2. Florida Partnership and LLC Rules Flashcards
1
Q
What is the definition of a Florida partnership?
A
A partnership is an association of two or more persons to carry on as co-owners a business for profit.
2
Q
Partnership law is based on the law of what?
A
Contract and agency.
3
Q
A partnership is a legal entity distinct from its partners, except ________
A
Except with respect to partners’ personal liability for partnership obligations.
4
Q
What may be held in the partnership name?
A
Title to land.
5
Q
Under RUPA, partnerships may _______ or be _______ in the partnership name
A
Under RUPA, partnerships may sue or be sued in the partnership name.
6
Q
What does RUPA generally provide?
A
RUPA generally provides a default set of rules for partnerships.
7
Q
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?
A
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.
8
Q
Certain RUPA provisions cannot be waived, like __________
A
The duty of loyalty and the right of a court to expel a partner.
9
Q
A partnership is formed as soon as _____?
A
A partnership is formed as soon as two or more persons associate to carry on as co-owners a business for profit.
10
Q
Is a formal agreement required for formation of a partnership?
A
No formal agreement is required for formation of a partnership.
11
Q
Parties’ intent may be implied from what?
A
Parties intent may be implied from their conduct.
12
Q
Is a writing required for formation of a partnership?
A
No writing is required for formation of a partnership.
13
Q
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 _______.
A
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.
14
Q
Who may be a partner in a partnership?
A
Anyone capable of entering into a binding contract may be a partner in a partnership.
15
Q
A would-be partner who lacks capacity is liable only to _____________.
A
A would-be partner who lacks capacity is liable only to the extent of his or her capital contribution.
16
Q
The partnership with a would-be partner who lacks capacity is not _____ and will continue on until ________.
A
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.
17
Q
What type of partnership is void?
A
A partnership formed to achieve an illegal purpose is void.
18
Q
Courts will not compel an _______ or _______ of a void partnership’s affairs.
A
Courts will not compel an accounting or a settlement of a void partnership’s affairs.
19
Q
Unless otherwise agreed, no one can become a partner in a partnership without what?
A
Unless otherwise agreed, no one can become a partner in a partnership without the express or implied consent of all partners.
20
Q
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 _______.
A
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.
21
Q
Since no true formalities are required to form a partnership, it may be necessary to determine whether __________.
A
It may be necessary to determine whether the relationship between parties is a partnership or something else.
22
Q
To determine whether the relationship between parties is a partnership or something else, the court generally will look to what?
A
Generally to determine whether the relationship between parties is a partnership or something else, the court will look to the intent of the parties.
23
Q
If the parties intended to carry on a business as co-owners for profit, a partnership exists even if what?
A
A partnership exists even if the parties did not subjectively intend to be partners.
24
Q
Where parties’ intent is uncertain, courts consider what two rules, what is the first?
A
- 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.
25
Where parties' intent is uncertain, courts consider what two rules, what is the second?
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.
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?
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.
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?
When the non-partner merely fails to deny a representation of partnership. She must actually consent to the representation.
28
When a partner holds another out as a partner, he thereby makes that person his what?
His agent to bind him to third parties. However, only those partners who know of or consent to this will actually be bound.
29
What is partnership capital?
Partnership capital is the property or money contributed by each partner for the purpose of carrying on the partnership's' business.
30
What is partnership property?
Partnership property is everything the partnership owns- including both capital and property subsequently acquired in partnership transactions.
31
Is there a restriction on what may be partnership property?
There is no restriction on what may be partnership property.
32
Sometimes it may be difficult to determine whether property is _______ or _________.
It may be difficult to determine whether property is partnership property or the individual property of a partner.
33
RUPA has provisions for determination concerning the ownership of what kind of property?
RUPA has provisions for determination concerning the ownership of titled property.
34
RUPA provisions concerning titled property includes both ________?
RUPA titled property includes both titled personal property and titled real property.
35
Common law has criteria for analyzing property that is what?
Common law has criteria for analyzing property that is untitled.
36
The three provisions of the RUPA that determine titled property are what?
