Partnership Changes and Termination Flashcards
What is required to convert P to a limited partnership?
How does this impact a partner’s liability?
The conversion must be approved by all of the partners of the P, and the P must file the articles of conversion with the state.
Former general partners remain liable for pre-conversion obligations.
What Is required to convert a limited partnership (LP) to a P?
How does this impact a partner’s liability?
The conversion must be approved by all of the general and limited partners, AND the LP must cancel its LP certificate.
Partners remain liable as limited partners for pre-conversion LP obligations and are liable as general partners for post-conversion P obligations.
What effect does conversion have on the P?
-> parties
-> obligations
-> property
All parties other than the surviving entity cease to exist.
All property and obligations of the original entities become that of the surviving entity.
What is a P at will?
When does a P at will terminate?
It’s an open-ended P with no fixed termination.
Dissolved when a dissociating partner gives notice of withdrawal.
When does a P for a term or undertaking terminate?
Dissolved when
-> the term expires or the undertaking is completed
-> all partners agree to dissolve the P
OR
-> a partner is dissociated due to death, bankruptcy, or other event AND at least half of the remaining partners agree to dissolve the P within 90 days
How does any P terminate?
Dissolved upon
-> the occurrence of an event agreed to into the PA
-> an event that makes it unlawful for P business to be continued
OR
-> a judicial termination
What may a person winding up the P do?
A person winding up the P business may
-> dispose of and transfer P property and discharge the P’s liabilities
-> distribute P assets to settle the partners’ accounts
After a dissolution what is the P bound by?
After dissolution the P is bound by
-> a partner’s act that is appropriate for winding up the P
AND
-> as well as any act undertaken by a partner that would have bound the P before dissolution, IF the other party does not have notice of the dissolution
Is each partner liable to the other partners for his share of P liability?
Yes
Who has priority over P’s assets between creditors and partners?
Creditors
Before winding up is complete, can a P resume carrying on its business as if dissolution had never occurred?
Yes
-> continuation of P after dissolution is allowed
