GENERAL PARTNERSHIP

Question 1

Characteristics of Partnership

Answer 1

1. Unlimited Liability for Partners
2. Ability to co-manage partnership
3. Fiduciary duty exist between the partners and the partnership
4. Partner share in profits

Question 2

Who can be considered a “person”

Answer 2

1. Individual
2. Corporation
3. Trust
4. Estate
5. Partnership
6. Other Associates

Question 3

Formation of Partnership

Answer 3

two or more persons who associate to carry on a business for profit

can be inferred from the conduct of the party

No agreement or consent required

Focus on the intent on the parties

Question 4

Partnership v. Joint Venture

Answer 4

Joint Venture - Association contemplating a single transaction or a related series of transaction

Partnership - Carrying on of a business

Question 5

Capacity

Answer 5

Any person with capacity to enter into K

Corporation is good as long as it doesnt violate articles and bylaws

Question 6

What does the sharing of profits from a business indicate

Answer 6

It is prima facie evidence that your a partner

Question 7

General Partnership

Answer 7

Association fo two or more persons to carry on as co-owners of a business for profit

Question 8

Joint Venture

Answer 8

Association contemplating a single or mulltiple transactions

Question 9

Dissociation

Answer 9

Withdrawl of a partner from the partnership

Question 10

Winding up

Answer 10

Process of settling partnership affairs

Question 11

Termination

Answer 11

Point at which all the partnership affairs are winded up

Question 12

Mandatory Dissolution

Answer 12

Partnership must be dissolved and business must be wound up due to events or statutes

Question 13

Permissive Dissolution

Answer 13

Partnership can be dissolved at any time by unanimous consent, regardless of duration specified in partnership agreement

Question 14

Limited Liability Partnership

Answer 14

Partnership in which all the partners gain protection from liability for obligation of the partnership and protection from the conduct of other partners including omissions, neligence, wrongful acts, misconduct, malpractice.

They remain liable for their own neligence and negligence of those under their supervision

Question 15

Limited Partnership

Answer 15

Partnership formed by two or more persons having atleast one general partner and one limited partner

Question 16

General Partner

Answer 16

Partner who manages the business and is personally liable without limitation

RIGHTS:
Each general partner has an equal right to manage and conduct the partnership’s business

Each general partner is an agent of the partnership in the conduct of its business OR if taken outside ordinary course of business only if all general partners had consented to the action

Question 17

Limited Partner

Answer 17

Partner who contributes capital and shares in profits, but takes no parti int the control or management of the business and whose liability is limited to his financial contributions to the business

Limited partners do not have right to co-manage the business along with the general parntners AND are not authorized agents of the partnership therefore lacking the ability to bind them into Ks.

Rights:
1. Seek information for a purpose reasonably related to their interest as a limited partner including:
inspect and copy the required partnership records and tax returns, and ont

Question 18

Rules regarding partnership agreements

Answer 18

Rules regarding the relations between the partners is governed by partnership agreement or otherwise by the UPA

UPA provisions that cannot be waived:

1. Reasonable access to books and records
2. Aspect’s of partner’s duty of loyalty, duty of care, and right to dissociate are also non-waivable.

Question 19

Duties within the Partnership

Answer 19

Duty of Care - General Partners must not engage in: grossly negligent or reckless, Intentional misconduct, or a knowing violation of the law

Duty of Loyalty - General Partners owes loyalty to partners and partnership.

Partner must not engage in dealings with partnership IF dealings are intended to be adverse to partnership interests

Partners must account for any benefit, and hold as trustee any profit derived from a transaction connected with partnership business or property.

Duty to Disclose -

GENERAL PARTNERS:
Partners and partnership have duty to furnish WITHOUT DEMAND information that is related to the partnership business and reasonably required for the exercise of partner duties.

WITH DEMAND there is a duty to furnish to a partner information that concerns the partnership business so long as demand is not unreasonable or improper in the circumstances

LIMITED PARTNERS:

Has a lesser obligation of GOOD FAITH AND FAIR DEALING

Question 20

Profits, Losses and Contributions

Answer 20

Absent contrary agreement, each partner is entitled to share equally in the profits and losses generated in the partnership business.

Question 21

Personal Property v. Partnership Property

Answer 21

A partner’s personal property includes:

1. His financial interest in his share of the partnership’s profits and losses
2. His right to receive distributions from the partnership

Unless otherwise note, partner may transfer his partnership interest to another. This only includes the financial interest and right to distributions. It DOES NOT include the right to participate in the management and control of the business or the ability to access partnership info, books or records.

Transfer does not result in automatic dissolvement of

Question 22

Liability to Third-Parties

Answer 22

Partnership is liable for torts committed by partners when their conduct is committed in the ordinary course of business or with authority of partnership

General Partners are liable jointy and severally for all obligations of partnership arising under tort, contract, etc

When General partners pay more than their share, they can compel other partners to pay via contribution.

Incoming partner not personally liable for obligations incurred before his admission as a partner

Creditor of an individual partner is limited to seeking satisfaction from that partner’s personal property, which in the partnership context includes his share in the partnership’s profits and the right to receive distributions.

Limited Partner liability limited to his capital contribution UNLESS he begins to participate in management and control of the business