Property that is
1. deemed to be Partnership Property
2. presumed to be Partnership Property
3. presumed to be partner's Separate Property.
37
Under RUPA, property deemed to be partnership property is what?
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.
38
Under RUPA, property presumed to be partnership property is what?
Under RUPA, property presumed to be partnership property is property purchased with partnership funds, meaning partnership cash and partnership credit.
39
Under RUPA, property presumed to be a partner's separate property is what?
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.
40
Property can still be considered to be partner's separate property, under RUPA, even if what?
Property can still be considered to be partner's separate property, under RUPA, even if the property is used for partnership purposed.
41
Common law criteria for determining untitled property includes what?
Common law criteria for determining untitled property includes factors that tend to indicate that the property was intended to be partnership property.
42
Common law factors that tend to indicate that the property was intended to be partnership property include what?
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.
43
Does a partner have transferable interest in specific property of the partnership?
A partner is not a co-owner of partnership property and thus has no transferable interest in any specific property of the partnership.
44
Does a partner have a right to use partnership property?
A partner has no right to use partnership property other than for the benefit of the partnership.
45
Does each partner have a transferable interest in the partnership? If so, what does it consist of?
Each partner has a transferable interest in the partnership, which consists of her share of partnership profits, losses, and distributions.
46
What is a partner's share of profits or losses?
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.
47
A partner's interest in the partnership is what three things?
A partner's interest in the partnership is treated as personal property, transferable without dissolving the partnership, and is attachable.
48
What does the transfer of partnership interest give the transferee?
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.
49
What is the restriction on partner status selling?
Partners cannot sell partner status without unanimous consent of the other partners.
50
What portion of rights in the management of the partnership business does each partner have?
Absent an agreement to the contrary, all partners have equal rights in the ;management of the partnership business.
51
Decisions involving matters within the ordinary course of business can be controlled by _____, while matters outside the ordinary course of business require _______.
Ordinary course of business matters can be controlled by a majority vote, while matters outside the ordinary course of business require unanimous consent.
52
What fiduciary duties does each partner owe to the partnership?
The duty of loyalty and the duty of care.
53
What is the duty of loyalty?
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.
54
What is the duty of care?
The duty of care requires the partner to refrain from engaging in neglect, reckless, or unlawful conduct, or intentional misconduct.
55
What is the amount in each partners' account?
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.
56
Is there a right to remuneration for services rendered to the partnership?
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.
57
What is the consequence of a partner impliedly or expressly proving to devote time to the partnership business and failing to do so?
She may be charged in an accounting for damages caused to the partnership.
58
Indemnification is proper with regard to what?
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.
59
What action can a partner take if has been required to pay or satisfy more than her share of the partnership debt?
She may require the other partners to contribute their pro rata shares.
60
Where must books and information by kept by a Florida partnership?
Books and information must be kept at the chief executive office.
61
Does each partner have a right to inspect or copy the partnership books?
Each partner has the right to inspect and copy the partnership books.
62
Upon demand, a partner must render what?
Each partner must render true and full information of all things affecting the partnership upon demand.
63
A partnership may sue or be sued in its own name, however a judgment against a partnership _______.
A judgment against a partnership alone is not a judgment against the individual partners.
64
A partner may bring an action against a partner for breach of what?
Either breach of the partnership agreement or breach of a fiduciary duty.
65
A partner may bring an action against the partnership or other partners to enforce what?
To enforce any right created by the partnership agreement or the Revised Uniform Partnership Act or that otherwise belongs to the partner.
66
Every partner is an agent of the partnership for what?
Every partner is an agent of the partnership for the purpose of its business.
67
What kind of act will bind a partnership and thereby other partners?
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.
68
What three categories of liability may a partnership suffer?
The three categories of liability for a Florida partnership are in contract, tort, or for breach of trust.
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
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.
70
As agents of the partnership, partners have apparent authority to bing the partnership to
Any contract within the scope of the partnership business.
71
If a contract is outside the scope of partnership business, the partnership will generally
not be bound unless the partner had actual authority.
72
Apparent authority is not limited to transactions that are in fact within the ordinary course of partnership business but extends to
Extends to transactions that apparently would be for carrying on business of the kind run by the partnership.
73
The partnership will not be bound by the act of a partner if
the partner lacked actual authority and the person with whom the partner dealt either knew or received notification of such fact.
74
Knowledge is defined under RUPA as
subjective knowledge, what the person actually knew; what someone should have known is irrelevant.
75
Notification is defined under RUPA as effective when what?
notice comes to the person's attention or when it is duly delivered.
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?
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.
77
Who may transfer property held in the name of the partnership?
Any partner may transfer property held in the name of the partnership.
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?
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.
79
If the transferring partners lacked authority, the partnership may recover the property from the initial transferee but not from who?
A bona fide purchaser for value.
80
IF the partnership's interest is not indicated in the instrument transferring the property, the transfer may be made by those whose?
Whose names the property is held.
81
If the transferee givers value without notice of lack of authority, she takes the partnership how?
Free of partnership interest as a BFP.
82
A partnership is bound by the act of a partner if the partner has what?
Actual authority.
83
Actual authority is what?
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.
84
What vote is required for authorization of ordinary business? What vote is required for the authority of extraordinary acts?
Majority vote.
| Unanimous vote.
85
What is a statement of authority?
A statement of authority grants or limits a partner's authority to enter into transactions on behalf of the partnership.
86
The statement of authority must be filed where in general and where for real property transfers?
The department of State.
| The count recorder
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 _________.
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.
88
Under RUPA a partner has notice of a fact when what?
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.
89
Notification to a partner is effective if and when?
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.
90
A partner's notice of a fact is imputed to the partnership immediately unless what?
The partner having notice is participating in a fraud against the partnership.
91
Where one partner, acting within the scope of partnership business, defrauds a third party,t the partnership will be what?
Liable.
92
If the fraudulent action involves a transaction outside the scope of partnership business, the partnership will what?
Not be held liable.
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?
Not liable to the third party.
94
The partnership is liable if a partner misapplies the money or property of a third party, received by him ______.
within the scope of his apparent authority or received in the ordinary course of business and misapplied while in the custody of the partnership.
95
Partners are liable for all contracts entered into by a partner in the scope of what?
The scope of partnership business or with authority of the partnership.
96
Partners are liable for all torts committed by who?
Any partner or employee of the partnership within the ordinary course of partnership business or or with authority from the partnership.
97
Liability is _____ and _____ for al obligations of the partnership, whether raising in ____, ____, or _______.
Liability is joint and several for all obligations of the partnership.
Whether arising in contract, tort, or for breach of trust.
98
However, judgment in not personally binding on a partner unless what?
She has been served and the creditor has exhausted all partnership assets.
99
Each partner is personally and individual liable for the entire amount of partnership obligations with rights of what?
Right of contribution and indemnification.
100
aN incoming partner is not personally liable for what obligations?
Obligations incurred by the partnership before the person became a partner exit to the extent of her capital contribution.
101
An outgoing ot dissociated partner remains liable for obligations arising while she was a partner in the partnership unless what?
Unless there has been payment, release, or novation.
102
Liability generally continues until how long after she has filed a notice of dissociation with the Department of State?
90 days after she has filed a notice of dissociation with the Department of State.
103
Partners will not be criminally liable for what?
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.
104
Dissociation is what?
The change in the relationship caused by a parter's ceasing to be associated in the carrying on of the business.
105
Dissociation does not what?
Does not necessarily result in the winding ;up of a partnership business.
106
Dissociation is caused by what?
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.
107
A partner who dissociates in breach of the partnership agreement or prior to an greeted upon time or event is what?
Liable for damages caused by the wrongful dissociation.
108
Upon a partner's dissociation, hr right to what ceases?
Her right to participate in management ceases.
109
The partner's fiduciary duties generally terminate except with respect to what?
Matters arising before dissociation.
110
The partnership must purchase (buy out) the partner's interest at either _____ or _____.
Also the partnership must indemnify her against what?
Liquidation or going-concern value.
| Any known pre dissociation liabilities not incurred by the dislocating partner's acts.
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?
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.
112
Interest must be paid on the buy-out price from when?
