BE (PARTNERSHIPS) Flashcards
General Partnership Formal Requirments
no formal requirement; oral or written
IF General Partnership is filed must include…
- Filed w/ secretary of state
- Name of the partnership
- each partners name and address
Name requirments
no name requirements
Partners Participation
share equally in profits, loss, and distribution UNLESS otherwise agreed
Contribution Requirment
Each partner must make a contribution and it must be of economic value
Decisions requiring UNANIMOUS vote
- AMEND the partnership agreement
- ADMIT new partners
- TERMINATE the partnership
Decisions requiring MAJORITY vote
decisions affecting the management of the partnership (policy decisions) unless otherwise agreed
Partnership owing immovable property requirment
partnership agreement MUST be in writing at time the property is acquired; IF NOT it is in owned indivision
Immovables vs. third parties
no rights as to third parties UNLESS filed with the secretary of state
Partner’s Obligations
a fiduciary duty to the partnership and partners
may NOT appropriate any partnership asset for personal profit or act contrary to the best interest of the partnership
Breach of obligation?
Partnership may recover damages from the harm or profits accrued by breach
Limits on shared interest with third party
- Does NOT become a member
- Partner sharing interest is liable for the damages caused by third party to partnership
Rights of Partner
inform self of business and consult records; CANT agree out of this
Partner as Creditor
OK
- acts in good faith
- may act as creditor for sums dispersed, obligations incurred, and losses sustained
Partner as Mandatary
Each partner is a mandatary for all matter of ordinary business EXCEPT alienation, lease, or encumbrance of partnership’s immovables
Exceeding Mandatary Authority
Partnership may recover damages from partner who exceeded authority
Partners secondary liability
secondarily liable for virile share of the debts
MAY plead “discussion” to require creditor to seize partnership assets first
Liability Joint/Solidary
Liability is joint unless contracted otherwise with creditor
Debt Incurred Prior to Joining
LA Civil Code is unclear, BUT all other states state new partner is NOT liable for past debts
Indemnification Availability?
Partner sued in capacity as partner is NOT entitled to indemnification
HOWEVER might be required under mandate law if cost defending suit is characterized as no fault acting as mandatary
Expulsion
- For just Cause
- Majority vote unless otherwise agreed
Seizure of membership
causes cessation of membership IF effected under a writ of execution and id NOT released within 30 days.
Retroactive to date of seizure
Cessation of Membership
death, interdiction, bankruptcy, seizure of interest, expulsion, withdrawal, or in accordance with partnership agreement
Withdrawal (Term Constituted)
-only with UNANIMOUS consent of the other partners
- W/O consent ONLY if another party has failed to perform a material obligation
Withdrawal (No constituted Term)
any time with notice given in good faith at a time that is not unfavorable to the partnership
“Wrongful” Withdrawal
- Not Effective
- remains liable
Effects of Cessation of Membership
former partner, successor, or seizing creditor is entitled to be paid the value of his interest in the partnership
- in money unless, otherwise agreed or partnership no longer exists
Termination of Partnership
Unanimous Consent, judgment of termination, bankruptcy of partnership, reduction to one member, expiration of term, impossibility of attaining the object, in accordance with provisions of the agreement
Continuing Partnership
- expressly or tacitly
- New object OKAY
After Termination EFFECTS
Mandatary authority ceases EXCEPT acts necessary for liquidation
- partner w/o knowledge may still bind partnership
- Third parties in good faith
Order of Liquidation
- Secured Creditors (partner and non partner)
- Unsecured creditors (non-partners)
- Unsecured creditors (partners)
- Capital contributions of partners
- surplus divided amongst
Partnership in Commendam
one or more limited partners and one or more general partners
Commendam Partner Req.
must AGREE to make a contribution
Commendam Partner Liability
partnership debts UP TO the extent of the contribution; NOT personally liable for partnership debts
Commendam Partnership Form Requirments
- In writing and filed with Secretary of State
- Reflect is is a limited or commendam partnership
- NOT suggest any commendam partner is a general partner
- MUST describe contribution of each commendam partner and its value
- Time or circumstance contribution is to be me made IF NONE contribution is on demand
When Commendam partners ARE liable as general partners
- Permits name to be used in business dealings
- participates in management or administration of the partnership
- conducts business with third parties on behalf of the partnership
Liability only to persons who reasonably believe commendam partner is general partner
Actions ALLOWED by Commendam Partner
- Consulting/Advising on business matters
- Serving as officer or director of a corporate GENERAL PARTNER
- acting as surety
- approving or disapproving amendments
- Voting on important matters (alienation…, changing nature of business, admitting partner, expelling)
Limited Liability Partnership
Insulates partners from personal liability for “debts and obligations arising from actions (wrong) of other partners”
Limited Liability Partnership Personal Liability
does NOT protect from:
- Virile share of other partnership debts and obligations; OR
- Partnership debts resulting for their own actions of any type
LLP Name Requirements
MUST contain “registered limited liability partnership” OR L.L.P. at end
LLP Formation
MUST be formed by converting a previously existing LA partnership
LLP Application Reuirments
- Filed with Secretary of State AND include:
- name of the partnership
- address of its principal office
- number of partners
- brief statement of the business engaged in
AND signed by majority in INTEREST (not necessarily majority of the partners)
