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UBE Essay Subjects > Partnership > Flashcards

Partnership Flashcards

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1
Q

General Partnership

Formation

A

Association of two or more persons to carry on as co-oqners of a business for profit.

subjective intent irrelevant

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2
Q

General Partnership

Factors for whether partnership exists

A
  1. sharing of profits – presumption
    — reubttable with evidence of lack of co-ownership like no right to control or no sharing of losses
  2. Right to participate in control
  3. Title/Property held in joint tenancy or in common
  4. Venture requires extensive activity
  5. Sharing of gross returns
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3
Q

General Partnership

Partnership by Estoppel

A

Person by words or conduct represents himself as a partner or consents to being represented as one, liable to third parties who extend credit in reliance on the representation

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4
Q

General Partnership

Voting

A

Equal rights, unless agreed otherwise.
- majority vote for ordinary course of business
- unanimous consent of all for matters outside

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5
Q

General Partnership

Profits

A

Assumption – equally among partners by number.

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6
Q

General Partnership

Losses

A

Shared the same way as profits.

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7
Q

General Partnership

Statement of Partnership Authority

A

Filed with Secretary of State
- grants/restrictions on partner auhtority to transfer real property are binding on third parties if recorded in county where property located
- - binding on partnership unless third party had actual knowledge of lack of authority for grants filed, not restrictions if not real property.

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8
Q

General Partnership

RUPA – Apparent Authority

A

Partner has apparent authority to bind to transactions within the ordinary course of the partnership’s business or business of the kind carried out by the partnership.

Not bound if person knew of or received notification of the lack of auth

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9
Q

General Partnership

Liability of Partners

A

Jointly and severally liable for all obligations of the partnership. Must exhaust partnership assets/funds before reaching partners’.

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10
Q

General Partnership

Fiduciary Duties

A
  1. Duty of Loyalty – must account to partnership for any befit derived by partner, refrain from dealing with partnership as party with adverse interest, and refrain from competing with partnership in business.
  2. Duty of Care – grossly negligent or reckless conduct
  3. Duty of Disclosure – to provide complete and accurate information concerning the partnership (RUPA says without demand if conerns affairs reasonably required for proper exercise of partner’s rights and duties
  4. Duty of obedience
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11
Q

General Partnership

Property

A
  • Partnership’s if purchased with partnership’s funds regardless of name (presumed)
  • Rebuttably partner’s if (1) held in name of one or more partners, (2) no sign they’re acting for a partnership, and (3) partnership funds not used.
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12
Q

General Partnership

Ownership Interest

A

Called partnership interest and is personal property of partners

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13
Q
A
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14
Q

General Partnership

Transfers

A
  1. Cannot transfer management rights, must make unanimous vote to add new partner
  2. Can transfer financial rights
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15
Q

General Partnership

Dissociation Events

A
  1. oral or written notice of voluntary dissociation
  2. happening of agreed event
  3. valid expulsion
  4. partner’s bankruptcy
  5. partner’s death or incapacity to perform duties
  6. decision of a court that incapable of performing duties
  7. termination of a business entity that is a partner
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16
Q

General Partnership

Wrongful Dissociation

A
  1. Breach of express terms of PA
  2. Before end of Term Partnership

Liable for damages caused by dissociation

17
Q

General Partnership

Consequences of Dissociation

A
  1. partnership dissolved and business must be wound up
  2. Partnership continues and dissociated partner entitled to a buyout of interest
18
Q

General Partnership

Dissolution

A
  1. Where partner dissociates by express-will in an at-will partnership
  2. In a term partnership, one dissociates wrongfully or because or death or bankruptcy, required only if on-half of remaining agree to wind-up within 90 days.
  3. Event agreed to in partnership agreement
  4. event making it unlawful
  5. judicial decree on application by partner that economic purpose likely frustrateed, partnered engaged in conduct making it not reasonable to carry on or business cannot practically be carried on
  6. judicial decree by trensferee of interest that it is equitable to wind up
  7. 90 consecutive days without at least two partners
19
Q

General Partnership

Liability After Dissociation

A

Can be liable for two-yers after if:
1. other party reasonably believed partner was still a partner when entering the transaction; and
2. did not have notice of the partner’s dissociation

20
Q

General Partnership

Dissolution Process

A

Winding up:
1. assets applied to liabilities (individual partners may be required to “pay in” if not sufficient)
- first, creditors (outside and inside - partners who loaned)
- second, capital contributions paid by partners
2. If excess, distributed to partners according to profit shares.

21
Q

General Partnership

Notice of Dissolution

A

Filed with secretary of state, after notice filed all persons deemed to have knowledge after 90 days.

22
Q

Limited Partnership

Definition

A

At least on general partner and at least one limited partner.

23
Q

Limited Partnership

Creation

A

Must file a certificate of limited partnership, signed by all general partners
- name of partnership, names and addresses of agent for service of process, and names and addresses of each general partner

24
Q

Limited Partnership

Limited Partner - Voting

A

Only when:
1. amending partnership agreement
2. converting partnership to limited liability limited partnership
3. disposing of all or substantially of property
4. admititng a new partner
5. compromising a partner’s obligation to make a contribution or to return an improper distribution.

25
Q

Limited Partnership

Distributions

A

In accordance with with partners’ contributions

26
Q

Limited Partnership

Liability

A

General partners, jointly and severally liable.
Limited partners - not personally liable for obligation of LP, only lose value of investment

27
Q

Limited Partnership

Fiduciary Duties

A

GPs – owed to the LP and other partners
LPs – none owed to partnership or other partners.

28
Q

LLC

Formation

A

Filing a certificate of organization with the secretary of state.

need at least one member

29
Q

LLC

Certificate of Organization contents

A
  1. name of the LLC
  2. registered office
  3. registered agent
30
Q

LLC

Management

A
  • presumed to be member managed (by all)
  • Manger-managed can be specified in operating agreement
31
Q

LLC

Distributions

A

Profts/losses not specified but distributions must be made in equal shares unless specified otherwise.
– Most states say allocated on basis of contributions.

32
Q

LLC

Liability

A

Members and Managers, not personally liable for LLC obligations.

May pierce veil to reach personal assets like in corporations

33
Q

LLC

Dissolution

A
  1. event or circumstance specified in OA
  2. consent of all the members; or
  3. passage of 90 days with no members
34
Q

LLC

Judicial Dissolution

A
  1. all of LLC’s activities unlawful
  2. not reasonably practicable to carry on the company’s activities
  3. illegal or fraudulent conduct by controlling members
  4. oppressive or will be directly harmful to member applying

Member applies for

35
Q

LLC

Taxation

A

“Pass-through” basis. No entity -level tax and instead income if reported by individual owners on their tax returns.

UBE Essay Subjects (3 decks)

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