Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Additional Flashcards > Partnerships > Flashcards

Partnerships Flashcards

1
Q

How is a general partnership created?

A

When:

  1. Two or more persons;
  2. As co-owners;
  3. Carry on a business for profit.

*No written agreement or intent is needed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

A person who receives a share of the profits of the partnership business is presumed to be a partner, unless the profits were received in payment of what?

A
  • of a debt;
  • for wages (as an employee/independent contractor);
  • of rent;
  • of an annuity or retirement benefit;
  • of loan or interest charges;
  • for the sale of the goodwill of the business.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a limited partnership?

A
  • There is at least one general partner;
  • There is at least one limited partner;
  • The general partner(s) has unlimited personal liability;
  • The limited partner(s) has limited personal liability;
  • Formed by filing a Certificate of Limited Partnership with the Secretary of State
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the default voting requirement for a partnership to amend its Partnership Agreement?

A

A unanimous vote of ALL partners.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How does any type of partnership become a limited liability partnership?

A
  1. Approval by the same vote that is necessary to amend the partnership agreement (default rule is unanimous vote of all partners);

AND

  1. By filing a Statement of Qualification with the Secretary of State.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a limited liability partnership?

A
  • No distinction between general and limited partners
  • All partners have limited personal liability;
  • Formed by filing a Statement of Qualification with the Secretary of State
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What information must a

Statement of Qualification include?

A
  1. The name and address of the partnership;
  2. A statement that the partnership elects to become an LLP;

AND

  1. A deferred effective date (if any).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What information must a Certificate of Limited Partnership include?

A
  1. Name of the partnership;
  2. Address of the partnership’s principal office;
  3. Name & address of partnership’s registered agent;
  4. Name and address of each general partner;
  5. Whether it’s a Limited Liability Limited Partnership (LLLP);

AND

  1. Signature of every general partner.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

When does a partner have Express Actual Authority to bind the partnership?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A partner with Apparent Authority will NOT bind the partnership during what circumstance?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

A partner has Apparent Authority to bind the partnership, even after dissolution, in what circumstance?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How are debts and obligations of a partnership shared among partners?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the liability of a general partner?

A

Personally liable for ALL obligations of the partnership AND jointly and severally liable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

When can a judgment creditor levy execution of a judgment against a partner’s personal assets for a partnership debt?

A
  1. When a judgment has been rendered against an individual partner;

AND

  1. The partnership assets have been exhausted or are insufficient.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the liability of an incoming partner who joins a partnership that has already been formed?

A

NOT liable for obligations incurred prior to their admission, but still at risk for losing capital contributions made to satisfy partnership obligations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When are limited partners personally liable for the obligations of the Limited Partnership (LP)?

A

When they participate in the management and control of the business.

15
Q

How are profits and losses shared

amongst the partners?

A

Profits are shared EQUALLY, and losses will be shared in the same ratio as profits UNLESS there is an agreement to the contrary.

16
Q

Under default partnership rules, what elements of partnership ownership can a partner transfer to another person?

A
  1. His interest in the share of the profits and losses;

AND

  1. His right to receive distributions.
17
Q

When is property acquired in the name of a partner presumed to be separate property?

A
  1. When no partnership assets are used to acquire the property;

AND

  1. No written title instrument for the property references the partnership or that the person is a partner.
18
Q

When is a partner entitled to remuneration for services performed for the partnership?

A

Generally, never. UNLESS:

  • There is an agreement;

OR

  • It is for the reasonable compensation of services rendered in winding up the business.
19
Q

What is the difference between role of general and limited partners in a Limited Partnership?

A

General partners: have FULL management rights and control.

Limited partners: have NO say or control, and DO NOT have the right to manage day-to-day business (generally passive with limited voting rights).

20
Q

Under RULPA, what records does a limited partner have the right to inspect and copy?

A

Any records the limited partnership is legally required to keep.

21
Q

Under RULPA, what records does a limited partner have the right to obtain?

A
  • True & full information regarding the state of the business and financial condition.
  • Copies of the LP’s tax returns.
  • Any other information that is just and reasonable.
22
Q

Under RULPA, what records does a limited partner have the a right to only after a formal demand is made?

A
  • True & full information regarding the state of the business and financial condition.
  • Copies of the LP’s tax returns.
  • Any other information that is just and reasonable.
23
Q

Under RULPA, when has a partner breach his duty of care?

A

When he engages in:

  • Grossly negligent or reckless conduct;
  • Intentional misconduct; OR
  • A knowing violation of law.
24
Q
A
25
Q

Under RULPA, what must a partner do to satisfy his duty of loyalty?

A
  1. Account for any property, profit, or benefit derived by the partner from the partnership property;
  2. Not have an interest adverse to the partnership;

AND

  1. Not compete with the partnership.
26
Q

When is a partner NOT liable for conduct that would otherwise breach his duty of loyalty?

A
  1. If the partner fully discloses the information;

AND

  1. EITHER the partnership agreement is amended OR
    all partners consent to the transaction.
27
Q

How does a partner become dissociated from a partnership through expulsion?

A

Unanimous vote that it would be unlawful to carry on the business with the partner AND the partner’s interest has been transferred.

28
Q

When can the dissociation of a partner be deemed wrongful?

A
  • If it’s in breach of an express provision of the partnership agreement;

OR

If the partnership is for a definite term or particular undertaking, and the partner withdraws, is expelled by judicial determination, or becomes a debtor in bankruptcy.

29
Q

What happens to a partner that has been wrongfully disassociated?

A
  • Bars the partner from participating in management
  • Bars from the partner from participating in the winding up process
30
Q

How can a General Partnership be dissolved?

A
  • Upon notice of the partner’s express will to withdraw;
  • Upon an event agreed upon in the agreement;
  • Upon an event that makes it unlawful to continue;
  • Judicial dissolution on application of a partner;

OR

  • Judicial dissolution on application of a transferee.
31
Q

When does dissolution of a Partnership for Definite Term occur?

A
32
Q

What does dissociation by one partner allow the other partners to do?

A

It allows ALL of the remaining partners to waive winding up and termination, and instead gives them the option to continue the partnership by buying out the dissociated partner’s interests.

33
Q

When does a non-judicial dissolution of a Limited Partnership occur?

A

Upon:

  • The occurrence of an event specified in the agreement;
  • The consent of all general partners and of all limited partners owning a majority of rights to distributions;
  • After dissociation of a general partner;
  • 90 days after dissociation of the last limited partner;

OR

  • The filing of a declaration of administrative dissolution by the Secretary of State (for failure to pay fees, etc.).
34
Q

During the winding up process, partnership assets are converted to cash and distributed in what order?

A
  1. Creditors;
  2. Partners’ capital contributions;

AND

  1. Profits to be distributed among the partners.
34
Q
A

Additional Flashcards (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions