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Bar Studying - Non-MBE Subjects > Partnership > Flashcards

Partnership Flashcards

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1
Q

There _______ formalities to form a general partnership.

A

are no. This is the default rule of business forms.

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2
Q

A general partnership is defined as

A

an association of two or more persons who are carrying on as co-owners of a business for profit.

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3
Q

_________ is the key factor in determining whether a general partnership exists.

A

Sharing profits

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4
Q

The contribution of money, capital, or services, in return for a share of profits creates

A

a presumption that a general partnership exists.

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5
Q

Partners are _______ of the partnership for apparently ________ usual partnership _______.

A

agents; carrying on; business.

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6
Q

The general partnership _______ liable for each partner’s torts committed in the ______ of partnership business and for each partner’s _______ contracts.

A

is; scope; authorized.

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7
Q

Each general partner ________ liable for all ________ of the partnership and each co-partner’s _______.

A

is PERSONALLY; debts; torts.

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8
Q

A brand new incoming partner is generally _______ liable for pre-existing debts, but any money paid into the partnership by said partner ____________.

A

not; can be used to satisfy those prior debts.

**But still no direct, out of pocket liability.

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9
Q

A disassociating partner _______ liability on all future debts until _____________ or ____________.

A

retain; actual notice on disassociation is given to creditors or until 90 days after filing a notice of disassociation with the state.

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10
Q

Under ________________, one who represents to a third party that a general partnership exists will be _______ as if a general partnership exists.

A

general partnership by estoppel; liable.

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11
Q

As a rule, general partner’s are ________ liable for all obligations of the partnership, including each co-partner’s _________.

A

personally; torts committed within the scope of the partnership.

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12
Q

General partners are ________ towards each other.

A

fiduciaries.

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13
Q

General partners owe the three basic duties of

A

(1) loyalty
(2) to not usurping partnership opportunity
(3) to not make secret profits

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14
Q

When a general partnership sues a general partner for breach a duty it is called

A

an action for accounting.

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15
Q

A general partnership may recover from a breaching partner

A

(1) losses caused by the breach; and

(2) disgorge profits made from the breach

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16
Q

The three kinds of partnership property are

A

specific partnership assets

(2) share of profits

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17
Q

“Specific partnership assets” typically include __________ owned by the _____________.

A

land, leases, or equipment; partnership

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18
Q

“Specific partnership assets” _______ be transferred by individual partners without ___________.

A

may not; general partnership authority

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19
Q

“She of profits” constitutes ______ property owned by each partner.

A

personal

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20
Q

Share of profits _______ transferred by individual partners to ________

A

may be; third parties.

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21
Q

Share in the management is an ______ owned only by the __________.

A

asset; partnership itself.

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22
Q

Share in management _______ transferred by individual partners to __________.

A

may not be; third parties

23
Q

In a close case, the difference between a partnership property and personal property is determined by

A

whose money was used to buy the property.

24
Q

Absent an agreement, each partner is entitled to ________ control of the partnership.

A

equal

**Don’t be thrown off by asymmetric profit sharing, control agreements are wholly separate.

25
Q

The control of ordinary matters require a ________ vote, but fundamental matters require ___________.

A

majority; unanimous consent.

26
Q

Absent an agreement, partners get _____ salary.

A

no

27
Q

Even though partners by default do not get a salary, they do get compensated for

A

helping to “wind up” the partnership businesses.

28
Q

Absent an agreement, profits are shared ______.

A

equally

29
Q

Absent an agreement, losses are shared _________.

A

like profits.

30
Q

Absent an agreement that sets forth the events of dissolution, a general partnership dissolves upon

A

notice of express will of any SINGLE general partner to disassociate.

31
Q

“Winding up” is the period between ________ during which the remaining partners

A

dissolution and termination; liquidate partnership assets to satisfy partnership creditors.

32
Q

Determining liability on contracts entered into during winding up, you must distinguish between

A

old business and new business.

33
Q

For old business, the partnership and its individual general partners are liable on _____ transactions entered into to wind up old business transactions to satisfy

A

all; creditors who existed when winding up began.

34
Q

The partnership and its individual general partners ______ liability on new business transactions during winding up until ______________.

A

retain;

(1) notice of dissolution is given to creditors; or
(2) 90 days after filing with the state a Statement of Dissolution

35
Q

The “priority of distribution” on dissolution is

A

(1) all creditors fully
(2) capital contributions fully
(3) leftover profits

36
Q

Creditors with respect to priority of distribution are both all ______ trade creditors and all ____________.

A

outside; inside partners who have loaned money to the partnership and become creditors thereby.

37
Q

“Capital contributions” are

A

money paid in for a share of profits, NOT as a loan.

38
Q

The partnership and its individual general partners are liable to their own partners for the ______ repayment of their _______ contribution

A

full; capital.

39
Q

If there are leftover profits after paying off creditors and capital contributions, they are shared _______ without an agreement, otherwise they are shared

A

equally; according to the agreement.

40
Q

Each individual general partner during winding up is liable for

A

his or her share of losses.

41
Q

Each general partner during winding up must receive any loans and capital, plus their share of profits if there are any, minus their share of losses.

A

That’s it!

42
Q

A “limited partnership” is defined as a

A

a partnership with at least one general partner and at least one limited partner.

43
Q

The requirements to form a limited partnership are

A

(1) file a limited partnership certificate with the state

(2) that includes the names of all GENERAL partners

44
Q

General partners ______ liable for all limited partnership obligations.

A

liable.

45
Q

General partners _______ the right to manage and control the business.

A

have

46
Q

Limited partners have _______ liability and are _______ liable for the _____ and _______ of the partnership

A

limited

47
Q

Although the law in most states is that limited partners ______ manage, under the newly revised Uniform Limited Partnership Act, limited partners _______ manage without forfeiting their __________.

A

cannot; may; limited liability.

48
Q

A registered limited liability partnership is formed by

A

(1) registering with the state a statement of qualification;

(2) plus annual reports.

49
Q

For a registered limited liability partnership, _____ partner is liable for the debts and obligations of a registered limited liability partnership.

A

no.

50
Q

A limited liability company (LLC) is defined as a

A

hybrid between a corporation and partnership in which the owners, called members, have the same rights and limited liabilities of shareholders in a corporation and the benefits of tax treatment of a partnership.

51
Q

A limited liability company (LLC) is formed by

A

(1) filing articles of organization;

(2) may adopt an operating agreement

52
Q

The members/owners of an LLC ____ manage the business or _______ the control to a team who behaves just like a ______ of a corporation.

A

may; delegate; board of directors.

53
Q

A full membership interest in an LLC may not be transferred without

A

(1) the unanimous consent of other members; or

(2) as provided for in the operating agreement

54
Q

LLCs equal the four “limiteds”, which are

A

(1) limited liability
(2) limited liquidity
(3) limited life
(4) limited tax

Bar Studying - Non-MBE Subjects (9 decks)

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