2. Florida Partnership and LLC Rules

Question 1

What is the definition of a Florida partnership?

Answer 1

A partnership is an association of two or more persons to carry on as co-owners a business for profit.

Question 2

Partnership law is based on the law of what?

Answer 2

Contract and agency.

Question 3

A partnership is a legal entity distinct from its partners, except ________

Answer 3

Except with respect to partners’ personal liability for partnership obligations.

Question 4

What may be held in the partnership name?

Answer 4

Title to land.

Question 5

Under RUPA, partnerships may _______ or be _______ in the partnership name

Answer 5

Under RUPA, partnerships may sue or be sued in the partnership name.

Question 6

What does RUPA generally provide?

Answer 6

RUPA generally provides a default set of rules for partnerships.

Question 7

Partners are ______ to agree, through a _____________, to abide by different rules for governing the relationship among themselves. In such a case, RUPA will govern only what?

Answer 7

Partners are free to agree, through a partnership agreement, to abide by different rules for governing the relationship among themselves. In such a case, RUPA will govern only those issues not provided for in the partnership agreement.

Question 8

Certain RUPA provisions cannot be waived, like __________

Answer 8

The duty of loyalty and the right of a court to expel a partner.

Question 9

A partnership is formed as soon as _____?

Answer 9

A partnership is formed as soon as two or more persons associate to carry on as co-owners a business for profit.

Question 10

Is a formal agreement required for formation of a partnership?

Answer 10

No formal agreement is required for formation of a partnership.

Question 11

Parties’ intent may be implied from what?

Answer 11

Parties intent may be implied from their conduct.

Question 12

Is a writing required for formation of a partnership?

Answer 12

No writing is required for formation of a partnership.

Question 13

Even though no writing is required for formation of a partnership, due to the Statute of Frauds, if partners wish to have an enforceable agreement to remain partners for more than one year _______.

Answer 13

Due to the Statute of Frauds, if partners wish to have an enforceable agreement to remain partners for more than one year, they generally must execute a writing reflecting their agreement.

Question 14

Who may be a partner in a partnership?

Answer 14

Anyone capable of entering into a binding contract may be a partner in a partnership.

Question 15

A would-be partner who lacks capacity is liable only to _____________.

Answer 15

A would-be partner who lacks capacity is liable only to the extent of his or her capital contribution.

Question 16

The partnership with a would-be partner who lacks capacity is not _____ and will continue on until ________.

Answer 16

A partnership with a would-be partner who lacks capacity is not void. It will continue to exist until steps are taken to dissolve it.

Question 17

What type of partnership is void?

Answer 17

A partnership formed to achieve an illegal purpose is void.

Question 18

Courts will not compel an _______ or _______ of a void partnership’s affairs.

Answer 18

Courts will not compel an accounting or a settlement of a void partnership’s affairs.

Question 19

Unless otherwise agreed, no one can become a partner in a partnership without what?

Answer 19

Unless otherwise agreed, no one can become a partner in a partnership without the express or implied consent of all partners.

Question 20

It is wise for a partnership to file a _________ with the Department of State, which can give _______ knowledge of the extent of the partners’ authority to enter into _______.

Answer 20

A partnership should file a Statement of Partnership Authority with the Department of State, which can give constructive knowledge of the extent of the partners’ authority to enter into real estate contracts on behalf of the partnership.

Question 21

Since no true formalities are required to form a partnership, it may be necessary to determine whether __________.

Answer 21

It may be necessary to determine whether the relationship between parties is a partnership or something else.

Question 22

To determine whether the relationship between parties is a partnership or something else, the court generally will look to what?

Answer 22

Generally to determine whether the relationship between parties is a partnership or something else, the court will look to the intent of the parties.

Question 23

If the parties intended to carry on a business as co-owners for profit, a partnership exists even if what?

Answer 23

A partnership exists even if the parties did not subjectively intend to be partners.

Question 24

Where parties’ intent is uncertain, courts consider what two rules, what is the first?

Answer 24

1. Sharing of profits raises a presumption of partnership, unless the share was received as payment of a debt, for services rendered, as rent payment, as an annuity or other retirement benefit, as interest of an alone, or for the sale of goodwill of a business.

Question 25

Where parties’ intent is uncertain, courts consider what two rules, what is the second?

Answer 25

2. Evidence indicative of a partnership, that does not raise the presumption of a partnership includes title to property is held in joint tenancy or in common, the parties designate their relationship as partners, the venture undertaken by the parties requires extensive activity, the sharing of gross returns.

Question 26

When is a partner liable to third parties who extend credit to the partnership in reliance on the representation of a non-partner as a partner?

Answer 26

She will be liable to third parties who extend credit to the partnership in reliance on the representation when a person by words or conduce represents himself as a partner or consents to being represented by another as a partner.

Question 27

A non-partner is not liable to third parties who extend credit to the partnership in reliance on the representation of a non-partner as a partner when?

Answer 27

When the non-partner merely fails to deny a representation of partnership. She must actually consent to the representation.

Question 28

When a partner holds another out as a partner, he thereby makes that person his what?

Answer 28

His agent to bind him to third parties. However, only those partners who know of or consent to this will actually be bound.

Question 29

What is partnership capital?

Answer 29

Partnership capital is the property or money contributed by each partner for the purpose of carrying on the partnership’s’ business.

Question 30

What is partnership property?

Answer 30

Partnership property is everything the partnership owns- including both capital and property subsequently acquired in partnership transactions.

Question 31

Is there a restriction on what may be partnership property?

Answer 31

There is no restriction on what may be partnership property.

