partnerships Flashcards
partnership formation
association of two or more persons to carry on a for-profit business as coowners
no specific intent needed
sharing of profits results in presumption
duty of loyalty
-cannot compete w/ partnership
-can’t advance interest adverse to pship
-usurping pship opportunity
-using partnership property or business: type of business of bship
-self dealing: using pship for personal benefit
CAPSUle
compete, adverse interest, property/business, self-dealing, usurping opportunity
duty of care
refrain from KRIN
Knowing violation of law
reckless conduct
intentional misconduct
negligence (gross)
profits/losses
default rule is equal split of profits
losses follow profits
look to partnership agreement
management rights
each partner has equal rights in management and conduct
majority for ordinary decision
unanimity for extraordinary decisions
power to bind partnership
partners can if have authoirty
authority
express: partnership agreement or authorization
implied: reasonable belief that action necessary to carry out task
apparent: partnership comm’ing with third party
liability for torts
liable for partners torsts in ordinary course of business or with partnership authority
indemnity
pship must indemnify partner if liability in ordinary course of business
liability to third parties
partners are jointly and severally liable for obligations
creditors - how can they seek assets
must exhaust partnership assets before partners’ individual assets
at will partnership can dissolve
when partner dissociates by giving notice
winding up priority
creditor then partners
assets sold and then partners get distributed
LLPs
limited partners, not personally liable
LPs
limited partners not personally liable
general partners are
