Partnership Flashcards
When is a limited partner liable on a contract?
If they participate in the control of the business and the other party reasonably believes that the limited partner is a general partner
What is partnership by estoppel?
A person who represents herself as a partner or consents to being represented by another as a partner is liable to third parties who extend credit to the apparent partnership in reliance on the representation
Feb 2019
What is the effect of a partner’s death on a partnership?
The partner is dissociated from the partnership; however, the dissocation of a partner by death from a partnership at will does not trigger dissolution and winding up of the partnership
Feb 2021
What rights does a deceased partner’s estate have in the partnership absent an agreement to the contrary?
Entitled to have his partnership interest bought-out, meaning a payment of any amount in his partnership account and payment of share of partnership’s value
* The partnership must purchase (buy out) their interest at either liquidation or going-concern value, whichever is greater (share of partnership value)
* Partnership account initially funded by capital contributions–any share of income/losses not distributed are credited to partnership account, and estate entitled to receive full value of partnership account
Feb 2021
What rights does a partner’s estate have to fees collected after the partner’s death?
None–once a partner dissociates from a partnership, he no longer has a right to receive a share of any income acquired after his dissociation
Feb 2021
What expenses is a partner responsible for after his withdrawal?
None except for reasonable costs and expenses incurred in winding up a terminated partnership
Feb 2021
