between the individual and the business.
legal distinction
Partnership is the relation which subsists between two or more persons carrying on … with a view to profit.
business in common
… is the relation which subsists between two or more persons carrying on business in common with a view to profit.
Partnership
Partnership is the relation which subsists between two or more persons carrying on business in common with a …
view to profit
A partnership (does / does not) require a written partnership agreement.
does not
A partnership (is / is not) a separate legal entity from its partners.
is not
A ‘person’ in a partnership (can / can not) be a company.
can
Ordinary, or general partnerships are governed by the … (1890).
Partnership Act
Persons who have entered into partnership with one another are called collectively a …
firm
A partnership subsisting for the duration of a single transaction is often known as a …
Joint Venture
The term ‘carrying on in business’ implies …
activity
The receipt by a person of a share of the … is prima facie evidence that he is a partner in the business.
profits
The receipt by a person of a share of the profits is prima facie evidence that he is a … in the business.
partner
The sharing of gross receipts (does / does not) of itself create a partnership.
does not
The sharing of gross receipts does not of itself create a …
partnership
The receipt by a person of a payment contingent on the profits of a business (does / does not) make that person a partner.
does not
Carrying on business ‘in common’ implies a broadly … relationship between partners.
equal
… v Miah (2001): two persons were deemed to be partners in a restaurant business even before it opened, their relationship beginning when they made the decision to do so and started preparations.
Khan
Khan v Miah (2001): two persons were deemed to be partners in a … even before it opened, their relationship beginning when they made the decision to do so and started preparations.
restaurant business
Khan v Miah (2001): two persons were deemed to be partners in a restaurant business even before it opened, their … beginning when they made the decision to do so and started preparations.
relationship
The receipt of payment for a debt contingent on the profits of a partnership (does / does not) make the recipient a partner.
does not
The receipt of a bonus or other variable remuneration contingent on the profits of a partnership (does / does not) make the recipient a partner.
does not
The advance of money by way of loan to a partnership (does / does not) make the lender a partner provided that the contract is in writing and signed by all parties.
does not
The advance of money by way of loan to a partnership does not make the lender a partner provided that the contract is … and signed by all parties.
in writing
The advance of money by way of loan to a partnership does not make the lender a partner provided that the contract is in writing and …
signed by all parties
The receipt of payment for the sale of goodwill contingent on the profits of a partnership (does / does not) make the recipient a partner.
does not
Departure from the Partnership Act (1890) requires … within any partnership agreement.
express provision
In the absence of an express provision to the contrary within any partnership agreement, a partnership is governed by the …
Partnership Act (1890)
In the absence of of contrary agreement, the profits and losses of a partnership are shared … between partners.
equally
Ordinary management decisions within a partnership can be made by … of partners.
a majority
Any decision on changing the nature of the partnership’s business must be …
unanimous
The firm must indemnify any partner against liabilities incurred in the … of the firm.
ordinary course of business
A partner (is / is not) automatically entitled to remuneration for acting in the partnership business [beyond a share of any profits.]
is not
A partnership agreement may be varied with the consent of … of the partners.
all
Partners are bound to render … and full information of all things affecting the partership to any partner or his legal representatives.
true accounts
Partners are bound to render true accounts and … of all things affecting the partership to any partner or his legal representatives.
full information
Partners are bound to render true accounts and full information of all things affecting the partership to any partner or his …
legal representatives
New partners may only be introduced with the … consent of existing partners.
unanimous
The Partnership Act (1890) (does / does not) allow the expulsion of a partner by a majority of other partners in the absence of a partnership agreement.
does not
Upon the dissolution of a partnership, the authority of the partners continues so far as is necessary to … the affairs of the partnership.
wind up
Upon dissolution, … can insist upon the ‘liquidation’ of partnership assets.
any partner
Money which a partner owes but cannot pay back is known as a …
capital deficiency
Partners share a capital deficiency in relation to their …
original capital contribution
A partner must … for any private profits derived from any transaction concerning the partnership undertaken without the consent of the other partners.
account
A partner must account for any private profits derived from any transaction concerning the partnership undertaken without the … of the other partners.
consent
If a partner, without the consent of the other partners, competes with the firm, he must … for all profits made.
account
If a partner assigns their rights, the assignee is ONLY entitled to their …
profit share
If a partner assigns their rights, the assignee (is / is not) entitled to become involved in the management of the firm.
is not
An assignee is only entitled to accounts upon the … of a partnership.
dissolution
Partners are … liable for the acts of their fellow partners in so far as they bind the firm.
jointly and severally
Partners are jointly and severally liable for the acts of their … in so far as they bind the firm.
fellow partners
Partners are jointly and severally liable for the acts of their fellow partners in so far as they …
bind the firm
Every partner is an agent of the … and his other partners for the purpose of the business of the partnership.
firm
Every partner is an agent of the firm and his … for the purpose of the business of the partnership.