Question 32

Sometimes it may be difficult to determine whether property is _______ or _________.

Answer 32

It may be difficult to determine whether property is partnership property or the individual property of a partner.

Question 33

RUPA has provisions for determination concerning the ownership of what kind of property?

Answer 33

RUPA has provisions for determination concerning the ownership of titled property.

Question 34

RUPA provisions concerning titled property includes both ________?

Answer 34

RUPA titled property includes both titled personal property and titled real property.

Question 35

Common law has criteria for analyzing property that is what?

Answer 35

Common law has criteria for analyzing property that is untitled.

Question 36

The three provisions of the RUPA that determine titled property are what?

Answer 36

Property that is

1. deemed to be Partnership Property
2. presumed to be Partnership Property
3. presumed to be partner’s Separate Property.

Question 37

Under RUPA, property deemed to be partnership property is what?

Answer 37

Under RUPA, property deemed to be partnership property is either titled in the partnership name or it is titled in the name of one or more partners and the instrument transferring title notes the titleholder’s capacity as a partner or the existence of a partnership.

Question 38

Under RUPA, property presumed to be partnership property is what?

Answer 38

Under RUPA, property presumed to be partnership property is property purchased with partnership funds, meaning partnership cash and partnership credit.

Question 39

Under RUPA, property presumed to be a partner’s separate property is what?

Answer 39

Under RUPA, property presumed to be a partner’s separate property is property held in the name of one or more partners and the instrument transferring title does not indicate the person’s capacity as a partner or mention the existence of a partnership and partnership funds were not used to acquire the property.

Question 40

Property can still be considered to be partner’s separate property, under RUPA, even if what?

Answer 40

Property can still be considered to be partner’s separate property, under RUPA, even if the property is used for partnership purposed.

Question 41

Common law criteria for determining untitled property includes what?

Answer 41

Common law criteria for determining untitled property includes factors that tend to indicate that the property was intended to be partnership property.

Question 42

Common law factors that tend to indicate that the property was intended to be partnership property include what?

Answer 42

The acquisition of the untitled property with partnership funds, the use of the property by the partnership in conducting its business, the entry of the untitled property onto partnership books as a partnership asset, the close relationship between the untitled property and the business operations of the partnership, the improvement of the untitled property with partnership funds, and the maintenance of the property with partnership funds.

Question 43

Does a partner have transferable interest in specific property of the partnership?

Answer 43

A partner is not a co-owner of partnership property and thus has no transferable interest in any specific property of the partnership.

Question 44

Does a partner have a right to use partnership property?

Answer 44

A partner has no right to use partnership property other than for the benefit of the partnership.

Question 45

Does each partner have a transferable interest in the partnership? If so, what does it consist of?

Answer 45

Each partner has a transferable interest in the partnership, which consists of her share of partnership profits, losses, and distributions.

Question 46

What is a partner’s share of profits or losses?

Answer 46

Absent an agreement to the contrary, a partner shares equally in the partnership profits and must contribute to the loss sin proportion to her share of the profits.

Question 47

A partner’s interest in the partnership is what three things?

Answer 47

A partner’s interest in the partnership is treated as personal property, transferable without dissolving the partnership, and is attachable.

Question 48

What does the transfer of partnership interest give the transferee?

Answer 48

Transfer of the partnership interest gives transferee no rights with regard to the operation of the partnership. It merely entitles the transferee to receive profits to which the transferring partner would otherwise be entitled.

Question 49

What is the restriction on partner status selling?

Answer 49

Partners cannot sell partner status without unanimous consent of the other partners.

Question 50

What portion of rights in the management of the partnership business does each partner have?

Answer 50

Absent an agreement to the contrary, all partners have equal rights in the ;management of the partnership business.

Question 51

Decisions involving matters within the ordinary course of business can be controlled by _____, while matters outside the ordinary course of business require _______.

Answer 51

Ordinary course of business matters can be controlled by a majority vote, while matters outside the ordinary course of business require unanimous consent.

Question 52

What fiduciary duties does each partner owe to the partnership?

Answer 52

The duty of loyalty and the duty of care.

Question 53

What is the duty of loyalty?

Answer 53

The duty of loyalty requires the partner to account for all profits or other benefits derived by the partner in connection with partnership business, not deal with the partnership as one with adverse interest, and not compete with the partnership.

Question 54

What is the duty of care?

Answer 54

The duty of care requires the partner to refrain from engaging in neglect, reckless, or unlawful conduct, or intentional misconduct.

Question 55

What is the amount in each partners’ account?

Answer 55

Each partner is deemed to have an account in an amount equal to the partner’s contributions plus the partner’s share of profits or minus her share of losses.

Question 56

Is there a right to remuneration for services rendered to the partnership?

Answer 56

Absent an agreement the contrary, there is no right to remuneration for services rendered to the partnership, except for services performed in winding up the business.

Question 57

What is the consequence of a partner impliedly or expressly proving to devote time to the partnership business and failing to do so?

Answer 57

She may be charged in an accounting for damages caused to the partnership.

Question 58

Indemnification is proper with regard to what?

Answer 58

Indemnification is proper with regard to payments made and personal liabilities reasonably incurred in the ordinary and proper conduct o business or for payments made beyond the partner’s contribution.

Question 59

What action can a partner take if has been required to pay or satisfy more than her share of the partnership debt?

Answer 59

She may require the other partners to contribute their pro rata shares.

Question 60

Where must books and information by kept by a Florida partnership?

Answer 60

Books and information must be kept at the chief executive office.

Question 61

Does each partner have a right to inspect or copy the partnership books?

