Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business Entities , agencies and Corps > General Partnerships > Flashcards

General Partnerships Flashcards

1
Q

Gral Partnerships - Regulation / Waiver prohibition

A
  • Most states: RUPA - (Revised Uniform Partnership Act of 1997)
  • gives room to parties to negotiate terms
  • Prohibition for parties to waive certain provisions:
    a) good faith and fair dealings, duty of loyalty
    b) Limit access to records and financial statements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Gral Partnerships - Concept/Elements (3)

A
  • Association of 2 or more persons
  • W/ intention to carry or manage as co-owners
  • A business for-profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Gral Partnerships - Ownership Rules

A

Gral rule: partners w/= interest in capital/profit/loss allocation/distributions (unless agreed otherwise)

  • distinguishes from agency
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Gral Partnerships - Ownership Rules - Cases of No presumption of psx when (4)

A

1) joint tenancy
2) Tenancy in common
3) Joint Property
4) Community Property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Gral Partnerships - Ownership - Share of profits presumption

A

Right to receive is presumed from partner status

  • Does not include shares of: wages, gross receipts, wages, sale, rents, ppals or interest from loan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Gral Partnerships - Types of duration (3)

A

1) For definitive term
2) For particular undertaking (i.e. joint venture)
3) At-will : no time limitation (MOST COMMON)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Gral Partnerships as Entity Organization - Filing reqs

A

None - is enough for parties to intentionally act as such EVEN without knowledge of creation of psx or w/out describing business as such

  • Optional: file “Statement of Partnership authority” (psx agreement)
  • Can choose to act under trade name
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Gral Partnerships as Entity Organization - “Statement of Psx Authority” (psx agreement) - Content NAILA

A
  • Name of psx
  • Address of CEO
  • In-state office address
  • List of partners
  • Authority to transfer real estate - etc

[Statement of denial: filed by person to deny authority or partnership]

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Gral Partnerships as Entity Organization - “Statement of Psx Authority” - Effects

A

If registered - specific authority (i.e. to transfer real estate) is deemed conclusive against 3rd parties as Constructive Notice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Gral Partnerships - Capacity

A

Same rules as for CL +

  • infants: can dissafirm but not withdraw capital to detriment of creditor
  • corps, LLC and other entitiies can act as partners
  • Either spouse can be partner in non-realty psx w/o other’s consent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Gral Partnerships - Formation methods (3)

A

1) Express - SOF if over 1 year
2) Implied - i.e. share benefits
3) Estoppel: present himself as partner or allow name to be used

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Gral Partnerships - Formation methods - Express - Gral

A
  • Written if over 1 year or for real estate / Oral if at-will
  • No restriction on type of contribution of capital (i.e. services, promissory notes)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Gral Partnerships - Formation methods - Express - Ownership rights

A

Unless agreed otherwise:

  • ALL with = % of equity, capital interest, share of profits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Gral Partnerships - Formation methods - Implied

A
  • When certain conduct leads to satisfy psx formation elements
  • i.e. share profits, share mgmt, make capital contribution.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Gral Partnerships - Formation methods - Implied - Effects on liability

A

Implied psx as E of rebuttable presumption of several and joint liability among partners

-burden on supposed partner to prove otherwise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Gral Partnerships - Formation methods - Estoppel - Gral + for whom’s benefit

A
  • WHEN someone presents himself as partner or knowingly allows his name to be used in psx trade name
  • As protection for 3rd parties who granted credit relying on that representation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Gral Partnerships - Property Rights - Gral

A
  • Owned by entity NOT individually
  • Partner interest = share of profit/loss + right to distributions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Gral Partnerships - Property Rights - Applicable presumptions in relation to under whose name property is held, who acquired and use

A
  • If acq w/psx assets: Presumed owned by psx even if held under partner’s name
  • If acq by partner and under his name: Presumed to be owned by partner, even if for psx purpose
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Gral Partnerships - Property Rights - Conveyance of Partner’s Interest

A
  • Doesn’t dissolve psx
  • Assignee receives share + “liability shield”
  • BUT no mgmt/adm rights unless agreed AND no rights to inspect books, or info and accounts of transactions (RUPA - modern view, different from CL)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Gral Partnerships - Property Rights - “Charging Order”

