Partnership

Question 1

Formation

Answer 1

2+ persons carry on as co-owners of a business for profit (no filing, intent irrelevant) [at will or term]

• factor 1: profits, not gross (unless debt, wages, rent, interest)
• factor 2: control
• Pship by Estoppel: protect TPs - liability for one who olds out as Pship + one who allows it

Question 2

Partnership - Default Profits and Losses

Answer 2

Profits Equal

Losses follow profits

Question 3

Partnership Liability - Tort/K

Answer 3

Tort: P’s torts acting in ordinary course of biz or with authority

K: P’s K’s with authority

• -Apparent Authority BROAD
• -Limit apparent authority only w/r/t real estate by filing St. of Ship Authority in land county

Question 4

P Liability

Answer 4

J+S liable for all partnership obligations after exhaustion

• -can’t limit re 3rd parties, only among selves
• -new P: not personally liable for pre-admission liabilities

Question 5

Partner Fiduciary Duties

Answer 5

P owes Pship and other P’s duties of:

1. Care (Pship statute: gross neg. std.)
2. Loyalty
3. Disclosure (w/ and w/out demand)

Ship Agreement can’t eliminate loyalty or care (can disclosure)

Question 6

Partnership Property

Answer 6

Presumed Pship if (1) acq’d in pship name, (2) pship funds used
[P no interest in Pship property]

Presumed P if P name + P funds + no sign acting for pship

Question 7

Partnership Interest

Answer 7

Mgmt + Financial

• can transfer financial, not management (pick your partners)
• new partner requires unanimous consent of partners

Question 8

Dissociation

Answer 8

withdrawal by express will, death, agreed upon event, etc.

-Wrongful: breach agreement or withdraw before term up

Options: (1) wind up + dissolve, (2) continue + buy out interest

Post-Dissociation: liable for liabilities - and apparent authority continues - for 2 years until creditors notified or file Statement of Dissociation (Eff. after 90 days)

Question 9

Dissolution

Answer 9

At Will PShip: partner dissociating by will can compel dissolution

Term PShip: wrongful or death dissociation just continues on (but dissolves if 1/2 partners agree to do so w/in 90 days)

Question 10

Dissolution $ Priority

Answer 10

1. Outside Creditors
2. Inside Creditors
3. Capital Cont’s
4. Profits/Losses

Contribution: if net loss, partners must cont. in accordance w/ loss shares