Partnerships 1-5

Question 1

When is a General Partnership created?

Answer 1

When:

Two or more persons;

As co-owners;

Carry on a business for profit.

*No written agreement or subjective intent is required.

Priority: HIGH

Question 2

When is a Partnership presumed?

Answer 2

When there is an agreement to share profits equally.

Absent an agreement:

Each partner has an equal vote;

Profits are shared equally; and

Losses are shared the same as profits.

Priority: HIGH

Question 3

A Limited Liability Partnership (LLP) is where all partners have limited personal liability.

Any partnership may become an LLP upon what two events?

Answer 3

Approval by the same vote that is necessary to amend the partnership agreement; AND

By filing a Statement of Qualification with the Secretary of State.

*Unless otherwise agreed, a unanimous vote is required to amend a partnership agreement.

Priority: Medium

Question 4

What information must a

Statement of Qualification include?

Answer 4

The name and address of the partnership;

A statement that the partnership elects to become an LLP; AND

A deferred effective date (if any).

*The filing DOES NOT create a new partnership; it continues to be the same entity that existed prior to the filing.

Priority: Medium

Question 5

What does the court consider to determine whether two businesses are separate entities rather then a partnership?

Answer 5

Whether the business:

Operates under a separate name;

Keeps the files of the business in a separate room;

Uses the same office staff;

Has contributed money to the other person/entity;

Intends to share the profits; AND

Pays rent for a separate office.

Priority: Low