The date of dissociation to the date of payment.
113
A partnership can be bound by an act of a dissociated partner undertaken within how long?
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.
114
A dissociated partner can be liable for obligations incurred by the partnership for how long after the partner dissociates?
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.
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?
deems all persons to have notice of a dissociation 90 days after such noticed is filed
116
A partnership is dissolved and its business must wound up when what 5 possible things occur?
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.
117
A partnership will be bound by a partner's post dissolution acts if either what?
If either the acts are appropriate for winding up the business or the third party did not have notice of the dissolution.
118
Third party will be deemed to know of a a dissolution how long after a statement of dissolution, if any is filed?
90 days after a statement of dissolution is filed with the Department of State.
119
If all partners agree to a dissolution or the partnership term expires that al partners have the right to what?
Wind up the partnership business.
120
If the partnership is dissolved by a partner's death or bankruptcy, the surviving or remaining partners have the right to what?
Wind up the partnership business.
121
A partner who wrongfully dissolves is not entitled to what?
Wind up the affairs of the partnership business.
122
Any time beforip liabilities are paid in the order:e the winding up is complete, the partners may what?
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.
123
Such a waiver does not affect the rights of persons who ______.
Have relied on the dissolution before receiving notice of the waiver.
124
A solvent partnership's assets are reduced to cash and partnership liabilities are paid in the what order?
Creditors, including partners who are creditors;
| partners' accounts.
125
Where a partner is priced to pay more than his share of the partnership's debts, he is entitled to what?
Contribution from the other partners to equalize the shares.
126
Partnership creditor have priority over individual partners' creditors with regard to what?
Partnership assets
| and parity with separate creditors as to separate property.
127
What is a limited partnership LP comprised of?
one of more general partners and one or more limited partners.
128
LPs are created under what?
Specific statutory authority.
129
The liability of a limited partner of a LP for partnership debts is generally limited to what?
The capital that she contributes to the partnership.
130
What Act governs all Florida partnerships?
The Florida Revised Limited Partnership Act of 2005.
131
A certificate of Limited Partnership must be filed where?
With the Department of State.
132
What must the certificate of Limited Partnership include?
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.
133
What must a limited partnership maintain in Florida?
An office with records of the certificate, partnership agreement, the partnership's tax returns for the three most current years.
134
The registered office of a limited partnership may be changed how?
By filing a statement of the change with the department of state.
135
A limited partnership must maintain in the state what?
An agent for the service of process.
136
The agent for a limited partnership may be changed by what?
By filing a statement with the department of state.
137
An agent of a limited partnership may resign by what?
filing a statement with the department of the sate and mailing a statement to the principal office of the partnership.
138
Every limited partnership agreement must have a writing that sets out what?
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.
139
A limited partnership is a creature of what?
Statute
140
Because a limited partner is a creature of statute, what is true?
A limited partnership can exist only on compliance with the limited partnership statute.
141
If one partner tells another that she may have limited liability, but there is no filing with the department of state then
There is no statutory compliance and a limited partnership is not created and all partners are subject to full liability
142
The limited partnership name may contain what?
The name of any partner.
143
The limited partnership must contain what?
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.
144
May a person be both a general partner and a limited partner in a limited partnership?
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.
145
How may a person become a general partner in a limited partnership?
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.
146
How may a person become a limited partner?
As provided in the partnership agreement or as the result of a conversion or merger, or with the consent of all the partners.
147
What forms may contribution of a partner take?
Cash, property, services rendered, or a promise to contribute such in the future.
148
Is a limited partner's promise to contribute enforceable?
No, unless it is in writing and sign by the limited partner.
149
A partner's obligation to make a contribution may be compromised only by what?
The consent of all the partners. However, a previous creditor may enforce the original obligation
150
If a partner properly receives the return of her contribution, she remains liable to the partnership for
The return for one year, but only to the extent necessary to discharge partnership debts.
151
If the return of a partner's contribution was improper, she remains liable fore
The entire amount of the return for six years.
152
A general partner is ______ and ______ liable for what?
A general partner is jointly and severally liable for all obligations of the limited partnership.
153
A person who becomes a general partner of an existing limited partnership is ______.
Not personally liable for preexisting obligations.
154
A limited partner is liable for what?
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.
155
What right do both general and limited partners have in a limited partnership?
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.
156
A general partner of a limited partnership also has what rights of a partner in a regular partnership?
All the rights of a partner in a regular partnership, including the right to manage the partnership and the right to receive information.
157
A limited partner has the right to what?
Participate in mangement and control of the limited partnership without becoming personally liable for the limited partnership's obligations and to receive information.
158
A general partner of a limited partnership owes what duties?
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.
159
A limited partner has what duty to the limited partnership?
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.
160
May a person who erroneously believes that she is a limited partner avoid general partner liability? What will she be liable for?
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.
161
In addition to the events causing the dissociation of a partner in a general partnership, a limited partner is dissociated upon what?
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.
162
Upon a person's dissociation as a limited partner she has what rights?
She has no further rights as a limited partner and any interest she owned in the partnership she then owns as a mere transferee.
163
In addition to the events causing dissociation of a partner in a general partnership, a general partner is dissociated upon what?
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.
164
A person's dissociation as a general partner is wrongful only when what?
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.
165
A person who wrongfully dissociates as a general partner is liable to the limited partnership and to the other partners for what?
Liable for damages caused by the dissociation.
166
The effects of dissociation as a general partner are similar to those of a partner in what?
In a general partnership.
167
A limited partnership can be bound by acts of a dissociated general partner only if what?
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.
168
If the limited partnership is bound by the acts of a dissociated general partner, the dissociated general partner is liable to whom?
The partnership and any general partner or other person damaged.
169
Does a general partner's dissociation discharge his liability as a general partner for obligations of the limited partnership incurred before dissociation?
No, a general partner's dissociation does not discharge his liability as a general partner for obligations of the limited partnership incurred before dissociation.
170
What is a dissociated general partner not generally liable for _____?
A dissociated general partner is not generally liable for limited partnership obligation incurred after his dissociation with two exceptions.
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?
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.
172
What does administratively dissolved mean?
A limited partnership may be dissolved by the department of the state for failure to party fees, file records, or deliver an annual report.
173
What does judicially dissolved mean?
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.
174
What does nonjudicial dissolution mean?
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.
175
What are the five things that may dissolve a limited partnership?
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.
176
A limited partnership continues after dissolution only for what purpose?
Only for the purpose of winding up ti activities.
177
What MAY be included in a limited partnership winding up its activities?
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.
178
What MUST be included in a limited partnership winding up its activities?
A limited partnership must address liabilities, settle and close partnership activities, and distribute assets.
179
After dissolution, a limited partnership will be bound by any acts of a a general partner that are what?
Appropriate for winding up the limited partnership or for acts where the other party did not have notice of the dissociation.
180
After dissolution, a dissociated general partner, has what kind of power to bind the limited partnership?
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.
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?
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.
182
How are assets distributed during winding up of a limited partnership?
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.
183
If assets of a limited partnership are insufficient to satisfy all obligations to creditors, then what?
Then those who were general partners at the time the obligation was incurred MUST contribute to satisfy the obligation.
184
What is a foreign limited partnership?
It is a limited partnership formed under foreign laws.
185
If a foreign limited partnership intends to transact business in Florida, it must what?
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.
186
May limited partners be held liable as general partners solely by reason of failure to register?
Limited partners may not be held liable as general partners solely by reason of failure to register.
187
When and how must a limited partnership renew their certificates of authority?
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.
188
What is a conversion?
A partnership or limited partnership undergoes a conversion when it changes to another organization.
189
What is required for a general partnership to convert?
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.
190
What is required for a limited partnership to convert?
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.
191
What is a merger?
A partnership may be merged with another partnership, a limited partnership, a corporation or any other entity formed pursuant to law.
192
A plan of a merger must be approved by who?
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.
193
Does conversion and merger destroy personal liability for obligations of an organization that was converted or merged?
Conversion and merger do not destroy personal liability for obligation of an organization that was convert or merged.
