Partnerships

Question 1

Personal liability of owners?

Answer 1

Yes, for anything within the scope of business

Question 2

Tax issues

Answer 2

No, pass-through liability to partners

Question 3

Transferability issues

Answer 3

A partner can sell only value of partnership interest

Question 4

Dissociation

Answer 4

Destroys the partnerships

Courts get involved

Question 5

Formation

Answer 5

Can be formal or informal
If you act like a partnership the law will treat you like a partnership
Individual who would like to take advantage of labor/capital interest of another individual

Question 6

Registration with government agency required?

Answer 6

Sometimes:
Business license with city (required by most cities)
Fictitious business name statement (FBNS) with county

Question 7

Partnerships

Answer 7

Is a voluntary association of two or more person who agree to carry on business together for profit
Both have management control

Question 8

Marshaling of assets

Answer 8

Partnership theory requiring creditors to first exhaust partnership assets before pursuing partners’ individual assets

Question 9

Limited partnership

Answer 9

Business entity created in accord with state statues that provides limited liability to some of its members, called limited partners (silent investors)
Limited partner has no management authority but liability only to extent of investment

Question 10

Doctrine of Partnership by Estoppel

Answer 10

Must prove 3 elements by a preponderance of evidence

1. “Partners” tell others they are partners
2. 3rd party relies on assertion
3. 3rd party suffers harm

Question 11

Joint Ventures

Answer 11

Partnership for specific projects made up of multiple companies
Limit liability to any harm that occurs during that venture or caused directly by the ventures project
Any entities can form one