Partnership

Question 1

partnership

Answer 1

a partnership is an association of two or more persons to carry on as co-owners a business for profit.

Question 2

creation of partnership

Answer 2

only requires intent. oral partnerships and implied from conduct partnerships are common.

Question 3

factors that show intent to carry on as partners

Answer 3

sharing of profits - presumption of partnership
sharing of losses
contribution of money/property
agreement of responsibilities/rights
extensive activity
business name

Question 4

SOF length of term of durational partnership

Answer 4

if the partnership is time-limited, that shit better be in writing if it’s over 1 year.

Question 5

transfers of partnership interests

Answer 5

when transferred, the transferee only has the right to profits that the original partner had, but does not become partner. Cannot participate in management.

Question 6

involuntary transfers (creditors)

Answer 6

a creditor can attach a partner’s interests and is treated as a transferee. creditor does not become a partner.

Question 7

partnership rights

Answer 7

equality in all powers:
management rights
profits
distribution on liquidation
access to books and info
losses shared the same as profits.

Question 8

duties of partners

Answer 8

owe each other fiduciary duties of:
loyalty
care
good faith and fair dealing

Question 9

partner liability

Answer 9

each partner is liable personally but secondarily for all partnership debts, meaning creditor must first exhaust all partnership assets before moving in on personal assets.

Question 10

terminating a partnership (4)

Answer 10

1. disassociation: change in the legal partnership
2. dissolution: kill the business entity.
3. wind-up: finish all pending business transactions
4. termination: completion of winding up

Question 11

disassociation

Answer 11

change in the legal relationship

1. exit of any partner
2. death/bankruptcy of a partner
3. expulsion of the partner by other partners or by the courts

Question 12

dissolution

Answer 12

partnership at will: dissolution will result from ANY disassociation event, UNLESS the remaining partners waive dissolution.

partnership for a definite term: dissolution occurs after disassociation events if the majority elect dissolution; upon completion of the task; or if all partners agree to end.

Question 13

order of partnership assets distribution

Answer 13

debts to outside creditors
debts to partners
return of partners’ capital
profits