Partnership

Question 1

Formation of a General Partnership

Answer 1

A partnership is the association of two or more persons to carry on as co owners, a business for profit whether or not they intended to form a partnership.

Question 2

Profit Sharing

Answer 2

profit sharing creates a presumption that a person is a partner unless the profits were received in payment of debt, rent to landlord, wages, etc.

Question 3

Managing Affairs

Answer 3

partners have equal right in managing ordinary affairs. A majority vote wins if there is a disagreement and extraordinary matters require unanimous vote.

Question 4

Disagreements require:

Answer 4

a majority vote if an ordinary affair but unanimous for affairs outside of the ordinary course of business.

Question 5

Liability

Answer 5

partners are jointly and severally liable.

Question 6

An incoming partner and Debts

Answer 6

is not liable for prior debts.

Question 7

Outgoing Partner and Debts

Answer 7

an outgoing partner is liable for debts during his partnership.

Question 8

Fiduciary Duties

Answer 8

partners are in a fiduciary relationship with one another and must act in good faith, duty of care, duty of loyalty, and the duty to account.

Question 9

Dissolution

Answer 9

Unless it has been agreed upon, GP Dissolution occurs when:
1. Withdraw of a partner (disassociation);
2. Occurrence of a agreed upon event;
3. Business becomes illegal
4. Judicial Dissolution

Question 10

Winding Up

Answer 10

This where partnerships assets are liquidated and creditors are paid. Partners are still liable for any liabilities that occur during the winding up phase.

Question 11

Termination

Answer 11

true end of partnership

Question 12

If a creditor has a claim against a partner, the creditor can obtain:

Answer 12

an interest in the partnership. This includes profits but not management or voting rights.

Question 13

Limited partnership (LP):

Answer 13

• At least one general partner must be listed on the certificate filed with the
  state. Limited partners have limited liability (limited to their capital contributions).

-General partners are liable for all partnership obligations and manage control of the business.

Question 14

Limited liability partnership (LLP):

Answer 14

no partner is personally liable for the obligations of the partnership (but partners are liable for their personal torts).

Question 15

If a general partnership converts into an LLP, then:

Answer 15

partners remain jointly and severally liable for actions that took place before the conversion.