Partnership Formation Flashcards
What is a partnership?
An association of two or more persons to carry on as co-owners of a business for profit
A partnership can include individuals, associations, and corporations.
What is the requirement for forming a general partnership?
An objective agreement between two or more persons to co-own an ongoing business for profit
This agreement can be made expressly or implicitly.
What evidence is generally treated as prima facie evidence that a partnership exists?
The sharing of profits
A person receiving a share of the profits is presumed to be a partner.
What types of payments are NOT considered a sharing of profits?
- Receiving payment of a loan
- Collecting rent
- Earning a salary
What is the significance of sharing profits in relation to partnership formation?
While sharing profits presumes partnership, it can be rebutted with evidence of loss sharing or management not being shared.
What is required for the formation of a limited partnership under ULPA?
Filing a certificate of limited partnership with the secretary of state’s office
This requires compliance with statutory requirements.
What must be included in the name of a limited partnership?
The phrase ‘limited partnership’ or the abbreviation ‘L.P.’ or ‘LP’
What happens if a limited partnership formation fails?
The parties have likely formed or continued as a general partnership.
Who is eligible to become a limited liability partnership?
General partnerships—but not limited partnerships.
What is required for a general partnership to convert to a limited liability partnership?
A majority vote of the partners holding interest in the partnership.
What must a partnership file to become a registered limited liability partnership?
A completed registration executed by at least one partner and payment of the required fee.
Does the filing of a statement of qualification create a new partnership?
No, it does not create a ‘new’ partnership.
What must the name of a registered limited liability partnership contain?
- ‘Registered Limited Liability Partnership’
- ‘Limited Liability Partnership’
- ‘R.L.L.P.’
- ‘RLLP’
- ‘L.L.P.’
- ‘LLP’
What is the implication of a failed attempt to form a limited liability partnership?
The parties have likely formed or continued as a general partnership.
