Partnership Flashcards
Partnership
2 or more persons associate to carry on as co-owners a business for profit
gross returns, make partners?
revenues of business. No, profits do.
Partnership formation factors
profit sharing
right to participate in control of business
loss sharing
partnership by estoppel
partner liability impound when a party is not a partner in fact
voting default rule
1 partner = 1 vote
Ordinary business matter = majority vote
extraordinary business decision = unanimous vote
(absent agreement)
Profit/loss sharing default
profits shared equally
loss same as profits
Tort liability?
Yes if within the scopeC
Contract liability
Yes if actual or apparent liability
New partner? (vote)
unanimous!
partners are held? (damages)
jointly and severally liable.
duty of loyalty
utmost fairness
- account to partnership for any benefit
- no taking adverse positions
- no competing with partnership
duty of care
not grossly negligent or reckless conduct
(ordinary negligence excused)
Which duty can be eliminated
duty of disclosure
partnership property
if for partnership or indicates acting for partnership
presumed partnership prop if using partnership funds.
Is a partner a co-owner of partnership property?
NO
