Partnership Flashcards
General partnership created:
When two or more people work as co-owners to run business for profit. (look for share of profits, right to participate in control, sharing losses) mention: no need for subjectively to intend to make partnership
What if no partnership created but want to hold them liable as partners?
partnership by estoppel if they hold themselves out as partners
Voting in GP
Unless otherwise agreed, all partners have equal rights in the management of the business and equal votes; generally require majority vote, anything OUTSIDE of ordinary course of business requires ALL to vote
Right to salary in GP?
No right to salary unless otherwise agreed, just get profits
Liability in Tort in GP
Partnership liable if acting in ordinary course with authority of partnership
Liability in K in GP
Liable for K entered into with actual/apparent authority
Liability of Partners in GP
Each jointly/severally liable for all obligations of partnership but GP resources must be exhausted first
Limiting liability of partners in GP
not binding on third parties but binding b/w partners
Newly admitted partner liability in GP
Only liable for debts AFTER, can lose investment on prior debts but not personally liable
Duties in GP
Duty of Care, Duty of Loyalty, Duty of Disclosure (of any docs requested by partner)
Partnership property in GP
Presumed partnership property if bought by partnership fund, in partnership name, or by partner for the partnership
use of partnership property by partner in GP
CAN ONLY USE for partnership purposes, NOT for personal b/c GP is entity of its own
Admittance of new partner in GP
must have unanimous vote
Dissociation, Dissolution of GP:
Notice, death/bankruptcy/expulsion, agreed-upon event, appointment of a receiver for partner.
At will vs. term partnership
at-will = can leave anytime, can compel dissolution/winding up OR can receive buyout Term = specific thing has to happen/time pass
What happens to debts against a partner who decides to leave? is he still liable?
Partners still liable on them for 2 years unless they give notice, becomes effective 90 days after filing public statement of dissociation or immediately notifying creditor
Other types of partnerships?
Limited partnership, LLP, LLC
LP structure
at least 1 GP, one LP, must file with secretary of state. General Partners are management, LPs have no management rights
Limited Partners in an LP fiduciary duties
owe no fiduciary duty (because they have no control)
LLP formation:
File with secretary of state, partners not liable
LLC formation, management, fiduciary duty
Must file with secretary of state, managed by all members
Fiduciary duty owed is loyalty and care