Answer 61

Each partner has the right to inspect and copy the partnership books.

Question 62

Upon demand, a partner must render what?

Answer 62

Each partner must render true and full information of all things affecting the partnership upon demand.

Question 63

A partnership may sue or be sued in its own name, however a judgment against a partnership _______.

Answer 63

A judgment against a partnership alone is not a judgment against the individual partners.

Question 64

A partner may bring an action against a partner for breach of what?

Answer 64

Either breach of the partnership agreement or breach of a fiduciary duty.

Question 65

A partner may bring an action against the partnership or other partners to enforce what?

Answer 65

To enforce any right created by the partnership agreement or the Revised Uniform Partnership Act or that otherwise belongs to the partner.

Question 66

Every partner is an agent of the partnership for what?

Answer 66

Every partner is an agent of the partnership for the purpose of its business.

Question 67

What kind of act will bind a partnership and thereby other partners?

Answer 67

An act performed by any partner with actual or apparent authority or that is ratified by the partnership will bind the partnership and thereby other partners.

Question 68

What three categories of liability may a partnership suffer?

Answer 68

The three categories of liability for a Florida partnership are in contract, tort, or for breach of trust.

Question 69

The act of any partner for apparently carrying on in the ordinary course of the partnership business or business of the kind carried out by the partnership binds the partnership unless

Answer 69

The partner had no authority to act for the partnership in that particular matter and the person with whom the partner was dealing knew of had received notice that the partner lacked authority.

Question 70

As agents of the partnership, partners have apparent authority to bing the partnership to

Answer 70

Any contract within the scope of the partnership business.

Question 71

If a contract is outside the scope of partnership business, the partnership will generally

Answer 71

not be bound unless the partner had actual authority.

Question 72

Apparent authority is not limited to transactions that are in fact within the ordinary course of partnership business but extends to

Answer 72

Extends to transactions that apparently would be for carrying on business of the kind run by the partnership.

Question 73

The partnership will not be bound by the act of a partner if

Answer 73

the partner lacked actual authority and the person with whom the partner dealt either knew or received notification of such fact.

Question 74

Knowledge is defined under RUPA as

Answer 74

subjective knowledge, what the person actually knew; what someone should have known is irrelevant.

Question 75

Notification is defined under RUPA as effective when what?

Answer 75

notice comes to the person’s attention or when it is duly delivered.

Question 76

If notification limiting a partner’s authority that is duly delivered to a third party, can the third party rely on on apparent authority with regard to the limitation?

Answer 76

The third party cannot rely on apparent authority with regard to limitation duly delivered to the third party, even if the third party has not read the notification.

Question 77

Who may transfer property held in the name of the partnership?

Answer 77

Any partner may transfer property held in the name of the partnership.

Question 78

If the partnership property is held in the name of one or more partners who are identified as such but the partnership is to named, is transfer by title holders in their own names effective?

Answer 78

If partnership property is held in the name of one of more partners who are identified as such but the partnership is not named, transfer by titleholders in their own names is effective.

Question 79

If the transferring partners lacked authority, the partnership may recover the property from the initial transferee but not from who?

Answer 79

A bona fide purchaser for value.

Question 80

IF the partnership’s interest is not indicated in the instrument transferring the property, the transfer may be made by those whose?

Answer 80

Whose names the property is held.

Question 81

If the transferee givers value without notice of lack of authority, she takes the partnership how?

Answer 81

Free of partnership interest as a BFP.

Question 82

A partnership is bound by the act of a partner if the partner has what?

Answer 82

Actual authority.

Question 83

Actual authority is what?

Answer 83

Te authority a partner reasonably believes she has based on the communications between the partnership and partner. Actual authority can come from the partnership agreement or a vote of the partners.

Question 84

What vote is required for authorization of ordinary business? What vote is required for the authority of extraordinary acts?

Answer 84

Majority vote.

Unanimous vote.

Question 85

What is a statement of authority?

Answer 85

A statement of authority grants or limits a partner’s authority to enter into transactions on behalf of the partnership.

Question 86

The statement of authority must be filed where in general and where for real property transfers?

Answer 86

The department of State.

The count recorder

Question 87

A grant of authority in a properly filed statement of authority is _________, while a properly filed limitation of authority to transfer real property gives purchasers _______ but not _________.

Answer 87

Conclusive in favor of a bona fide purchaser for value.
Gives purchasers constructive knowledge of a lack of authority,
But not of limitation with regard to any other transaction.

Question 88

Under RUPA a partner has notice of a fact when what?

Answer 88

When the partner has notice of a fact because the partner has actual knowledge of the fact, is notified of the fact, or even has reason to know of the fact based on surrounding circumstances.

Question 89

Notification to a partner is effective if and when?

Answer 89

It comes to a partner’s attention and when it is delivered to a place of business held out by the partner as a place for receiving communications.

Question 90

A partner’s notice of a fact is imputed to the partnership immediately unless what?

Answer 90

The partner having notice is participating in a fraud against the partnership.

Question 91

Where one partner, acting within the scope of partnership business, defrauds a third party,t the partnership will be what?

Answer 91

Liable.

Question 92

If the fraudulent action involves a transaction outside the scope of partnership business, the partnership will what?

Answer 92

Not be held liable.

Question 93

If a parter seeks to defraud the partnership as part of a transaction with a third party and that party is aware of the fraud, the partnership will be what?

Answer 93

Not liable to the third party.

Question 94

The partnership is liable if a partner misapplies the money or property of a third party, received by him ______.

Answer 94

within the scope of his apparent authority or received in the ordinary course of business and misapplied while in the custody of the partnership.

Question 95

Partners are liable for all contracts entered into by a partner in the scope of what?

Answer 95

The scope of partnership business or with authority of the partnership.

Question 96

Partners are liable for all torts committed by who?

Answer 96

Any partner or employee of the partnership within the ordinary course of partnership business or or with authority from the partnership.

Question 97

Liability is _____ and _____ for al obligations of the partnership, whether raising in ____, ____, or _______.

Answer 97

Liability is joint and several for all obligations of the partnership.
Whether arising in contract, tort, or for breach of trust.

Question 98

However, judgment in not personally binding on a partner unless what?

Answer 98

She has been served and the creditor has exhausted all partnership assets.

Question 99

Each partner is personally and individual liable for the entire amount of partnership obligations with rights of what?

Answer 99

Right of contribution and indemnification.

Question 100

aN incoming partner is not personally liable for what obligations?

Answer 100

Obligations incurred by the partnership before the person became a partner exit to the extent of her capital contribution.

Question 101

An outgoing ot dissociated partner remains liable for obligations arising while she was a partner in the partnership unless what?

Answer 101

Unless there has been payment, release, or novation.

Question 102

Liability generally continues until how long after she has filed a notice of dissociation with the Department of State?

Answer 102

90 days after she has filed a notice of dissociation with the Department of State.

Question 103

Partners will not be criminally liable for what?

Answer 103

Crimes of other partners committed within the scope of the partnership business unless the other partners participated in the commission of the crime either as principals or accessories.

Question 104

Dissociation is what?

Answer 104

The change in the relationship caused by a parter’s ceasing to be associated in the carrying on of the business.

Question 105

Dissociation does not what?

Answer 105

Does not necessarily result in the winding ;up of a partnership business.

Question 106

Dissociation is caused by what?

Answer 106

a partner’s express will to withdraw, the happening of an agreed upon event, the expulsion of a partner pursuant to the partnership agreement, unanimous vote of the partners, or judicial decree upon a partner’s misconduct, the bankruptcy, death or incapacity of a partner, the appointment of a receiver of a partner’s transferable interest, or the termination of an entity partner.

Question 107

A partner who dissociates in breach of the partnership agreement or prior to an greeted upon time or event is what?

Answer 107

Liable for damages caused by the wrongful dissociation.

Question 108

Upon a partner’s dissociation, hr right to what ceases?

Answer 108

Her right to participate in management ceases.

Question 109

The partner’s fiduciary duties generally terminate except with respect to what?

Answer 109

Matters arising before dissociation.

Question 110

The partnership must purchase (buy out) the partner’s interest at either _____ or _____.
Also the partnership must indemnify her against what?

Answer 110

Liquidation or going-concern value.

Any known pre dissociation liabilities not incurred by the dislocating partner’s acts.

Question 111

If the partnership is for a definite term or a particular undertaking and a partner wrongly dissociates before the term expires or the undertaking is completed, the partner is not entitle to what?

Answer 111

Payment of the buy-out price until the term expires or the undertaking is completed unless the partner can establish that earlier payment will not cause undue hardship to the partnership business.

Question 112

Interest must be paid on the buy-out price from when?

Answer 112

The date of dissociation to the date of payment.

Question 113

A partnership can be bound by an act of a dissociated partner undertaken within how long?

Answer 113

One year after dissociation if: the act would have bound the partnership before dissociation and the other party to the transaction reasonably believed the dissociated partner was still a partner and did not have notice of the dissociation.

Question 114

A dissociated partner can be liable for obligations incurred by the partnership for how long after the partner dissociates?

Answer 114

One year if: when entering the transaction the other party reasonable believed the dissociated partner was still a partner and did not have notice of the dissociation.

Question 115

A dissociated partner can cut short this period of liability by filing a notice of ip is dissolved and its business must be wound up when dissociation with the department of state giving which effectively what?

Answer 115

deems all persons to have notice of a dissociation 90 days after such noticed is filed

Question 116

A partnership is dissolved and its business must wound up when what 5 possible things occur?

Answer 116

When:

1. notification by a partner at will of intent to withdraw if given;
2. in a partnership for a definite term or particular undertaking *within 90 days after a partner’s death, bankruptcy, or wrongful dissociation, *when at least half of the remaining partners with to wind up the partnership *all partners consent to wind up the business, or *the term expires or the undertaking is completed;
3. the happening of an event agreed to in the partnership agreement requiring winding up occurs;
4. the happening of an event making the partnership business illegal; or
5. the issuance of a judicial decree that the business is to be wound up.

Question 117

A partnership will be bound by a partner’s post dissolution acts if either what?

Answer 117

If either the acts are appropriate for winding up the business or the third party did not have notice of the dissolution.

Question 118

Third party will be deemed to know of a a dissolution how long after a statement of dissolution, if any is filed?

Answer 118

90 days after a statement of dissolution is filed with the Department of State.

Question 119

If all partners agree to a dissolution or the partnership term expires that al partners have the right to what?

Answer 119

Wind up the partnership business.

Question 120

If the partnership is dissolved by a partner’s death or bankruptcy, the surviving or remaining partners have the right to what?

Answer 120

Wind up the partnership business.

Question 121

A partner who wrongfully dissolves is not entitled to what?

Answer 121

Wind up the affairs of the partnership business.

Question 122

Any time beforip liabilities are paid in the order:e the winding up is complete, the partners may what?

Answer 122

creditors, including partners who ar creditors, then partners’ accounts. Decide to waive the dissolution and continue the partnership by unanimous vote of the partners who have not wrongfully dissolved.

