Florida Partnerships Flashcards
Define a partnership and RUPA
Florida has adopted the Revised Uniform Partnership Act, which defines partnership as an association of two or more persons to carry on as co-owners a business for profit. RUPA is based on the law of contracts and agency
What is the relationship between partners rights to manage?
Absent an agreement to the contrary, all partners have equal rights in the management of the partnership business.
When matters are within the ordinary course of business, how many partners are needed to approve the decision? How many are needed when the decision is NOT in the ordinary course of business?
Decisions regarding matters within the ordinary course of business of the partnership may be controlled by a majority vote, but matters, outside the ordinary course of business require the consent of all parties.
What rights does a partner have in property?
A partner is NOT a co-owner of partnership property and has no interest in partnership property. Thus, a partner’s creditors may NOT reach partnership property to satisfy the personal obligations of a partner.
When and how does a creditor attach to a partner’s interest in partnership distributions?
On application to a court with jurisdiction, the creditor of a partner may charge (attach) the transferable interest of the debtor partner to satisfy the judgement. The charging order becomes a lien on the interest. The court may also appoint a receiver of the debtor’s share of the distribution due to or to become due from the partnership,
What is the partnership distribution scheme (absent an agreement to the contrary)
Each partner is deemed to have an account that is created with the new amount equal to the partner’s contribution, plus or minus the partner’s share pf any profits or losses, less any partnership liabilities.
What is the partnership profit scheme (absent an agreement to the contrary)
Absent an agreement to the contrary, profits are shared equally; losses are shared in the same way as profits.
What is remuneration?
money paid for work or a service; absent agreement to the contrary, a partner is not entitled to remuneration except for reasonable compensation for services rendered in winding up the partnership business.
What happens when the partner makes payments reasonably made and obligations reasonably incurred by a partner in carrying on the business of the partnership
The partnership must indemnify partners for payments reasonably made and obligations reasonably incurred by a partner in carrying on the business of the partnership.
Must the partnership repay a partner when he/she spends beyond the amount the partner agreed to contribute? If so, how is that payment by the partner considered?
If a partner makes any payment or advance on behalf of the partnership beyond the amount the partner agreed to contribute, the partnership must repay the partner. Such payments, obligations, and advances constitute loans to the partnership, which must be repaid with interest.
What happens when a partner fails to contribute to the partnership’s debt?
If a partner fails to contribute to the partnership’s debt, all of the other partners must contribute the additional amount necessary in the proportion in which the partners share losses.
When a partner pays more than his share of the partnership’s debts, what is the result?
Where a partner is forced to pay more than his share of the partnership’s debt, he is entitled to contribution from the others to equalize it.
What is the general rule regarding acts or contracts done by any individual partner?
Apparent Authority is…
The act or contract of any individual partner will BIND the partnership if the action was in the ordinary course of the partnership business (or was a type of action that the business ordinarily conducts)
Apparent authority - The act or contract of any individual partner will BIND the partnership if the action was in the ordinary course of the partnership business (or was a type of action that the business ordinarily conducts) UNLESS…
UNLESS the partner has NO apparent authority to act for the partnership in the particular manner; and the person with whom the partner was dealing KNEW or had received notification that the partner lacked authority.
When are the partners JOINT AND SEVERALLY liable?
All partners are JOINT AND SEVERALLY liable for all obligations of the partnership including CONTRACTS made by the partnership and TORTS committed by ANY partner in the ordinary course of the partnership.
