Partnership Changes and Termination Flashcards
What is conversion?
A partnership is converted into one or more partnerships or limited partnerships.
What is required for a conversion from a partnership to a limited partnership?
- unanimous consent of partners unless partnership agreement specifies otherwise
- file articles of conversion with the state
What is the liability for a partner of a partnership that has converted to a limited partnership?
- liable for any obligation incurred before the conversion
- any obligation incurred w/in 90 days of the conversion if another party to the transaction reasonably believed the general partner was a limited partner.
What is required for a conversion from a limited partnership to a regular partnership?
1) Unless contrary provision in partnership agreement, unanimous approval.
2) Cancelation of certificate of limited partnership
Liability of a former limited partner is:
What you would expect.
What is required for a plan of merger?
1) name of all the parties to merger
2) name of surviving entity
3) type of surviving entity
4) terms of merger
5) manner of converting interests
6) street address of surviving entity’s office.
What approval is required if a limited partnership is a party to a merger?
1) vote required by the jurisidiction in which the partnership is
2) all partners or whoever required in partnership agmt.
What is the date when a merger is effective?
Later of: approval of necessary parties, filing of all required document or any date specified in plan of merger.
What are the stepsin terminating a partnership?
1) Dissolution
2) Winding up
When is a partnership at will dissolved?
When a partner chooses to dissociate.
How is a partnership for a term or undertaking dissolved?
1) Term or undertaking ends
2) All partners agree to dissolve partnership, or
3) A partner is dissociated due to death, bankruptcy, or other circumstances and w/in 90 days half the remaining partners agree to dissolve.
When will any partnership be dissolved?
1) Dissolving event in the partnership agreement
2) An event that makes it unlawful for substantially all of the partnership business to occur if not cured w/in 90 days
3) Judicial determination that the economic purpose of the partnership is likely to be unreasonably frustrated
4) Judicial determination sought by a transferee of a partnership interest that finds it is equitable to wind up the business after expiration of term or undertaking.
What is the power of the person winding up the partnership?
to dispose of partnership property an discharge the liabilities.
- may preserve the partnership business for a reasonable time to maximize value
What is a statement of dissolution?
- a partner may file a statement of dissolution
- gives limitation on partners authority giving third parties notice of the dissolution 90 days after its filed.
How are a partnership’s assets distributed in dissolution?
1) First to creditors and partners who are creditors
2) then to partners’s accounts. Any partner with a negative balance must pay in. then the accounts are distributed.
