Partnerships Flashcards
When can you go after a partner individually in a lawsuit?
Generally, before a claimant can pursue the individual assets of partners, the claimant
must exhaust the assets of the partnership and show that an outstanding liability
remains
When do you not need to exhaust partnership assets?
A claimant need not exhaust partnership assets when a partner has specifically
guaranteed a debt, when the partnership is bankrupt, or when the partnership or
a court has waived this exhaustion requirement
Partner liability once they retire. Are they liable for previous debts.
A retiring partner generally remains liable on debt incurred before his retirement.
When a partner retires and the partnership is not ended, the partnership must
buy out the partner
after>
When a partner dissociates but the partnership continues on, he remains liable on
partnership transactions entered into for one year after the dissociation if he
would have been liable as a partner and if the third party reasonably believed
that the retiring partner was still a partner
Limited partner liability?
Limited partners may only withdraw as allowed by the partnership agreement
b. Unless discharged, a partner remains liable on partnership debts incurred before her
withdrawal
debts prior to joining?
An incoming partner is not liable for debts incurred prior to joining
limited partner who then participates?
A limited partner who participates in the control of the business is liable to third parties
who transact business with the partnership reasonably believing, based on the
limited partner’s conduct, that the limited partner is a general partner
b. Virginia follows the Revised Uniform Limited Partnership Act (RULPA), which has
“safe harbor” provisions allowing limited partners to engage in certain activities
without endangering their limited partner status
c. Acting as a purchasing agent and filling in for a general partner during the general
partner’s vacations are not activities listed within the safe harbor provisions of the
RULPA; although the RULPA is not exclusive, these types of activities are those
in which a general partner, rather than a limited partner, would engage
are general partners liable for obligations to creditors not satisfeid by partnership assets?
General partners in a limited partnership are personally liable without
limitations for partnership obligations
promise to pay debt limited liability partner?
Under Virginia law, once a partner has obligated herself to make a contribution to the
partnership, she can only escape that liability by consent of all partners
2. A limited partner’s promise to contribute to a partnership is only enforceable when
addressed in a writing signed by the limited partner or his authorized attorney-infact
3. When a limited partner withdraws and her contribution is refunded to her, she is liable
for one year for the amount of the refunded contribution to the extent that an outside
creditor extended credit to the partnership while the partnership held the contribution
4. Unless discharged, a partner remains liable on partnership debts incurred before her
withdrawal
