Partnership

Question 1

How is voting done in a partnership?

Answer 1

Absent a partnership agreement – equal voting power.

Question 2

Profit sharing? and Losses?

Answer 2

Unless otherwise agreed… profit is shared by number.

Losses are shared in the same way as profits… unless otherwise agreed.

Question 3

Liability for partners?

Answer 3

Jointly and severally liable… each partner can be sued for all obligations of partnership.

Question 4

Contract out of liability to 3rd party? how does this work?

Answer 4

Binding contract with your partners… but you are still jointly and severally liable with 3rd party.

Question 5

Duty of Loyalty for partnership

Answer 5

Gotta be putting the partnerships interests before your own. Utmost fairness.

Question 6

Duty of Care (partnerships)

Answer 6

Requires each partner to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or knowing violation of law.

Question 7

Can you contract out any of your duties?

Answer 7

Yes, but not the fiduciary ones… care and loyalty.

Question 8

How to dissociate from a partnership?

Answer 8

Event of dissociation must happen.

1. Express will to withdraw – oral or written
2. happening of agreed event
   valid expulsion of the parnter
   the partners bankruptcy
   the partners death or incapacity to preform duties
   decision by court
   termination of business entity that is a partner

Question 9

LLCS profits?

Answer 9

Based on contribution

Question 10

LLC liability?

Answer 10

Members generally are not personally liable for llc obligations.

Question 11

Taxation on partnerships and LLCs?

Answer 11

passthrough taxation – no entity level tax