A
  • Requested by individual partner’s creditor to court after judgment
  • To charge interest in psx for unsatisfied amount
  • Allows payment of shares/profits/other due directly to creditor
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Gral Partnerships - Rights and Duties (6)

A

1) Fiduciary
2) Profit/loss share
3) Management
4) Rights to inspect books and records
5) Right to receive information
6) Actions by psx/partners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Gral Partnerships - Fiduciary duties - Gral

A
  • For all partners
  • Creates liability to psx for breach
    • Includes duty of loyalty, reasonable care, good faith and fair dealing, and disclosure of conflictive transactions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Gral Partnerships - Fiduciary duties - Loyalty (CAP)

A

1) Competition prohibited
2) Avoid adverse interests representation or transaction with psx
3) Psx accounting for benefits and use or hold any property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Gral Partnerships - Fiduciary duties - Standard of care

A

Reasonable care

  • no gross N, recklesness, intentional misconduct or knowing violation of law
25
Q

Gral Partnerships - Profit/Loss Sharing - Gral rule

A

Equal for all partners

26
Q

Gral PSX - Profit/Loss - Compensantion gral rule

A

no compensation for psx activties

27
Q

Gral Partnerships - Profit/Loss Sharing - Exception to rule of no compensation to partners (3)

A

1) “wind down” activities
2) Extraordinary efforts
3) Reimbursement or indemnification for expenditures and personal obligations incurred in proper and ordinary cause of actions

28
Q

Gral Partnerships - MGMT - Gral Rule

A
  • All partners and all with = rights to decide on day to day basis
  • Voting quorum for more relevant decision
29
Q

Gral Psx - MGMT - Decision making

A
  • Any ordinary decision requires majority (day-to-day)
  • Change of agreement AND expulsion of partner AND other extraordinary decision (as decided by court)- Requires unanimity
30
Q

Gral Partnerships - Actions for liability for psx/partners

A

1) By psx vs partner for breach of contract or duty
2) By partner vs psx or other partner for legal or equitable relief that doesnt cause dissolution

31
Q

Gral Partnerships - PSX liability to 3rd parties - Gral

A
  • All partners PERSONALLY liable for all psx debts/obligations
  • JOINT and SEVERALLY - hence plaintiff can go first against psx assets and then against any partners - and then possible contribution among partners
32
Q

Gral Partnerships - PSX liability to 3rd parties - Exception for entering partner (assignee of interests on psx)

A

Liable only to extent to contribution for psx’s pre-admission torts/contractual breaches

UNLESS: - intentional waiver of “liaiblity shield”

    • Express assumption of responsibility beyond contribution
33
Q

Gral Partnerships - PSX liability to 3rd parties - Rule on imputed knowledge of PSX

A
  • PSX charged w/knowledge by constructive notice or notice given to any partner
34
Q

Gral Partnerships - PSX liability to 3rd parties - Agency

A
  • Every/All partner(s) is agent
  • Contract liability for psx if within ordinary course (Not if partner lacks authority OR 3rd party knows or should know about lack of authority OR outside scope of authority)
  • Torts liability of psx as respondeat superior
35
Q

Gral Partnerships - PSX liability to 3rd parties - Transfer of psx property under psx name

A
  • Ok if partner authorized
  • If not: PSX can recover from 3rd party that knew of lack of authority (but not against subsequent BFP)
36
Q

Gral Partnerships - PSX liability to 3rd parties - Transfer of psx property under partner’s name

A

Only by partner under whose name is held

  • Psx can recover only if transferee new property was owned by Psx and partner lacked authority
37
Q

Gral Partnerships - PSX liability to 3rd parties - Transfer of psx property rule for recorded real estate transfer authorization

A

Recorded specific authorization for sale of real estate on psx agreement

  • as constructive notice for 3rd parties to allow recovery
38
Q

Gral Partnerships - Dissociation - Concept / Rights /Effects

A
  • When partner leaves psx
  • Partner entitled to current value of interest
  • “wind up” scenario when only 1 partner left (dissolution)
39
Q

Gral Partnerships - Dissociation - Causes (2)

A

1) By express will of partner
2) By expulsion: (3) by partners OR judicial OR bc of insolvency

40
Q

Gral Partnerships - Dissociation -By express will

A
  • By partner at any time
  • Unless otherwise agreed - as breach of psx agreement (i.e. before set term)
41
Q

