Business structures- sec 15

Question 1

Partnership

Answer 1

And association between two or more persons to operate a business ask her owners for profit

Informally created Since the partners have a limited liability. Partners are agents. Limited duration. Transfer of ownership requires agreement. Under a revised uniform partnership act partnerships are separate legal entity is: May sue and be sued, my own property in partnership name.

Unlimited liability of partners for partnership that, ease of formation, can be very informal, not a taxable entity is a flow-through entity – 1065

Question 2

Three basic rights

Answer 2

Profits – interest, property, participation – management right – vote/make contracts/Debts

Question 3

Profits

Answer 3

Each partner has a right to proportionate share one – profits generated by the business. Two- return of the net assets in the partnership in the event that the partnership terminates

Known as partnership interest

The right is personal and transferable/assignable without the need for approval by other partners, a partner can transfer their interest to a personal credit or, are the courts can permit a personal credit her to see if that interest to satisfy unpaid that

Question 4

Property

Answer 4

Our property acquired by a partnership becomes partnership property and belongs to the partnership as an entity not to them difficult partners. Each partner can use the property for partnership purposes. Under RUPA partnership property doesn’t include property purchased and the partnership name also includes property purchased by a partner using partnership funds. Not transferable or assignable so a creditor can’t obtain rights to specific partnership property

Question 5

Participation

Answer 5

Each partner has a right to participate in the management of the business, including a right to inspect the books and records of the business at any time, make contracts, and bow on partnership actions. Right is not transferable or assignable

Question 6

Formation

Answer 6

Written agreement is required when the statute of frauds applies, a partnership with a specific term exceeding a year. Evidence signed by defendant to enforce GROSS

Oral formation is Acceptable otherwise

Implied if two or more persons are sharing profits from a venture unless they can prove otherwise.

Informal because no government approval is needed

Question 7

Types of authority

Answer 7

Actual – partnership intends to give the partner power to contract.
Express – partnership states partner has authority.
Implied – partnership a sinus task that would require a sortie to carry out

Apparent – partnership crates impression that partner has authority. Good faith third-party reasonably assumes you have

An authorized action – not liable unless ratified. Ratification – partnership gives partner authority after contact is made. Principal must be disclosed, must know details of contract made by partner on behalf of partnership, must ratify before third-party with drawls

Question 8

Exceptions to apparent authority

Answer 8

Admitting a new partner,

selling our pledging property, Can’t sell goodwill of partnership.Can sell inventory

admitting or submitting a legal claim,

promising to pay the debts of another

Partners can agree that a decision that’s normally made by one of them has to be made unanimously

Question 9

Unanimous consent required for

Answer 9

AGAST

Admitting a new partner

Guaranteeing that that’s of a third-party – suretyship

Admitting or submitting a legal claim in court or to arbitration

Sale or pledge of partnership property – sell Goodwill

Third parties are notified/aware of a limit to the partners actual authority

Question 10

Fiduciary duties of partners

Answer 10

Duty of loyalty

Duty of care

Must refrain from competing with the partnership

Partners also have a duty of good faith and fair dealing in the discharge of all their duties

Question 11

Liability

Answer 11

Partners have a joint and several liability on the contract - voluntary- and that’s made by the partnership with third parties. If breach of contract the third-party must attempt to recover damages out of partnership assets first then can access personal assets for remaining amount. If one partner is banquet the third-party can access sufficient assets of the solvent partners to satisfy a claim

Also on torts- involuntary. A tour is a wrongful act whether intentional or negligent not arising out of contractual obligations and causes an injury and can be remedied at civil law usually through awarding damages

Creditors for us at 10 should be with partnership unless the partnership is bankrupt, then partners. A silent partner has a limited liability

Question 12

New partner liability

Answer 12

Old liability up to Capitol contributed, new liability after admittance is unlimited liability

Question 13

Retired partners

Answer 13

They have a limited liability with the old. Liable on apparent authority with a new liability. Unless creditors agreed to perform innovation to release the retiree. And agreement by other partners will not release the retiree since the debts are not old to the other partners. But an agreement will serve as an indemnification agreement and the partners can reimburse the retiree for amounts they have to pay to creditors

When a partner at tires to have to give proper notice to clients and to partnership, they can still make binding contracts if they don’t