Question 123

Such a waiver does not affect the rights of persons who ______.

Answer 123

Have relied on the dissolution before receiving notice of the waiver.

Question 124

A solvent partnership’s assets are reduced to cash and partnership liabilities are paid in the what order?

Answer 124

Creditors, including partners who are creditors;

partners’ accounts.

Question 125

Where a partner is priced to pay more than his share of the partnership’s debts, he is entitled to what?

Answer 125

Contribution from the other partners to equalize the shares.

Question 126

Partnership creditor have priority over individual partners’ creditors with regard to what?

Answer 126

Partnership assets

and parity with separate creditors as to separate property.

Question 127

What is a limited partnership LP comprised of?

Answer 127

one of more general partners and one or more limited partners.

Question 128

LPs are created under what?

Answer 128

Specific statutory authority.

Question 129

The liability of a limited partner of a LP for partnership debts is generally limited to what?

Answer 129

The capital that she contributes to the partnership.

Question 130

What Act governs all Florida partnerships?

Answer 130

The Florida Revised Limited Partnership Act of 2005.

Question 131

A certificate of Limited Partnership must be filed where?

Answer 131

With the Department of State.

Question 132

What must the certificate of Limited Partnership include?

Answer 132

signatures of each general partner, setting forth the name of the partnership, names and addresses of the agent for service of process and of each general partner and whether the partnership is a limited liability partnership.

Question 133

What must a limited partnership maintain in Florida?

Answer 133

An office with records of the certificate, partnership agreement, the partnership’s tax returns for the three most current years.

Question 134

The registered office of a limited partnership may be changed how?

Answer 134

By filing a statement of the change with the department of state.

Question 135

A limited partnership must maintain in the state what?

Answer 135

An agent for the service of process.

Question 136

The agent for a limited partnership may be changed by what?

Answer 136

By filing a statement with the department of state.

Question 137

An agent of a limited partnership may resign by what?

Answer 137

filing a statement with the department of the sate and mailing a statement to the principal office of the partnership.

Question 138

Every limited partnership agreement must have a writing that sets out what?

Answer 138

the amount of cash or agreed value of all property or services to be contributed by each parter, the times at which future contributions are to be made, for any person who is both a general partner and a limited partner, a specification of transferable interest the person owns in each capacity, and any events of dissolution.

Question 139

A limited partnership is a creature of what?

Answer 139

Statute

Question 140

Because a limited partner is a creature of statute, what is true?

Answer 140

A limited partnership can exist only on compliance with the limited partnership statute.

Question 141

If one partner tells another that she may have limited liability, but there is no filing with the department of state then

Answer 141

There is no statutory compliance and a limited partnership is not created and all partners are subject to full liability

Question 142

The limited partnership name may contain what?

Answer 142

The name of any partner.

Question 143

The limited partnership must contain what?

Answer 143

the words limited partnership or limited or the abbreviation L.P. Ltd. or LP. Also the name must be distinguishable from the name of any other entity of file with the division of corporations of the department of state.

Question 144

May a person be both a general partner and a limited partner in a limited partnership?

Answer 144

Yes, but she is subject to the obligations, duties, and restrictions of a general partner when she acts as a general partner and those of a limited partner when she acts as a limited partner.

Question 145

How may a person become a general partner in a limited partnership?

Answer 145

As provided in the partnership agreement, as the result of a conversion or merger, with the consent of all the partners, following the dissociation of a limited partnership’s last general partner by the provisions accorded for nonjudicial dissolution.

Question 146

How may a person become a limited partner?

Answer 146

As provided in the partnership agreement or as the result of a conversion or merger, or with the consent of all the partners.

Question 147

What forms may contribution of a partner take?

Answer 147

Cash, property, services rendered, or a promise to contribute such in the future.

Question 148

Is a limited partner’s promise to contribute enforceable?

Answer 148

No, unless it is in writing and sign by the limited partner.

Question 149

A partner’s obligation to make a contribution may be compromised only by what?

Answer 149

The consent of all the partners. However, a previous creditor may enforce the original obligation

Question 150

If a partner properly receives the return of her contribution, she remains liable to the partnership for

Answer 150

The return for one year, but only to the extent necessary to discharge partnership debts.

Question 151

If the return of a partner’s contribution was improper, she remains liable fore

Answer 151

The entire amount of the return for six years.

Question 152

A general partner is ______ and ______ liable for what?

Answer 152

A general partner is jointly and severally liable for all obligations of the limited partnership.

Question 153

A person who becomes a general partner of an existing limited partnership is ______.

Answer 153

Not personally liable for preexisting obligations.

Question 154

A limited partner is liable for what?

Answer 154

A limited partner is not personally liable for an obligation of the limited partnership solely by reason of being a limited partner, even if the limited partner participates in the management and control of the limited partnership.

Question 155

What right do both general and limited partners have in a limited partnership?

Answer 155

To share in distributions in proportion to the value of the partners’ contributions; to transfer their right to distributions (but transferee’s participation in the partnership is limited to the right to receive the transferred distributions and the transferring partner remains a partner, and the transfer does not constitute a dissociation or cause a dissolution); to transact business with the partnership (lend money to it); to apply for dissolution when it is not reasonable practical to carry on the business); to maintain a direct or derivative action against the limited partnership.

Question 156

A general partner of a limited partnership also has what rights of a partner in a regular partnership?

Answer 156

All the rights of a partner in a regular partnership, including the right to manage the partnership and the right to receive information.

Question 157

A limited partner has the right to what?

