Partnership Flashcards
General Partnership
Consists of two or more general partners
Formation Requirements
- formed by an objective agreement between parties. Either expressly or implicitly
Proof of Association
-the sharing of profits is treated by agreement.
Limited Partnerships
Filing Requirements; to be effective under ULPA, a cert must be signed by all parties and filed
Limited Liability Partnerships
GP are eligible to become a LLP
Converting GP to LLP; Must be a vote by all parties and recreation of the agreement
Registering LLP; a P must comply with the statutory requirements as well as pay the filing fee
Partnership Agreements
General rule; relations among the partners and between the partners and partnerships are governed by the partnership agreement or, when the partnership agreement does not otherwise provide by the UPA
Conducting Partnership Business
Rights of General Partners;
(1) each GP has equal right to manage or conduct the business
(2) each GP is an agent of the partnership
(3) if taken outside the ordinary course of the partnership, the actions constitutes partnership buisiness conducted on the partnership’s behalf ONLY IF ALL GP consent
Rights of Limited Partners
Do not have right to co-manage
are not authorized agents
Have the right to seek information related to interest as LP
Duties within the Partnership
Duty of Care; must not compete, self-dealing, misappropriate
Duty to Disclose; (1) To GP; both partners have duty to furnish partner without demand (2) to LP; LPs have a right to inspect, records
Profits, Losses, and Contributions
Absent agreement to contrary;
-each partner is entitled to share equally in the profits generated and partners share losses proportionate to their share
Partners’ Personal Property Distinguished from Partnership Property
- A Partner’s personal property includes his partnership interest which consists of;
- his financial interest in his share of the partnership’s profits and losses AND
-his right to receive distributions from the partnership
Partners may transfer interest though transferee is entitled to disbursements on distributions that the transferring partner would otherwise have been entiteld. Transferee has no right to participate in management and control
Liability to Third-Parties
GP; all partners are jointly liable for obligations of partnership
LP; NOT personally liable for obligations of partnership
LLP
Obligations incurred while the partnership is LLP are solely the obligation of the partnership
General Partner Dissociation
Partner’s Power to Dissociate;
-Voluntary relationship, all partners have right to withdraw
-notice required
-not permitted if it is a wrongful dissociation
Limited Partnership Dissociation
GP withdraws from a LP by express will
Consequences of Dissociation
-Terminates a partner’s right to co-manage and conduct partnership business
-Except with respect to events or matters occurring before dissociation also terminates a partner’s duty of loyalty and care
-A Partner who has dissociated is permitted to compete
- Does NOT discharge liability for Partnership
-The Partnership must purchase the interest for buyout price
Causes of Partnership’s Dissolution
Causes Applicable to Partnerships Generally;
-Individual Partner may file an application with a court to have partnership dissolved
- An application to dissolve a partnership will be granted IF
–economic purpose is unreasonably frustrated
–carrying on business would not be reasonably practicable
–the carrying on of the business is no longer reasonably practicable
