Partnership

Question 1

A partnership is

Answer 1

An association between two or more persons carrying on as co-owners of a business for profit

Question 2

What is actual authority?

Answer 2

Words or conduct giving rise to authority

Question 3

What is apparent authority?

Answer 3

Principal gives agent appearance of authority

Question 4

What are partners?

Answer 4

agents of partnership for carrying on business in the usual way

Question 5

partnerships are liable for

Answer 5

torts and contracts committed by partners in scope of business

Question 6

Each general partner is personally liable for

Answer 6

all debts and obligations of the partnership and each co-partner’s torts

Question 7

Incoming partners are not liable for prior debts, but

Answer 7

capital paid in may be used to satisfy prior debts

Question 8

Dissociating partners retain liability until

Answer 8

actual notice of disscociation is given to creditors or until 90 days after filing notice of dissociation

Question 9

What is estoppel?

Answer 9

A person who represents to some third party that they are a general partner in a partnership will be liable to that that third party as if they were a general partner in that partnership

Question 10

What is the duty of loyalty?

Answer 10

1) no self-dealing: may not benefit selves at detriment of partnership
2) no usurping partnership opportunities
3) no secret profits at expense of partnership

Question 11

What is an action for an accounting?

Answer 11

1) partnership may recover losses caused by the breach including indemnity
2) the partnership may disgorge by breaching partner

Question 12

What are specific partnership assets?

Answer 12

land, leases, equipment, owned only by the partnership itself, and may not be transferred by partners without parternship authority

Question 13

What are share of profits?

Answer 13

Personal property owned by individual partners

Question 14

Can share of profits be transferred?

Answer 14

yes, because it is owned by individual partners

Question 15

What is share in management?

Answer 15

asset owned only by partnership itself, and may not be transferred by individual partners to third parties

ex: right to vote

Question 16

A general partnership dissolves

Answer 16

upon notice of express will of any one single general partner to dissociate

Question 17

What is the order of priority for winding up partnership buisness after dissolution?

Answer 17

1) all creditors
2) partner’s capital contributions
3) profits shared equally

Question 18

What are the partner’s rights and liabilities during winding up?

Answer 18

1) must receive loans and capital
2) plus share of profits, if any
3) minus share of losses, if any

Question 19

What is a limited partnership?

Answer 19

Partnership with at least one general partner and at least one limited partner

Question 20

What formalities are required for forming a limited partnership?

Answer 20

1) file limied partnership certificate
2) include name of partnership and names of all general partners

Question 21

Who is liable for all limited partnership debts and obligations?

Answer 21

general partners

Question 22

Who has the right to control and manage the limited partnership?

Answer 22

general partners

Question 23

Limited partners are liable to third parties who

Answer 23

reasonably believe the limited partner was a general partner

Question 24

What are the formalities for a registered limited liability partnership?

Answer 24

1) file a statement of qualification
2) file annual reports

Question 25

Who is liable for debts and obligations of a Registered Limited Partnership (RLLP)?

Answer 25

no partner is liable for debts and obligations of partnership, but partners are always liable for own torts