other partners
Every partner is an agent of the firm and his other partners for the purpose of the …
buisness of the partnership
Every partner has the authority to … the firm and his other partners for the purpose of the business of the partnership.
bind
A “partner’s” actions DO NOT bind the firm and the other partners if the party with whom they deal either knows they have … or knows that they are not in fact a partner.
no authority
A “partner’s” actions DO NOT bind the firm and the other partners if the party with whom they deal either knows they have no authority or knows that they are not in fact a …
partner
An act or instrument relating to the business of the firm and done or executed in the firm name by an … is binding on the firm and all the partners.
authorised person
An act or instrument relating to the business of the firm and done or executed in the firm name by an authorised person is … on the firm and all the partners.
binding
An act or instrument relating to the business of the firm and done or executed in the firm name by an authorised person is binding on the firm and …
all the partners
Where one partner pledges the … of the firm for a purpose apparently not connected with the firm’s ordinary course of business, the firm is not bound.
credit
Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm’s …, the firm is not bound.
ordinary course of business
Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm’s ordinary course of business, the firm is …
not bound
If a firm issues a … regarding the restriction of a partner to bind the firm then no act in contravention of this notice is binding.
notice
In the event of the death of a partner with partnership debts, these are satisfied from their estate (before / after) their separate debts.
after
In the event of a wrongful act or omission by a partner in the …, the firm is liable to the same extent as the partner.
ordinary course of business
In the event of a wrongful act or omission by a partner in the ordinary course of business, the … is liable to the same extent as the partner.
firm
In the event of a wrongful act or omission by a partner in the ordinary course of business, the firm is liable to the … as the partner.
same extent
In the event of a wrongful act or omission by a partner in the ordinary course of business, the firm is liable to the same extent as the …
partner
If a partner misapplies … recieved for or in custody of the firm, then the firm is liable to make good the loss.
money or property
If a partner misapplies money or property recieved for or in custody of the firm, then the firm is liable to …
make good the loss
Any person ‘…’ themselves to be a partner is as liable as a partner.
holding out
Notice to a partner is USUALLY equivalent to notice to …
the firm
A new partner is not liable to the creditors of the firm for anything done … he became a partner.
before
A retiring partner does not cease to be liable for partnership debts or obligations incurred … his retirement.
before
A retiring partner may be discharged from any exisiting liabilities by an agremeent between themselves, the new …, and its creditors.
firm
A retiring partner may be discharged from any exisiting liabilities by an agremeent between themselves, the new firm, and its …
creditors
Any guarantees given to a firm are deemed to be … when that firm changes.
revoked
The mutual rights and duties of partners may be varied with the consent of … the partners.
all
Property, including stock, acquired on behalf of the firm is known as …
partnership property
‘Partnership property’ is that acquired on behalf of a …
firm
Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of …
the firm
A writ of execution shall not issue against any partnership property except on a judgement against the …
firm
If a County Court Judgement is made against an individual partner, a writ (can / can not) be executed against partnerhsip property.
can not
If a County Court Judgement is made against the firm, a writ (can / can not) be executed against partnerhsip property.
can
Unless a partnership agreement determines otherwise, the Partnership Act provides for … interest on additional capital introduced.
5%
Whether or not a “partner’s” actions bind a firm is dependent upon the perceptions of the …
third party
A retiring partner must ensure that the firm’s … are aware of their retirement to prevent potential liablity for debts incurred post retirement.
creditors
Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm as still being members of the firm until he has … of the change.
notice
Dissolution of a partnership: E* (FT, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE)
expiry
Dissolution of a partnership: E (FT*, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE)
fixed term
Dissolution of a partnership: E (FT, SV*), N, B, D, CoP, I, C (PI, PA, LM, JaE)
single venture
Dissolution of a partnership: E (FT, SV), N*, B, D, CoP, I, C (PI, PA, LM, JaE)
notice
Dissolution of a partnership: E (FT, SV), N, B*, D, CoP, I, C (PI, PA, LM, JaE)
bankruptcy
Dissolution of a partnership: E (FT, SV), N, B, D*, CoP, I, C (PI, PA, LM, JaE)
death
Dissolution of a partnership: E (FT, SV), N, B, D, CoP*, I, C (PI, PA, LM, JaE)
charge of property
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I*, C (PI, PA, LM, JaE)
illegality
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C* (PI, PA, LM, JaE)
court
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI*, PA, LM, JaE)
permanent incapacity
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA*, LM, JaE)
prejudicial action
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA, LM*, JaE)
loss making
Dissolution of a partnership: E (FT, SV), N, B, D, CoP, I, C (PI, PA, LM, JaE*)
just and equitable
A partnership (does / does not) have a separate legal personality distinct from its members.
does not
The liability of a member of a company is USUALLY …
limited
The liability of a partner in an ordinary partnership is …
unlimited
The property of a company is owned by …
that company
The property of a partnership is owned by …
its partners
A partnership may not give … charge security to a lender.
floating
Only a … may give floating charge security to a lender.
company
In the absence of an agreement to the contrary a partnership (does / does not) have perpetual succession.