Actual notice is directly informed. Constructive notice is an announcement made and publications that third parties can read

Question 14

Allocation of losses

Answer 14

Based on their agreements, this year losses as they share profits if there’s no explicit agreement. If a partner loses below their capital account then they are personally liable for the deficit

If a partner transfers or interest to pay a debt the transferee is entitled to profits and surplus but doesn’t have any rights your obligations with the partnership

Question 15

Dissolution

Answer 15

The result of the change in the relation of the partners when a partner seizes to be associated with the carrying on of the business

A partnership dissolved if there is only one member left. It doesn’t have to liquidate assets and see his business but they have to make legal arrangements and modify. A partnership that will is used to describe a partnership without a specified duration

If no term specified in any partner can dissolve the partnership, as specified the consent of all the partners is needed

Dissolution comes before termination of partnership

Can be dissolved by court decree or a violation of partnership agreement

Question 16

Entity theory

Answer 16

Provides a conceptual basis for continuing the firm it’s self, despite a partners withdrawal from the firm

Question 17

Partnership taxes

Answer 17

Form 1065, not obligated to pay income taxes Beneze to file annual informational returns to allocate income of the partnership to the partners – flow through. Tax law treats a partnership as a separate legal entity for the purpose of collection of payment of payroll taxes

Question 18

Partner with drawls

Answer 18

Any partner can withdraw from the partnership unless they have a contract then it’s a breach of contract. If a partner with drawls, dies, or is bankrupt the partnership can go on with the remaining partners with a majority share.

Question 19

Termination

Answer 19

The partnership starts winding up the stairs. Our assets folder, liabilities paid, and surplus will be distributed to the partners. Gains and losses will be allocated to the partners according to their profit and loss percentages.

If there’s a deficit the partner has to make a contribution to a partnership to a lemonade it. As a partner is bankrupt the deficit balance has to be allocated to the remaining partners according to their profit and loss percentages

Question 20

Distributions order

Answer 20

Amounts owed to partners for loans to the partnership, partners capital accounts, amounts owed to partners for profits

Question 21

Distributed amount upon termination

Answer 21

Gains and losses allocated according to profit and loss percentages

In case of deficit balance and bankruptcy and inability to contribute amount of the deficit the remaining deficits after what is contributed is allocated to the remaining partners in accordance to the profit and loss percentages

When all assets are sold, profits and losses are allocated and liabilities are paid, the remaining cash is equal to the partners capital balances

Cash is then distributed to the partners

Question 22

Limited partnership

Answer 22

Individuals who want the benefits of corporate structure with the benefits of a partnership, limited liability, and the ease of formation and being treated as a pass-through entity for tax purposes.

Question 23

UPLA RULPA

Answer 23

Uniform limited partnership act – adopted by a few states new ULPA

Revised uniform limited partnership fact that the states allow limited partnerships have adopted this

Question 24

General partner

Answer 24

At least one general partner is required for a limited partnership to be formed

Responsible for the management and operations of the partnership and has unlimited liability

Can be a corporation providing it’s limited liability protection. A general partner can be indicated by the agreement, replacement of a disassociated general partner, result of a conversion or merger, or with the consent of all partners

Question 25

Limited partner

Answer 25

For a limited partnership to be formed requires at least one limited partner. A passive investor with limited authority and liability that is limited to the amount invested. Generally has no personal liability.

Can conduct business with the LP as a third-party

Question 26

Certificate of limited partnership – formal

Answer 26

Required to form a limited partnership with the secretary of state. Includes: names and signatures of general partners, name and address of the limited partnership, name and address of its agent, latest date on which the limited partnership is expected to terminate.

Question 27

General partner with drawl

Answer 27

Provide notice and express will to withdraw
Occurrence of an event specified in the partnership agreement
Expulsion by terms on agreement or unanimous consent of other partners

Question 28

Derivative suit

Answer 28

A limited partner can bring a derivative suit and can participate and vote on decisions related to:

Amendments on agreement
Dissolution or winding up
Changes to the nature of the business
Loans
General partner changes

Question 29

Limited partner interest

Answer 29

Can be a signed without the approval of other partners. The acquirer obtains only the limited partners rights to profits and is considered a creditor of the limited partnership