194
What is a LLP?
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.
195
What is a LLP formed under?
The R.U.P.A. allows the creation of limited liability partnerships.
196
What must an LLP name end with?
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.
197
The terms and conditions on which a partnership becomes a limited liability partnership must be approved by what?
The vote necessary to amend the partnership agreement or ifs specified, the vote necessary to amend the contribution obligations of the partners.
198
What must a partnership do to become a limited liability partnership?
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.
199
Is a partner in a LLP personally liable for the obligations of the partnership, whether arising in contract, tort or otherwise?
A partner in a LLP is not personally liable fort eh obligations of the partnership, whether arising in contract, tort, or otherwise.
200
A partner in a LLP remains personally liable for what?
A partner in a LLP remains personally liable for her own wrongful acts.
201
How may a limited partnership become a limited liability limited partnership?
By obtaining the necessary approval, filling a statement of qualification, and complying with the name requirements.
202
The limitation on liability of partners in a limited liability partnership apply to whom?
Limitation applies to both the general and limited partners of a limited liability limited partnership.
203
When and what must a limited liability partnership file with the secretary of state?
A limited liability partnership must file an annual report with the secretary of state between January 1 and May 1.
204
What may the secretary of state do if a partnership fails to file an annual report?
The secretary of state may revoke the partnership's statement of qualification after giving at least 60 days written notice of intent to revoke.
205
What is a LLC?
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.
206
Is a LLC designed to limit state income taxation as a partnership?
No, only federal income taxation as a partnership.
207
Most operational rules governing LLCs parallel the rules governing what?
Corporations.
208
What are the characteristics of a LLC?
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.
209
To form a LLC, one or more organizers must what?
File articles of organization with the state.
210
Articles of organization filed with the state must state what?
The LLC's name, give the location of its principal office, and name and address of its registered agent.
211
Articles of organization filed with the state may include what?
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.
212
The fact that articles are on file, serves as what?
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.
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?
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.
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?
An LLC has most of the statutory powers accorded to corporations.
215
Individual members of an LLC have apparent authority to what?
Apparent authority to bind the company contractually; otherwise only the elected managers normal have such authority. `
216
Profits and losses are shared among the members of an LLC on the basis of what?
On the basis on the agreed value of member's capital contributions.
217
No distributions may be made by an LLC if what?
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.
218
When is an LLC dissolved?
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.
219
The procedure for winding up and filing articles of dissolution is similar to that for what?
The procedure for winding up and filing articles of dissolution is similar to that for corporations.
220
Each manager of a manager-managed LLC and member of a member-managed LLC owes what duties to whom?
The duties of care and loyalty to the LLC and the other members.
221
The duty of care in an LLC is limited to what?
The duty of care is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
222
The duty of loyalty in an LLC is limited to what?
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.
223
In a member-managed LLC all members are entitled to what?
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
224
In a manager-managed LLC each manager has what kind of rights in the management and conduct of the LLC's activities?
Each manager has equal rights in the management and conduct of the LLC's activities.
225
May a member or manager of an LLC vote by proxy?
A member or manager of an LLC may vote by proxy.
226
An LLC must provide members and their agents and attorneys with what?
An LLC must provide members and three agents and attorneys with access to its records.
227
In a member-managed LLC, a member has a right to what?
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.
228
What must an LLC and its members automatically furnish?
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.
229
A member of an LLC who has been injured personally by his LLC can do what?
A member of an LLC personally inured by his LLC can bring a direct action against the LLC to recover.
230
When may a member of an LLC bring a derivative action on behalf of the LLC?
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.
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?
Unless demand would be futile or irreparable injury would result to the LLC bewailing for the members or mangers to take action.
232
When is the demand on other members or managers to bring an action futile?
If a majority of the members or managers were involved in the alleged wrong.
233
A derivative action may be maintained only by a person who is what?
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.
234
When does a person have the power to dissociate as a member of an LLC?
At any time, although wrongfully dissociating member may be liable to the Llc for damages.
235
Generally, the events that will cause dissociation of a partner in a ________ or ______ will also cause dissociation of a member of an LLC.
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.