does not
Notwithstanding a provision in a company’s articles, the transfer of a share transfers … the rights attached to that share.
all
Notwithstanding a provision in a company’s articles, the transfer of a share (does / does not) transfer the management [voting] rights attached to it.
does
A partner may only … their interest in a partnership.
assign
The minimium number of partners in a partnership is …
two
The minimum number of members of a company incorporated under the Companies Act 2006 is …
one
A partnership (must / need not) file accounts with the registrar.
need not
There (is / is not) a statutory requirement that partnership accounts are audited.
is not
A partner in a partnership (does / does not) normally have the right to be involved in management decisions.
does
A partnership is a effectively a collection of … with a common trade.
sole traders
A court (may / may not) deem that two or more persons are partners even if they expressly state that they are not.
may
Any disputes between partners which cannot be resolved using the partnership agreement are settled with reference to the …
Partnership Act (1890)
Partnerships can do anything which they want so long as it is …
legal
Partnership Act (1890): M* E D I C S I N B E D
Management: every partner may take part in the managment of the partnership business.
Partnership Act (1890): M E* D I C S I N B E D
Equality: all the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses whether of capital or otherwise sustained by the firm.
Partnership Act (1890): M E D* I C S I N B E D
Derived benefit: every partner must account to the firm for any benefit derived by him without the consent of the orher partners from any transaction concerning the partnership, or from any use by him of the partnership property name or business connection.
Partnership Act (1890): M E D I* C S I N B E D
Indemnity: the firm must indemnify every partner in respect of payments made and personal liabilities incurred by him in the ordinary and proper conduct of the business of the firm, or about anything necessarily done for the preservation of the business or property of the firm.
Partnership Act (1890): M E D I C* S I N B E D
Competition: if a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.
Partnership Act (1890): M E D I C S I* N B E D
Interest: a partner making, for the purpose of the partnership, any actual payment or advance beyond the amount of capital which he agreed to subscribe, is entitled to interest at the rate of five per cent per annum from the date of the payment or advance.
A partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by him.
Partnership Act (1890): M E D I C S I N* B E D
No person: may be introduced as a partner without the consent of all existing partners.
Partnership Act (1890): M E D I C S I N B* E D
Books: the partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than one), and every partner may, when he thinks fit, have access to and inspect and copy any of them.
Partnership Act (1890): M E D I C S I N B E* D
Expulsion: no majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.
Partnership Act (1890): M E D I C S I N B E D*
Differences: any difference arising as to ordinary matters concerned with the partnership business may be decided by a majority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners.
Where no fixed term has been agreed upon for the duration of the partnership, any partner may retire from the partnership …
at will
Partnership Agreements: A* D D C I S C G T
Accounts and audit.
Partnership Agreements: A D* D C I S C G T
Division of profits.
Partnership Agreements: A D D* C I S C G T
Drawings.
Partnership Agreements: A D D C* I S C G T
Capital and current accounts?
Partnership Agreements: A D D C I* S C G T
Interest.
Partnership Agreements: A D D C I S* C G T
Salaries.
Partnership Agreements: A D D C I S C* G T
Capital requirements and maintenance.
Partnership Agreements: A D D C I S C G* T
Goodwill.
Partnership Agreements: A D D C I S C G T*
Time period.
Partners’ authority is based on the law of …
agency
A partner in a partnership has … duties to that partnership.
fiduciary
If a partnershp defaults on a secured loan, the creditor may take action against the partners individually or sue them in the name of …
the partnership
If a partnership is insolvent, … proceedings may be taken against its partners.
bankruptcy
If a partnership is insolvent, bankruptcy proceedings may be taken against its …
partners
A partnership may be wound up in the same way as an …
unregistered company
Notwistanding the provisions of any partnership agreement, when a partner leaves, dies or becomes bankrupt the partnership is …
dissolved
End of partnerships: D* I S S O L U T I O N S
death
End of partnerships: D I* S S O L U T I O N S
insolvency
End of partnerships: D I S* S O L U T I O N S
sending notice (in a partnership at will)
End of partnerships: D I S S* O L U T I O N S
share of the firm is pledged by a partner to settle their debts
End of partnerships: D I S S O* L U T I O N S
object of the venture is ended
End of partnerships: D I S S O L* U T I O N S
lapse of (specified time)
End of partnerships: D I S S O L U* T I O N S
unable to carry out one’s obligations under the partnership agreement (incapacity)
End of partnerships: D I S S O L U T* I O N S
termination by the court on ‘just and equitable’ grounds
End of partnerships: D I S S O L U T I* O N S
insanity (no longer a ground in England and Wales)
End of partnerships: D I S S O L U T I O* N S
only able to carry on at a loss
End of partnerships: D I S S O L U T I O N* S
nefarious conduct, prejudicially affecting the carrying on of the business
End of partnerships: D I S S O L U T I O N S*
shirty conduct, in persistent breach of the partnership agreement