Gral Partnerships - Dissociation -By Expulsion by partners

A
  • Unanimously
  • With cause: very limited - i.e. unlawfulness, trasnfer of interest w/o approval
  • Without cause as agreed on psx agreement
42
Q

Gral Partnerships - Dissociation -By Judicial Expulsion (3)

A

When partner:

1) wrongful action
2) material breach of psx agreement or fiduciary duty
3) Impracticable to continue business with that partner

43
Q

Gral Partnerships - Dissociation -Bc of insolvency (examples)

A
  • Petition for bkrupt or appointment of bkrup trustee
  • Assignment of essential assets to creditor
  • Charging order [UNLESS vacated within 90 days]
44
Q

Gral Partnerships - Unlawful Dissociation - Causes (2)

A

1) Violation of psx agreement
2) When Psx was created for specific term or undertaking and partner dissociates previously

45
Q

Gral Partnerships - Unlawful Dissociation - Effects

A
  • Cant force them to remain as partners
  • Cause of action for potential damages
46
Q

Gral Partnerships - Dissociation - Effects on psx

A

1) If psx-at-will: psx terminates
2) If non-psx at will: psx survives

47
Q

Gral Partnerships - Dissociation - Effects on dissociated partner

A
  • Looses right to mgmt/conduct business
  • Duty of loyalty remains only regarding pre-disassociation matters
48
Q

Gral Partnerships - Dissociation - Purchase of disassociated interest - Conditions and Price

A
  • Possible if no dissolution of psx (no psx at will)
  • DX offset against buy-out-price
  • Price: = to pro-rate share of psx net-assets unless otherwise agreed
  • Parties must agree on final amount
49
Q

Gral Partnerships - Dissociation - Purchase of disassociated interest - Lack of agreement on price (procedure)

A
  • No agreement within 120 days:
    1) Psx must tender cash offer w/explanation of price + financial statements
  • Disassociated partner has 120 days to accept or start legal action

OR

2) If no tender by PSX: partner has 1 year to start action

50
Q

Gral Partnerships - Dissociation - Disassociated partner ongoing liability

A
  • Liability and right to indemnify remains for obligations pre-disassociation
  • No added liability if psx maintains name on psx name
  • Authority as agent ends
  • BUT liability remains for lingering apparent authority for 2 years UNLESS “Statement of dissociation” - 90 days as constructive notice
51
Q

Gral Partnerships - Dissolution Causes (5)

A

1) Agreed by at least half of remaining partners
2) Termination event set in psx agreement
3) Illegality - event makes business unlawful
4) Judicial determination
5) Dissociation for psx-at-will AND/OR of last partner

52
Q

Gral Partnerships - Dissolution Causes - Judicial determination - Grounds (3)

A

1) economic frustration
2) Equitability of winding-up business
3) Partners conduct makes continuation impractical

53
Q

Gral Partnerships - Dissolution - Wind down

A
  • Psx continues post dissolution for purposes of winding down
  • By partners not wrongfully dissociated or by judicial supervision
  • Can bound psx or partner if unauthorized act
54
Q

Gral Partnerships - Dissolution - Wind down - Statement of dissolution

A
  • Filed creates constructive notice after 90 days on apparent authority
  • Cancels previous statement of psx
55
Q

Gral Partnerships - Dissolution - Liquidation Distribution Priority - Gral

A
  • Any loss/profit credited/charged to partners accounts
  • Gral rule: pay debts first ad then distribute - CPU
  • Creditors
  • Partners for capital accounts
  • Undistributed proftis to partners equally unless agreed on
56
Q

Gral Partnerships - Dissolution - Liquidation Distribution Priority - CPU

A

1st: Creditors (including partners as creditors)
2nd: Partners for capital account contributions
3rd: Undistributed profits to partners - equally unless agreed otherwise

57
Q

Gral Partnerships - Dissolution - Liquidation Distribution Priority - Rules when insolvency

A
  • Partner assessed for contribution
  • If insolvent his share is allocated among other partners who then have contribution right
58
Q

Gral Partnerships - Conversions/Mergers - gral

A
  • Allowed by RUPA when partners agree
  • if partner dissents: entitled to receive fair market value for interest
59
Q

Gral Partnerships - Conversions

A

From gral psx to Limited psx

  • need to file new certificate of ltd psx

Business Entities , agencies and Corps (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions