Partnership MEE Rules

Question 1

Partnership formation

Answer 1

A partnership is the association of two or more persons to carry on as co-owners, a business for profit, whether or not the person intended to form the partnership

Question 2

Profit sharing

Answer 2

Creates a presumption that a person is a partner unless the profits were received in payment of a debt, rent to landlord, wages, etc.

Question 3

Partner management rights

Answer 3

Partners have equal rights to co-manage ordinary affairs, a majority vote wins if there is a disagreement

Question 4

Extraordinary matters

Answer 4

Require unanimous vote among partners

Question 5

General partnership

Answer 5

Partners are jointly and severally liable for partnership debts

Question 6

Partner fiduciary duties

Answer 6

-Duty of loyalty (may not take opportunities from corp. for personal gain, no self dealing, etc.)
-Duty of care
-Duty to account (must account for any profits)

Question 7

Dissolution

Answer 7

Does not end a partnership, only once winding up is complete.

Question 8

Steps to end a partnership

Answer 8

(1) dissociation (change in relationship of partners), (2) winding up (partnership assets are liquidated and credits paid), (3) termination (true end of partnership)

Question 9

Limited Liability Partnership (LLP)

Answer 9

No partner is personally liable for the obligations of the partnership but are liable for their personal torts.

Question 10

Limited Partnership (LP)

Answer 10

At least one partner must be listed on cert. filed w/state. Limited parters = limited liability, general partners = liable for all partnership obligations and manage control of business.

Question 11

Dissolution priority

Answer 11

1st - pay non-partner creditors and inside Ps who loaned $
2nd - capital contributions by P
Remainder of profits shared equally, losses shared equally also