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BLP > Partnership > Flashcards

Partnership Flashcards

1
Q

How are decisions taken in a partnership

A

By a majority

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2
Q

Exceptions where decisions don’t need to be taken by majority - these must be unanimous

A

Changing nature of business
Introducing new P
Changing terms of P agreement
Excluding a P

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3
Q

Can a P delegate some decisions to an employee

A

Yes

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4
Q

Can Ps agree that more decisions must be taken unanimously

A

Yes

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5
Q

Define partnership

A

2 or more people carry on a business in common with a view to make a profit

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6
Q

Is there an implied restraint of trade clause for Ps

A

No

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7
Q

In what form does a P agreement need to be

A

Written, oral or implied by conduct (no one objects to the way things are done)

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8
Q

Restrictions on name of partnership

A

Cannot include Ltd Plc LLP offensive words same as existing name sensitive words or suggest a gov connection

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9
Q

What if Ps continue beyond expiry of fixed term agreement

A

Continue on same terms as before

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10
Q

Does PA 1890 imply holiday or sick pay

A

No

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11
Q

Are Ps employees

A

No

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12
Q

What is the income and profits that Ps receive called

A

Called drawings

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13
Q

Do Ps get a salary

A

Only if this is in the agreement

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14
Q

Do firms stop trading when partnership is dissolved

A

Not necessarily
Dissolution means ending of contractual relations
Can continue trading and it is still dissolved

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15
Q

How does outgoing P get their share back

A

They can insist it is sold so agreement must provide for partial dissolution

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16
Q

Does outgoing P get interest

A

5% until they receive their share

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17
Q

What is good will

A

Business reputation and value of clients and contracts

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18
Q

How is goodwill calculated

A

2 years profit

19
Q

When a firm is sold how are proceeds applied

A 
Creditors
Debts/ loans
Ps loans
Ps capital
Surplus shares between Pso
20
Q

Under what circumstances can P apply to court for an order that firm is dissolved

A 
P is perm incapable 
P is prejudicing firm
Wilful or repetitive breach of agreement
Can only carry on at a loss
Or
Just and equitable
21
Q

What is a partnership at will

A

A partnership that carries on indefinitely until notice is given

22
Q

What does automatic dissolution mean

A

All assets must be sold or sold as going concern and outgoing P must receive their shares

23
Q

Under 1890 act when is a partnership dissolved.

A 
Business becomes unlawful
P retires
Expiry of fixed term
Death
Bankruptcy 
P gives notice to P who was granted a charge over their share
24
Q

Duty of P to other Ps

A

Duty of utmost fairness and good faith

25
Q

What is included in Ps duty of utmost fairness and good faith

A

Open about info re Firm
Account for profits from firm made without consent
Cannot compete with firm or must account for profits

26
Q

What if a P pays more than their fair share of liabilities or expenses

A

Other Ps must indemnify them

27
Q

Do contracts need to be made by all Ps together

A

Can be made by all Ps or just one

28
Q

Are firms always bound by contracts entered into by P in Firms name

A

Yes if P was acting with authority

29
Q

How can P be authorised

A

Ps acted jointly
Actual authority express or implied
Apparent authority

30
Q

How can actual authority be implied

A

All Ps are involved in running firm without any limitations

Regular behaviour no one objected to

31
Q

What does apparent authority mean

A

Firm is bound by unauthorised actions which appear to an outside to be authorised

32
Q

When does P have apparent authority

A

Transaction relates to business (objective)
Transaction is one P would be expected to have authority for (objective)
Other party didn’t know P didn’t have authority (subjective)
Other party thinks they are dealing with a P ( subjective)

33
Q

What if P acts without actual authority

A

P will indemnify firm for loss

34
Q

Who is liable for wrongful acts or omissions by P who acts in ordinary course of firms business or with authority

A

The firm

35
Q

Does a P continue to be liable for firms debts after retirement

A

Yes liable for debts incurred while they were a P

36
Q

2 ways to stop P from being liable for debts incurred by firm while they were a P

A

Novation agreement

Indemnity

37
Q

What is a notation agreement

A

Retiring P released from existing debt through agreement with creditors, other Ps and poss new P

If no new P need consideration or deed

38
Q

How does indemnity prevent P from liability for debts incurred while they were P

A

Agreement between outgoing P and other Ps

Creditors can sue retired P and then he claims against other Ps

39
Q

How to prevent outgoing P from being liable for new firm debts incurred after they leave

A

Actual notice to anyone firm has dealt with (not in newspaper)
Notify all world (loving gazett)

Otherwise can treat all apparent members of firm as still Ps

40
Q

What happens to an insolvent firm

A

Can be wound up as an unregistered company or may use rescuer procedures available to companies

41
Q

What is holding out

A

When creditor gives loan based on representation that a person is a P of the firm

42
Q

Consequences of holding out

A

Person representing as P can be liable for debt even if representation was by someone else as long as it was with their knowledge

43
Q

Wil P be liable for future debts of firm is they die or are bankrupt

A

No

No need for notice to previous clients and whole world

44
Q

Who can a debt of the firm be enforced against

A

P with who creditor made contract
Any P at time debt was incurred
The firm

Ps must contribute if just one P is sued
Usual debt enforcement options apply

BLP (22 decks)

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