Partnerships & LLC's Flashcards
What is a partnership?
When two or more persons or entities intend to carry on a for-profit business as co-owners. Do NOT need intent to form a partnership.
Do you need a written agreement to form a partnership?
No.
What is the profit sharing test?
If there is profit sharing, there is a presumption that there is a partnership.
What is a partner by estoppel
A person will be treated as a partner if: there is a representation that the person is a partner, the person makes or consents to the representation, a third party reasonably relies on the representation, and the third party sufferes damages as a result.
Partners are ___ of the partnership
Agents
Partners owe duties of ____ and ___
Loyalty; Care.
A partner ___ transfer his or her rights in the partnership
Can. This does not cause dissolution or dissociation.
Property acquired by partners or partnership is presumed to belong to the ____
Partnership.
A new partner must get the consent of __ the existing partners.
All.
A ____ of partners must approve ordinary business decisions while ___ partners must approve matters outside the ordinary course.
Majority; all.
A partner ___ derive a personal benefit from the use or possession of partnership property.
Cannot.
A partner is ___ to the partnership for damages caused by wrongful dissociation.
Liable. A dissociation is wrongful only if in breach of provision of the partnership agreement or before the completion of the undertaking.
A partnership must indemnify a dissociated partner against all partnership liability incurred when?
Before or after the dissociation.
A partnership is ____ for a partners torts in the course of the partnership business
Liable
Partners are ____________ for all partnership obligations?
Jointly and severally liable. A judgment is first satisfied from the partnerhsips assets then the partners assets.
A dissociation from a partnership at will causes?
The partnership to dissolve.
Before winding up is complete, a partnership ____ resume carrying on its business as if dissolution had never occured.
May.
At formation, a limited partnership must have
at least one general partner and one limited partner.
Does the filing of a statement of qualification, which transforms a partnership into an LLP, create a new partnership?
It does not - the new llp assumes all prior obligations/assets etc
Talk about transferees
partner may transfer the right to share in the profits and losses of the partnership and to receive distributions. The transfer of that partnership interest creates in the transferee a right to receive distributions to which the transferor would otherwise be entitled.
A transfer of a partner’s partnership interest does not make the transferee a partner unless the other partner or partners consent to making the transferee a partner.
To form a limited partnership, what must be done?
a certificate of limited partnership must be filed with the state and must include the name and address of each general partner. In addition, all of the general partners must sign the certificate. The limited partnership comes into existence upon the filing of the certificate of limited partnership. If a certificate is not filed, the limited partnership is not formed.
A person admitted as a partner into an existing partnership is?? is not?? personally liable for any prior partnership obligations.
is not (but contribution may be reached)
