agency and partnership Flashcards
6 key principles of partnership
- low standard of formation
- P’s are agents and comanagers
- Ps are jointly and severally liable
- all Ps have 3 fid duties
- dissolution doesn’t end a P
- creditor can claim an interest in the partnership
A partnership is
an association between tow or more people to carry on a business as co-owners a business for profit
A majority vote of Ps is needed if
theres disagreement. if its an extraordinary affair, unanimous vote is needed
extent of P liability for debts
all Ps are jointly and severally liable. if they are subject to excess liability for a debt, they can recover from other Ps.
Outgoing Ps are personally liable to creditors for debts incurred during their time at a partnership
3 fid duties of a partner
loyalty, care, account + good faith and honesty
process of winding up a partnership
dissolution - change of relations - prior creditors get notice
winding up - liquidation of assets, Ps still have liability
termination - end of P
If a creditor has a claim against: a partner, the partnership
a partner: creditors can obtain an interest in partnership - right to recieved profits
the partnership: creditor can collect from indy ps as j&s liable. Extends to apparent authority acts by Ps.
To attack personal assets, a crediotr must
attempt to collect from the partnership, then obtain a judgement against it
To determine if there’s agency…
Check consent and control. Consent by both P & A, ability for P&A to consent
When is P bound by an act of agent
If agent had authority to enter the K. authority via express, implied (custom, course of conduct, necessity). termination of implied ends after reasonable time, change in circumstance, death or incapacity.
Apparent authority: a person dealing with an agent must have a reasonable belief in the authority of the agent stemming from an act or neglect by the principal
ratification: if agent doesn’t have authority, P can ratify the acts via impliedly affirming or accepting the benefit w/ knowldege of material facts
When A is bound to a 3P b.c of acts
If A lacked actual or apparent authority
Or if P is undisclosed or partially disclosed
P is bound to P for breach if acting beyond authority
When P is liable for torts of A
vicarious liability if:
acting within scope of employment, OR made a minor deviation, or for an intentional tort if: for the benefit of P, P authorized it, and it was natural w.in scope (A is liable too under joint and serveral liability)
Direct liability: if negligent hiring or supervision
sharing of profits…
creates a presumption of a partnership, can be rebutted via lack of loss sharing or lack of management sharing
Filing of a certificate of limited partnership under ULPA
Key- signed by all GPS - failed LP creates a GP =
registering to become an LLP
must comply with statutory requirements - filing with sec of state, registration, payment of fee
