Partnerships Flashcards
In an LP, a GP has the ____ legal rights and responsibilites as partners in a GP
Same
In an LP, a LP (is/is not) personally liable for debts/to creditors of the limited partnership and have no rights in the management of the LP
Is not
Much like with the Partnership Agreement, the Limited Partnership _____ controls instead of the defaults on most matters.
Agreement
Limited Partners can be given certain management rights by the ______, but cannot be assigned liability alone by the agreement
Limited Partners can be given certain management rights by the LP Agreement, but cannot be assigned liability alone by the agreement
`
T/F
Management rigths caannot lead to liability
False
A _____ cannot exist without being properly formed under state law.
Limited Partnerships
To form a Limited Partnership
All of the _____ must execute a certificate of limited partnership and file it in the _____. Effective on date and at time of filing.
General Partners
Office of the Secretary of State.
Taxed Similarly to Partnership, limited partners (do/do notpay tax) on their share of income earned by the LP
Do
Gaps in an LP agreement can be filled by _____
Limited/General Partnership statutes, depending on whose conduct is in question
Assignee of GP’s partnership interest may become a limited partner as provided in the LPship Agreement or upon ______
affirmative vote/consent of all partners.
Fiduciary duties can be eliminated by the Agreement EXCEPT for _______
the duty of good faith and fair-dealing
If sole GP or LP withdraw from LP, a successor to those positions must be ______ within a time frame determined by the statutes
elected or admitted
What are the LLC terms?
Members
Transferee
Operating Agreement
Manager/Company Official
In an LLC, an _____ governs operations but is not required
operating agreement
Under RULLCA 108, an LLC is distinct from its _____
members
Under RULLCA 108, an LLC may have any ___ purpose
lawful
Under RULLCA 108, an LLC has ___ duration
perpetual
In an LLC, Members, managers, transferees, company officials (are/are not) personally liable for the company’s debts and obligaton
Are not
What is the default management structure for an LLC?
Member-managed
What are the 4 requirements to form a partnership?
I. Will. Love. Running.
- Intent—two persons must intend to carry on a business for profit as co-owners but do not
need the specific intent to form a P; may be implied by the parties’ conduct - Written agreement not required—an oral agreement is sufficient
- Legality—purpose of P must be legal
- Rules for determining the existence of a P
T/F
A partner may enter into contracts with third parties on behalf of P
True
If there is no agreement or the agreement is silent on the terms, the partners share profits ____
equally
Partners must contribute to the partnership’s ___ according to each partner’s share in the profits
losses
Aan LLP partner (is/is not) personally liable for the
debts/obligations of the LLP that arise from the negligent or wrongful acts of other
partners/agents, regardless of whether the obligation is based in contract or tort
Is not
A partner (is/is not) liable for own personal misconduct
is
In an LP, a partner’s liability for her debts is ___ to her capital contribution to the LP
Limited
In an LP, a partner (is / is not) personally liable to third parties for obligations of LP
Is
Limited and GP can contribute cash, property, or services, and (are / are not)
obligated to the LP with respect to any written, enforceable promise of a future contribution
Are
T/F
A limited partner has the right to bring a derivative action on behalf of LP
True, however, they must first make an effort to cause general partner to bring an action.
The ____ is a written agreement that sets forth each partner’s rights and obligations with respect to the partnership
articles of partnership
A ___ is the The basic document filed with a designated state official by which a limited partnership is formed.
Certificate of limited partnership
A ___ is an order granted by a court to a judgment creditor that entitles the creditor to attach profits or assets of a partner on dissolution of the partnership.
charging order
____ is he severance of the relationship between a partner and a partnership when the partner ceases to be associated with the carrying on of the partnership business.
dissociation
In a limited partnership , the __ __ is a partner who assumes responsibility for the management of the partnership and liability for all partnership debts.
General Partner
In partnership law, ______ allows a plaintiff to sue, and collect a judgment from, one or more of the partners separately (severally, or individually) or all of the partners together (jointly). This is true even if one of the partners sued did not participate in, ratify, or know about whatever gave rise to the cause of action.
Joint and Several Liability
A ____ is a form of partnership that allows professionals to enjoy the tax benefits of a partnership while limiting their personal liability for the malpractice of other partners.
limited liability partnership
In a limited partnership, a _____ is a partner who contributes capital to the partnership but has no right to participate in the management and operation of the business. The limited partner assumes no liability for partnership debts beyond the capital contribute
limited partner
A ____ is a partnership consisting of one or more general partners (who manage the business and are liable to the full extent of their personal assets for debts of the partnership) and one or more limited partners (who contribute only assets and are liable only to the extent of their contributions)
limited partnership
A ____ is a judicially created partnership that may, at the court’s discretion, be imposed for purposes of fairness. The court can prevent those who present themselves as partners (but who are not) from escaping liability if a third person relies on an alleged partnership in good faith and is harmed as a result.
partnership by estoppel
A partnership is formed when ____ or more people agree to carry on a ____ as co-owner for ___
two
business
profit
No specific formalities are required to form a ____
partnership
The default partnership is a ____ partnership where all partners are ___ for their liabilities of the partnership
general
liable
In a GP, the ___ act as __ for the partnership liabilities
partners
guarantors
A partnership needs words indicating that a business entity was formed, such as ___
limlited partnership, LP, LLC, Inc.
A ___ is liable for tort committed by a partner within the scope of his partnership
partnership
Is a partnership liable for the torts committed by the partners?
Yes, if they are acting within the scope of their partnership. I.e an author writes a defamatory article.
In a GP, all partners are ___ if the partnership assets are ___ to meet their liabilities
liable
insufficient
What happens if the partnership assets are insufficient to pay its liabilities?
The partners are liable are would be required to pay out of their own assets.
T/F
All partners are agents of a partnership and generally authorized to act on behalf of the partnership
True
A partnership needs words indicating that a business entity was formed, such as ___
limlited partnership, LP, LLC, Inc.
A ___ is liable for tort committed by a partner within the scope of his partnership
partner
Is a partnership liable for the torts committed by the partners?
Yes, if they are acting within the scope of their partnership. I.e an author writes a defamatory article.
In a GP, all partners are ___ if the partnership assets are ___ to meet their liabilities
liable
insufficient
What happens if the partnership assets are insufficient to pay its liabilities?
The partners are liable are would be required to pay out of their own assets.
T/F
All partners are agents of a partnership and generally authorized to act on behalf of the partnership
True
The formation of a GP only requires the ___ form a partnership, however, in an LP, LLC, and a corp., documents need to filed with the ___
intent
SOS
A partnership will be liable for ___ entered into on its behalf by agents who have __ or ___ authority
contracts
actual
apparent
Partners are __ of the partnership
agents
Which business structure only requires intent to form?
General Partnership
Profit sharing creates the ___ that a partnership has been formed
presumption
Partners are__ ___ ___liable for all torts committed by employees or partners in the ordinary course of business or with the authority of the partnership. (And partners are always liable for their individual torts.)
jointly and severally
