Agency/Partnership Flashcards
Ratification
- Principal has knowledge of material terms of contract
AND 2. P accepts benefits of K
Implied Actual Authority
- necessity
- Custom
- Prior Dealings
Equal Dignities Rule
If SoF requires K to be in writing, Agency AGMT must ALSO be in writing!
Apparent Authority
Agent is
1. cloaked in authority/appearance of
or 2. TP reliance on Agent’s authority
Agent’s Duty of Loyalty
- no self dealing
- no usurping of Principal’s opportunities
- no profit at P’s expense
General Partnership, defn
2 or more person associate to carry on as co-owners of a business for profit;
Test is Objective Intent (NOT subjective intent) no formal agmt needed (key factor - sharing of profits)
- explicit partnership intended
- implied partnership
- partnership by Estoppel (rep to TP that pship exists, so can’t deny)
- Jointly and severally liable for ALL obligations of PSHIP whether K or Tort. But must exhaust Ship resources FIRST.
- Also liable for any torts committed by Partner or EE in ordinary course of Pship business or w/ Pship authority.
*if partner pays Ship obligations, entitled to indemnification for Pship. If unable to indemnify, then he can seek contribution from partners personally
Dissolution Payments
- Pay Inside/outside creditors
- Pay back capital contributions
- share profits/losses
Limited Partnership
composed of one or more general partners, and one or more limited partners. GPs are PERSONALLY liable for Pship obligations, while limited partners are generally not liable beyond their agreed upon contributions.
- To be valid MUST have LP in name AND:
1. File “Certficate” w/ the Sec of State
2. Name designated Agent for Service of process
3. Maintain records of all GP names/addresses - GPs are J/S liable for all pship obligations; fid duties and Mgmt rights
- LPs have NO PERSONAL liab, only their agreed investment. Lim Ps have No fid duty to LP or Ps, and no mgmt control
Profit distributions based on % invested!
LLP
GP where ALL Partners have Limited Liability
*Ps have NO personal Liab for LLP or P Obligations, still liable for own wrongful acts
To be valid MUST have need LLP in name and
- File “Statement of Qualification” w/ SOS
- Name/Address of LLP
- Date effective for LLP
- Statement electing to be LLP
**Pass Through Taxation!
Presumed Partner UNLESS
share profits - presumed partners (can rebut by showing no share in losses, share in gross revenue is NOT the same as profits) UNLESS 1. received in payment of debt 2. wages/compensation 3. Rent 4. Interest on a loan
LLC
Limited liab & benefits of Pass Through Taxation
“Members” are the owners, and all manage (unless diff in Articles)
need LLC in name and: 1. File Articles of ORganization w/ SOS 2. Name of LLC 3. Address of LLC's registered office 4. Name of Registered agent (Further details go in Operating Agmt)
*members not generally personally liable for LLC obligations, only lose investment
Same fid duties of Care and Loyalty by manager
Majority vote for most decisions, but need consent of ALL to become member. Each member is agent
Profit based on % contribution (financial rights transferable, but NOT mgtmt)
Duty of Loyalty Pship
- Account for benefit derived in Pship business, using Pship property, or Appropriation of Pship opportunity (no profit at Pship expense)
- Refrain from dealing w/ Pship in conduct of its biz as, or on behalf of, party having adverse interest; Self dealing
- Refrain from competing w/ Pship in conduct of it biz; no usurping of Pship Opportunity
Duty of Care Pship
- Refrain from engaging in gross negligence or reckless conduct, intentional misconduct, or knowing violation of law
Duty of Disclosure Pship
Statutory duty (can K around)
- shall furnish to each P, w/o demand info re Pship biz/affairs reasonably required for exercise of P rights and duties
- on demand, shall furnish any other info re: business/affairs UNLESS unreasonable/improper
Pship P liability in dissolution
- Bound by acts appropriate for winding up
and 2. bound by post dissolution acts where TP did not have notice of dissolution
