partnership

Question 1

partnership

Answer 1

association of 2 or more persons carrying on as co-owners of a business for profit

Question 2

incoming partner’s liability for pre-existing debts

Answer 2

no direct personal liability, but capital contributed can be used for that purpose

Question 3

dissociating partner’s liabilty for subsequent debts

Answer 3

partner retains liability until actual notice of dissociation is given to creditor or until 90 days after filing notice of disassociation with the state

Question 4

general partnership liability by estoppel

Answer 4

one who represents to a third party that a general partnership exists will be liable as if a general partnership exists

Question 5

duty of loyalty

Answer 5

partners must never engage in self-dealing, cannot usurp partnership opportunities, and may not make a secret profit at partnership’s expense

Question 6

action for accounting

Answer 6

partnership may bring action to recoup losses or to account for profits made by breaching partner to disgorge profits

Question 7

partnership assets

Answer 7

lands, leases, equipment, trucks, cars owned only by partnership cannot be transferred by any individual partner

Question 8

share in profits

Answer 8

personal property owned by individual partner and can be transferred

Question 9

share in management

Answer 9

not personal property, relatively illiquid and cannot be transferred

Question 10

test for whether property is owned by partnership or an individual partner

Answer 10

whose money was used to buy the property? if personal money, personal property. If partnership money, partnership property

Question 11

management of partnership

Answer 11

absent an agreement, each partner is entitled to an equal vote

Question 12

salary

Answer 12

absent agreement, partners get no salary except compensation for helping to wind up the partnership business

Question 13

dissolution

Answer 13

absent an agreement specifying events of dissolution, general partnership dissolves upon notice of express will of any one general partner to dissociate

Question 14

winding up

Answer 14

remaining partners liquidate assets to fully satisfy creditors

Question 15

priority of distribution

Answer 15

first, partnership must pay all creditors, including partners who loaned money

second, partnership must repay all capital contributions paid into partnership by partners (money paid in by partners not for any fixed rate of interest)

third, profits or losses are shared equally absent any agreement

Question 16

limited partnership

Answer 16

partnership with at least 1 general partner and at least 1 limited partner.

general partners are jointly and severally liable, control the management of the partnership

limited partners have limited liability - not liable for obligations of other partners or partnership. may not manage business without forfeiting limited liability

limited partnership forms must file limited partnership certificate including names of all general partners

Question 17

registered limited liability partnerships

Answer 17

must file statement of qualification and annual reports

no partner s liable for partnership obligations but are liable for own wrongdoing or those under their direct supervision