Managing/Governing

Question 1

transfer of partnership interest

Answer 1

default= a partner has the right to transfer a partnership interest to a 3P.

• current rule= the partnership continues past the death of a partner or the transfer of a partnership interest
• partners can change rule or restrict changes

Question 2

new partner

Answer 2

default rule= all existing partners must consent to the new partner

Question 3

managing the partnership

Answer 3

default= every partner has equal rights in the management and control of the partnership

• can be changed by the agreement
• a common division is to reflect the partners’ capital contribution or some other contribution

Question 4

Ordinary Business Matters

Answer 4

-requires a vote of majority of the partners

Question 5

Extraordinary business matters

Answer 5

• requires of a vote of all partners

- can be changed by agreement

Question 6

Access to Records

Answer 6

-MUST be provided to the partners and their agents

Question 7

Withdrawal

Answer 7

• a partner can cease to be a partner voluntarily or involuntarily

Question 8

Voluntary dissociation

Answer 8

-partner may give notice to the partnership that the partner wants to withdraw

Question 9

involuntary dissociation

Answer 9

1) there may be an event triggered in the partnership agreement
2) can be kicked out pursuant to the agreement
3) a court order
4) a partner goes bankrupt
5) a partner dies
6) incapacity
7) one of the entities of the partnership dissolves (goes out of business)

Question 10

Agreement on Withdraw

Answer 10

• the agreement generally cannot prohibit a partner from withdrawing
• can require certain procedures for withdraw

Question 11

Consequences for dissociation

Answer 11

• partnership not terminated if a partner withdraws
• former partner has no right to participate in management after withdraws
• no longer has any duties to the partnership
• if the partnership continues, it must buy out the withdrawing partner’s interest

Question 12

Death of a partner

Answer 12

• if the partnership interest of the deceased partner is subject to redemption, the partner’s surviving spouse is a creditor of the partnership until the redemption price is paid
• If the partnership interest of the deceased partner is not subject to redemption, the partner’s surviving spouse is a transferee of the partnership interest.
• A transfer of a partnership interest does not, in the absence of an agreement, entitle the transferee to anything more than the right to receive distributions of partnership profits to which the transferor would have been entitled.

Question 13

Transferee is entitled to

Answer 13

• is entitled to reasonable information or an accounting of partnership transactions and inspection of the partnership books for proper purposes.
• is not entitled to interfere in the management or administration of the partnership in the absence of an agreement that states otherwise.