Answer 157

Participate in mangement and control of the limited partnership without becoming personally liable for the limited partnership’s obligations and to receive information.

Question 158

A general partner of a limited partnership owes what duties?

Answer 158

Limited fiduciary duties of care and loyalty but does not violate the duty of loyalty merely because the general partner’s conduct furthers his own interests.

Question 159

A limited partner has what duty to the limited partnership?

Answer 159

A limited partner has no duty to the limited partnership or to any other partner solely by reason of being a limited partner. But to the extent a limited partner has management duties under the partnership agreement, she owes, with respect to the exercise of those duties, the duties of loyalty and care.

Question 160

May a person who erroneously believes that she is a limited partner avoid general partner liability? What will she be liable for?

Answer 160

Yes if upon discovering the mistake, she files a appropriate certificate of limited partnership or certificate of amendment or withdraws from future equity participation by filing a certificate of withdrawal.
But she is liable as a general partner to any third party who actually and in good faith believed she was a general partner if the transaction occurred prior to her filing an appropriate certificate or withdrawing from future equity participation.

Question 161

In addition to the events causing the dissociation of a partner in a general partnership, a limited partner is dissociated upon what?

Answer 161

expulsion by the unanimous consent of the other partners if it is unlawful to carry on the partnership activities with the person as a limited partner, there has been a transfer of all of the person’s transferable interest in the partnership, the limited partner is a limited liability company or partnership that has been dissolved and whose business is being wound up or in certain cases where the limited partner is a corporation and ceases to exist or conduct business as a corporation or conversion or merger of the limited partnership if the person ceases to be a limited partner as a result.

Question 162

Upon a person’s dissociation as a limited partner she has what rights?

Answer 162

She has no further rights as a limited partner and any interest she owned in the partnership she then owns as a mere transferee.

Question 163

In addition to the events causing dissociation of a partner in a general partnership, a general partner is dissociated upon what?

Answer 163

Upon the limited participation in a conversion or merger if the limited partnership is not the converted or surviving entity, or the person ceases to be a bengal partner as a result of the conversion or merger.

Question 164

A person’s dissociation as a general partner is wrongful only when what?

Answer 164

It is in breach of an express provision of the partnership agreement or it occurs before the termination of the limited partnership and the person withdraws as a general partner by express will, is expelled as as general partner by judicial determination, is dissociated by becoming a debtor in bank raptly, or the person is not an individual trust or estate and is dissociated because it willfully dissolved or terminated.

Question 165

A person who wrongfully dissociates as a general partner is liable to the limited partnership and to the other partners for what?

Answer 165

Liable for damages caused by the dissociation.

Question 166

The effects of dissociation as a general partner are similar to those of a partner in what?

Answer 166

In a general partnership.

Question 167

A limited partnership can be bound by acts of a dissociated general partner only if what?

Answer 167

The act would have bound the limited partnership before the dissociation, or less than two years have passed since the dissociation and the other party does not have notice of the dissociation and reasonable believes the dissociated general partner s a general partner.

Question 168

If the limited partnership is bound by the acts of a dissociated general partner, the dissociated general partner is liable to whom?

Answer 168

The partnership and any general partner or other person damaged.

Question 169

Does a general partner’s dissociation discharge his liability as a general partner for obligations of the limited partnership incurred before dissociation?

Answer 169

No, a general partner’s dissociation does not discharge his liability as a general partner for obligations of the limited partnership incurred before dissociation.

Question 170

What is a dissociated general partner not generally liable for _____?

Answer 170

A dissociated general partner is not generally liable for limited partnership obligation incurred after his dissociation with two exceptions.

Question 171

What are the two exception to the rule that a dissociated general partner is not generally liable for a limited partnership obligation incurred after his dissociation?

Answer 171

Except:

1. if the general partner’s dissociation resulted in the dissolution and winding up of the partnership’s activities, the dissociated general partner is liable to the same extent as a general partner on an obligation incurred by the limited partnership after dissolution and
2. if the dissociation did not result in the dissolution and winding up of the partnership, the dissociated general partner is liable only if a general partner would be liable on the transaction or less than two years have passed since the dissociation and the other party does not have notice of the dissociation and reasonable believes the dissociated general partner is a general partner.

Question 172

What does administratively dissolved mean?

Answer 172

A limited partnership may be dissolved by the department of the state for failure to party fees, file records, or deliver an annual report.

Question 173

What does judicially dissolved mean?

Answer 173

A limited partnership may be dissolved upon application by a partner if tit is not reasonably practicable to carry on the limited partnership in conformity with the partnership agreement.

Question 174

What does nonjudicial dissolution mean?

Answer 174

Unless judicially or administratively dissolved, a limited partnership is dissolved and its activities must be would up only upon the occurrence of one of five things.

Question 175

What are the five things that may dissolve a limited partnership?

Answer 175

The happening of an event specified in the partnership agreement;
the consent of all general partners and of all limited partners;
After the dissociation of person as a general partner:
there is at lease one remaining general partner the consent of all partners;
there is no remaining general partners, the passage of 90 days after the dissociation unless before the end of the period all remaining partners consent to and admit at least one general partner; or
the passage of 90 days after the dissociation of the last limited partner unless before the end of the period the limited partnership admits at least one limited partner.

Question 176

A limited partnership continues after dissolution only for what purpose?

Answer 176

Only for the purpose of winding up ti activities.

Question 177

What MAY be included in a limited partnership winding up its activities?

Answer 177

It may preserve the limited partnership business or property as a “going concern” for a reasonable time, prosecute and defend actions and proceedings, transfuser property, settle disputes by mediation or arbitration, and perform other necessary acts, and may file a statement of termination.

Question 178

What MUST be included in a limited partnership winding up its activities?

Answer 178

A limited partnership must address liabilities, settle and close partnership activities, and distribute assets.

Question 179

After dissolution, a limited partnership will be bound by any acts of a a general partner that are what?

Answer 179

Appropriate for winding up the limited partnership or for acts where the other party did not have notice of the dissociation.

Question 180

After dissolution, a dissociated general partner, has what kind of power to bind the limited partnership?

Answer 180

A dissociated general partner has the same power to bind the limited partnership as a general partner who has not dissociated for a period of two years after dissociated general partner is a general partner.

Question 181

A general partner or dissociated general partner who causes a limited partnership to incur an obligation by an act that is not appropriate for winding up is liable to whom?

Answer 181

A general partner or dissociated general partner who causes a limited partnership to incur an obligation by an act that is not appropriate for winding up is liable to the limited partnership and to any general partner.

Question 182

How are assets distributed during winding up of a limited partnership?

Answer 182

Assets are distributed first to creditors- including partners who are ordinary creditors of the partnership; any surplus is then paid in cash as a distribution.

Question 183

If assets of a limited partnership are insufficient to satisfy all obligations to creditors, then what?

Answer 183

Then those who were general partners at the time the obligation was incurred MUST contribute to satisfy the obligation.

Question 184

What is a foreign limited partnership?

Answer 184

It is a limited partnership formed under foreign laws.

Question 185

If a foreign limited partnership intends to transact business in Florida, it must what?

Answer 185

It must register with the department of state and failure to do so bars a foreign limited partnership from suing in Florida until it registers, but it may defend itself in Florida courts and its contracts are not impaired.

Question 186

May limited partners be held liable as general partners solely by reason of failure to register?

Answer 186

Limited partners may not be held liable as general partners solely by reason of failure to register.

Question 187

When and how must a limited partnership renew their certificates of authority?

Answer 187

Between January 1 and May 1 of each year, limited partnerships must renew their certificates of authority by filing a report with the department of state and paying the required fee.

Question 188

What is a conversion?

Answer 188

A partnership or limited partnership undergoes a conversion when it changes to another organization.

Question 189

What is required for a general partnership to convert?

Answer 189

For a general partnership to convert, all partners must consent.
A partnership or limited partnership that has been converted is essentially the same entity that existed before conversion and al liabilities continue as obligation of the converted entity.

Question 190

What is required for a limited partnership to convert?

Answer 190

For a limited partnership to convert, al general partners must consent as well as limited partners who own a majority of the rights to receive distributions.

Question 191

What is a merger?

Answer 191

A partnership may be merged with another partnership, a limited partnership, a corporation or any other entity formed pursuant to law.

Question 192

A plan of a merger must be approved by who?

Answer 192

A plan of merger must be approved by all general partners in general partnership and all general partners and those limited partners who own a majority of the rights to receive distributions in a limited partnership.

Question 193

Does conversion and merger destroy personal liability for obligations of an organization that was converted or merged?

Answer 193

Conversion and merger do not destroy personal liability for obligation of an organization that was convert or merged.

Question 194

What is a LLP?

Answer 194

A partnership with the major advantage of appreciating as a limited liability partnership; meaning partners are not personally liable for the limited liability partnerships obligations.

Question 195

What is a LLP formed under?

Answer 195

The R.U.P.A. allows the creation of limited liability partnerships.

Question 196

What must an LLP name end with?

Answer 196

the name of an LLP must end with the words, registered limited liability partnership or limited liability partnership or the abbreviation R.L.L.P RLLP L.L.P or LLP.

Question 197

The terms and conditions on which a partnership becomes a limited liability partnership must be approved by what?

Answer 197

The vote necessary to amend the partnership agreement or ifs specified, the vote necessary to amend the contribution obligations of the partners.

Question 198

What must a partnership do to become a limited liability partnership?

Answer 198

To become a limited liability partnership, a partnership must file a statement of qualification containing: the name of the partnership, address of chief executive office, name and address of agent for service of process, statement that the partnership elects to be a LLP, and a deferred effective date, if any.

Question 199

Is a partner in a LLP personally liable for the obligations of the partnership, whether arising in contract, tort or otherwise?

Answer 199

A partner in a LLP is not personally liable fort eh obligations of the partnership, whether arising in contract, tort, or otherwise.

Question 200

A partner in a LLP remains personally liable for what?

Answer 200

A partner in a LLP remains personally liable for her own wrongful acts.

Question 201

How may a limited partnership become a limited liability limited partnership?

Answer 201

By obtaining the necessary approval, filling a statement of qualification, and complying with the name requirements.

Question 202

The limitation on liability of partners in a limited liability partnership apply to whom?

Answer 202

Limitation applies to both the general and limited partners of a limited liability limited partnership.

Question 203

When and what must a limited liability partnership file with the secretary of state?

Answer 203

A limited liability partnership must file an annual report with the secretary of state between January 1 and May 1.

Question 204

What may the secretary of state do if a partnership fails to file an annual report?

Answer 204

The secretary of state may revoke the partnership’s statement of qualification after giving at least 60 days written notice of intent to revoke.

Question 205

What is a LLC?

Answer 205

A LLC is statutory form of business organization designed to give investors both limited liability as in a corporation and federal income taxation as a partnership.

Question 206

Is a LLC designed to limit state income taxation as a partnership?

Answer 206

No, only federal income taxation as a partnership.

Question 207

Most operational rules governing LLCs parallel the rules governing what?

Answer 207

Corporations.

Question 208

What are the characteristics of a LLC?

Answer 208

Perpetual existence; a member may freely transfer her interest in profits and losses but may not transfer her interest in managing the company without the unanimous consent of the other members; by default management is vested in the members but members may elect managers; members and managers usually are not personally liable for company debts.

Question 209

To form a LLC, one or more organizers must what?

Answer 209

File articles of organization with the state.

Question 210

Articles of organization filed with the state must state what?

Answer 210

The LLC’s name, give the location of its principal office, and name and address of its registered agent.

Question 211

Articles of organization filed with the state may include what?

Answer 211

A statement that the LC is manager-managed, describe the authority or limitations on the authority of certain persons in the LLC, and include provisions on any other relevant matter.

Question 212

The fact that articles are on file, serves as what?

Answer 212

The fact that articles are on file serves as notice of all the facts set forth in the articles and that the entity is an LLC.

Question 213

Generally, any LLC member who has a right to vote on plan of merger or conversion of a LLC, in entitled to what two things?

Answer 213

Generally, any LLC member who has a right to vote on a plan of merger or conversion is entitled to vote against the plan and obtain appraisal rights for payment of fair value for member’s interests.

Question 214

An LLC has most of the statutory powers accorded to what, including the capacity to sue or be sued as an entity, to hold property, and to adopt an operating agreement to govern its internal affairs?

Answer 214

An LLC has most of the statutory powers accorded to corporations.

Question 215

Individual members of an LLC have apparent authority to what?

Answer 215

Apparent authority to bind the company contractually; otherwise only the elected managers normal have such authority. `

Question 216

Profits and losses are shared among the members of an LLC on the basis of what?

Answer 216

On the basis on the agreed value of member’s capital contributions.

Question 217

No distributions may be made by an LLC if what?

Answer 217

If the LLC would be insolvent after the distribution- not able to pay its debts as they become due or its total assets would be less than the sum of its liabilities.

Question 218

When is an LLC dissolved?

Answer 218

An LLC is dissolved upon the occurrence of an event specified in the operating agreement; upon unanimous consent of all members, upon the passage of 90 days when there are no members; when a court orders dissolution; or when the department of state files a statement of administrative dissolution.

Question 219

The procedure for winding up and filing articles of dissolution is similar to that for what?

Answer 219

The procedure for winding up and filing articles of dissolution is similar to that for corporations.

Question 220

Each manager of a manager-managed LLC and member of a member-managed LLC owes what duties to whom?

Answer 220

The duties of care and loyalty to the LLC and the other members.

Question 221

The duty of care in an LLC is limited to what?

Answer 221

The duty of care is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

Question 222

The duty of loyalty in an LLC is limited to what?

Answer 222

The duty of loyalty is limited to accounting to the LLC and holding as trustee for it any property, profit, or benefit derived from the LLC including appropriation of an LLC opportunity; refraining from dealign with the LLC as or on behalf of a party having an adverse interest to the LLC; and refraining from competing with the LLC.

Question 223

In a member-managed LLC all members are entitled to what?

Answer 223

All member are entitled to vote, and each vote is weighed in proportion to the member’s then current percentage or other allocable interest in the profits of the LLC

Question 224

In a manager-managed LLC each manager has what kind of rights in the management and conduct of the LLC’s activities?

Answer 224

Each manager has equal rights in the management and conduct of the LLC’s activities.

Question 225

May a member or manager of an LLC vote by proxy?

Answer 225

A member or manager of an LLC may vote by proxy.

Question 226

An LLC must provide members and their agents and attorneys with what?

Answer 226

An LLC must provide members and three agents and attorneys with access to its records.

Question 227

In a member-managed LLC, a member has a right to what?

Answer 227

A member has a right to inspect and copy any recording concerning the LLC’s activities, financial condition, etc, material to the member’s rights and duties.

Question 228

What must an LLC and its members automatically furnish?

Answer 228

Any information for a purpose reasonably related to the member’s interest as a member, the member makes a demand to the LLC describing with reasonable particularity the information sought and the purpose for seeking the information, and the information sought is directly connected to the member’s purpose.

Question 229

A member of an LLC who has been injured personally by his LLC can do what?

Answer 229

A member of an LLC personally inured by his LLC can bring a direct action against the LLC to recover.

Question 230

When may a member of an LLC bring a derivative action on behalf of the LLC?

Answer 230

A member of an LLC may bring a derivative action behalf of the LLC if she makes a demand on the other members or managers and the members or managers do not bring an action within 90 days.

Question 231

A member of an LLC may bring a derivative action on behalf of the LC if she makes a demand on the other members or managers and the members or managers do not bring an action within 90 days, unless what?

Answer 231

Unless demand would be futile or irreparable injury would result to the LLC bewailing for the members or mangers to take action.

Question 232

When is the demand on other members or managers to bring an action futile?

Answer 232

If a majority of the members or managers were involved in the alleged wrong.

Question 233

A derivative action may be maintained only by a person who is what?

Answer 233

Only by a person who is a member at the time the action is commenced and who was a member at the time the conduct complained of occurred.

Question 234

When does a person have the power to dissociate as a member of an LLC?

Answer 234

At any time, although wrongfully dissociating member may be liable to the Llc for damages.

Question 235

Generally, the events that will cause dissociation of a partner in a ________ or ______ will also cause dissociation of a member of an LLC.

Answer 235

Generally, the events that will cause dissociation of a partner in a general or limited partnership will also cause dissociation of a member of an LLC.