Business Entities Flashcards
In a general partnership. If debts of the firm become due and the firm cannot pay them,
Partners of general partnerships are jointly and severally liable for the debts and obligations of the partnership incurred within the scope of partnership business.
LLC’s are taxed as a _________________ unless otherwise elected to be treated as an S-Corp.
Partnership
Who has apparent authority in a partnership?
Every partner is an agent of the partnership and has apparent authority to bind the partnership to contracts that appear to carry on in the usual way the business of the partnership.
Joint ventures are treated as a …
partnership in most important legal aspects.
A joint venture need not be dissolved upon the completion of a single undertaking.
Joint ventures may be formed for a single transaction or for a related series of transactions.
On dissolution of a general partnership the “order of distribution” would be as follows:
- General partner loans.
- Partners’ capital accounts.
- General partners’ profits
When a judgment is obtained against both a partnership and an individual general partner, the plaintiff must proceed against
the partnership assets first and then the assets of any individual general partner. The partnership assets must be exhausted before any general partner’s individual assets can be attached.
In an LLC, Absent an agreement to the contrary, the members’ voting strength is
proportionate to their contributions.
In an LLC, an Operating AGreement is
Optional, doesn’t have to filed with the state.
In an LLC, Absent an agreement to the contrary, if a member of an LLC dies, the LLC is
dissolved unless the other members consent to continue.
In a General Partnership, When the partnership agreement is silent as to how profits are to be divided, they are divided equally. Note also that when the agreement is silent, losses are treated similar to profits, there is no reverse rule that profits are treated like losses.
they are divided equally. Note also that when the agreement is silent, losses are treated similar to profits, there is no reverse rule that profits are treated like losses.
In an LLC, profits will be divided among the members
in proportion to their contributions, absent an agreement to the contrary.
Limited partners must give_________ notice of withdrawal in absence of an agreement to the contrary.
6 months
In regards to the liabilities of a general partnership
All partners are subject to joint and several liabilities on partnership debts and contracts under the Revised Act
Partners are agents of the other partners of a partnership, and thus act as
both an agent and principal (for the actions of other partners) in authorized partnership transactions
A joint venture is an association of persons engaged as co-owners in a single (special transaction) undertaking for profit. A joint venture is treated as ___________ for most important legal respects.
a partnership
Concerning liability when a partner in a general partnership commits a tort while engaged in partnership business
Each partner is jointly and severally liable
A limited partnership must have what mix of partners?
At least one general partner and one limited partner
A limited partner will be considered a general partner with full personal liability
only to those that the limited partner transacts with as if he were a general partner.
The death of a general partner will, by operation of law,
dissolve the limited partnership.
Fundamental Corporate Changes (DAMS)
Dissolution
Amendments to the Aritcles of Incorporation
Mergers, Consolidations, and compulsory share exchanges
Sale of substantially all of the Corp’s assets outside the
regular course of business.
Need the following: Board & Shareholder Aprroval-Not Unanimous.
- Majority Board Resolution
- Notice to all shareholers
- Majority of the shareholders approval
- Filing of the articles with the state
A partner’s death is an event of
dissociation. Where a partner dies, the partner’s executor does not take the partner’s place.
Rule: The partner’s estate remains liable for the partner’s obligations to the partnership and has a right to the deceased partner’s share of distributions
