Partnership

Question 1

General partnership definition

Answer 1

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

Question 2

Voting

Answer 2

Absent an agreement each party gets one vote

Question 3

Salary

Answer 3

Absent an agreement partners get no salary other than for winding up the business

Question 4

Profits

Answer 4

absent an agreement Profits are shared equally

Question 5

Losses

Answer 5

Absent an agreement losses are shared like profits.

Question 6

Formation

Answer 6

There are no formalities to becoming a general partnership. Will be deemed by law as a general partnership by conduct alone.

Question 7

Liability

Answer 7

each partner is personally liable for all debts and obligations and contracts entered into or torts committed within the scope of the partnership by partners

Question 8

Incoming partners liability for past debts

Answer 8

there’s no direct personal liability for past debts but if an incoming partner contributes money or capital to the partnership the partnership can use that money to pay off past debts.

Question 9

Dissociating partner liability on future debts

Answer 9

I dissociating partner is liable for future debts until actual notice of dissociation is given to creditors or until 90 days after filing of notice of disassociation with the state.

Question 10

General partnership by estoppel

Answer 10

a person who represents to a third party that they are a partner in a partnership is liable to the third party as if they were a partner even if they are not.

Question 11

Rights and liabilities of each partner to each other

Answer 11

Partners are fiduciaries to each other and the general partnership as such they have a duty of loyalty. May never engaged in self-dealing
May never usurp partnership opportunities
May never make secret undisclosed profits at the expense of the partnership.

Question 12

Remedies for wrong doings of one partner buy another.

Answer 12

An action for an accounting:

the partner May recover losses caused by the breach and may disgorge profits made by the breacher as well

Question 13

Partnership property owned by the partnership

Answer 13

Land leases and equipment. These assets may not be transferred by an individual partner without partnership authority.

Question 14

Partnership property: share and management of the partnership.

Answer 14

Owned by the partnership. No individual partner May freely transfer their share of management to a third party.

Question 15

Partnership property: share of the profits if any.

Answer 15

Share of the profits is personal property owned by the individual partner and may be transferred freely.

Question 16

Partnership property tiebreaking rule

Answer 16

Whose money was used to buy the property.

Question 17

Dissolution at will

Answer 17

An at will partnership, where there is no agreement, the partnership will be dissolved upon the express will of any single partner to disassociate.

Question 18

Dissolution not at will

Answer 18

The partnership will be dissolved according to the terms of the agreement, or if any single partner disassociate and, the remaining partners by majority vote, vote to dissolve within 90 days of the partner leaving.

Question 19

Winding up

Answer 19

winding up is a. Between dissolution and termination, in which the remaining partners liquidate the assets to satisfy the creditors.

Question 20

Winding up compensation

Answer 20

Partners will receive a salary for helping wind-up the business.

Question 21

Disassociation liability: liability to old creditors

Answer 21

The partnership and therefore each individual partner are still liable on transactions entered into to wind up the business with existing creditors during the wind up phase.

Question 22

Dissolution liability: new business

Answer 22

The partnership and therefore each individual partner is liable for new business until actual notice of dissolution is given to creditors or, 90 days after filing a statement of dissolution with the state

Question 23

Liquidation funds

Answer 23

Go to creditors first: all outside and inside creditors
Then to capital contributions by partners
Then profits and surplus if any are shared equally among the partners in absence of an agresement.

Question 24

Terminations

Answer 24

The real end of the partnership

Question 25

Limited partnership

Answer 25

A partner with at least one general partner and one limited partner.

Question 26

Limited partnership formation

Answer 26

Must file with the state a limited partnership certificate including the name of all general partners.

Question 27

Limited partnership liability

Answer 27

General partners: the same personal liability as a general partnership. They also have substantial managerial control.

Limited partners: not liable for debts and obligations must pay full consideration for their interest. Limited control: may not assert managerial control

Question 28

Limited liability partnership formation

Answer 28

Must register with the state a statement of qualification and submit annual reports.

Question 29

Limited liability partnership liability

Answer 29

No partner is personally liable for debts or obligations.