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Business Associations > Partnerships > Flashcards

Partnerships Flashcards

1
Q

Governing Law of Partnerships

A

California has adopted the Revised Uniform Partnership Act

-Contract Law Principals also apply

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2
Q

Definition of Partnership (MEMORIZE)

A

An association of two or more persons to carry on as co-owners of a business for proft –> rebutabble presumption of partnership

-No intent to form a partnershp required
-No formalities required

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3
Q

Titled Property Belongs to Partnership if:

A
  1. Titled in Partnership Name or Person’s capacity as partner
  2. Purchased with partnership funds (rebuttable)

NOTE: If either held by partner without reference to partnership or not purchased with partnership funds, rebuttable presumption of non-partnership

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4
Q

How to Rebut Presumption of Partnership

A
  1. Do not share control
  2. Do not share in losses
  3. anything else relevant
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5
Q

Default Rules of Partnership

A
  1. One Partner, One Vote
  2. Ordinary Business Decision = majority vote
  3. Extraordinary business decision = unanimous vote
  4. No right to compensation
  5. Profits shared equally
  6. Losses shared same as profits
  7. PICK YOUR PARTNER –> unanimous consent of all partners required for new partner
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6
Q

Partnership Duties

A
  1. Duty of Care –> non-negligence and worse
  2. Duty of Loyalty
  3. Duty to Disclose (even if not asked) complete and accurate info
  4. Duty to Account
  5. Duty of Obedience
  6. Duty of Good Faith and Fair dealing
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7
Q

Rule of Partner Liability

A

Partners are jointly and severally liable for all torts committed by partner or employee that occur within the course of the partnership or are made with the authority of the partnership

Indemnification: Partner is entitled to indemnification from the partnership

Contribution: Partner is entitled to contribution from the other partners to the extent the partnership is unable to indemnify

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8
Q

Liability of Incoming Partners

A

No personally liable for debts incurred prior to joining but only to the extent of his or her capital contribution for preexisting debts and obligations

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9
Q

Liability of Dissociated Partner

A

Remains liable for partnership incurred prior to dissociation unless there has been a novation releasing him/her from liability

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10
Q

Can a partnership be bound by act of a dissociated partner?

A

Yes within 2 years after dissociation IF:
1. Act would have bound the partnership before dissociation
2. Other party reaosnably believed partners was still a partenr
3. Other party did not have notice of dissociation

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11
Q

Methods of Dissociation

A

Voluntary: Dissociation by Express Will
Involuntary:
Expulsion
Death
Partner Declaring Bankruptcy
Liability: Liable for wrongful dissociation = damages caused to partnership by associating

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12
Q

Possible Effects of Dissociation

A
  1. Partnership dissolves at election of dissociating partner if voluntary
  2. Partnership dissolves at term/bankruptcy dissociation if 1/2 of all partners agree
  3. Buy Out Dissociating Partner
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13
Q

Effects of Dissolution

A
  1. Partnership Ends
  2. Wind up Partnership by selling off business, paying off liabilities, and distributing any remaining profits to partners (or losses)
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14
Q

Priority of Distribution upon Dissolution

A
  1. Creditors
  2. Partner Loans (inside creditors)
  3. Capital Contribution
  4. Profit & Surplus
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15
Q

Partnership Formation Requirements

A
  1. Intent
  2. Agreement
  3. Capacity
  4. Legal Purpose
  5. Consent of all Partners
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16
Q

Partnership by Estoppel

A

A person who gives the impression through conduct that she is a partner cannot then argue she is not a partner

17
Q

Untitled Property Belongs to Partnership if:

A

Consider common law factors:
1. Use of partnership funds?
2. Use of property by partnership?
3. listed in partnership books?
4. Close relationsihp between property and business?
5. Improvement with partnership funds?
6. Maintenance with partnership funds?

18
Q

Rights of Partners

A
  1. Management (equal right to participate in management and control of business)
  2. Distribution
  3. Remuneration
  4. Indemnification
  5. Contribution
  6. Inspection
  7. Lawsuits
19
Q

Rights of Partners

A
  1. Management (equal right to participate in management and control of business)
  2. Distribution
  3. Remuneration
  4. Indemnification
  5. Contribution
  6. Inspection
  7. Lawsuits

Business Associations (10 decks)

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