Pg 44 Flashcards
What does the Sarbanes-Oxley act do for whistleblowers?
It gives them protection. The audit committee of the board must have a procedure to handle complaints from within the company, and it is illegal to retaliate against anyone that wants an investigation of the company under a lawful act if they reasonably believe there’s been a violation.
What is the liability of partners in a partnership?
All partners are liable jointly and severally for everything chargeable to the partnership
What are the default rules for the rights and duties of partners?
- each will be repaid his contribution
- each will share equally in the profits and liabilities
– the partnership will indemnify partners for anything paid in the ordinary course of business
– all partners have equal rights to management of the business
– you cannot bring new members without the consent of all partners
– differences in opinion are decided by a majority vote of the partners - partnership books are kept at the principal place of business and all partners have access to them
If partners in a partnership have differences of opinion, what do they do to decide?
Majority of the partner‘s decision rules. If the partners are equally divided, those that do not want to make the change get their way.
Is it possible to assign a partnership interest?
Yes, but only profits can be assigned, not control
If a former partner doesn’t wind up, what can he get?
Either a share of the post-dissolution profits or the interest on the value of the partnership stake until the value of the stake is paid to him.
What is the difference between the uniform partnership act and the revised uniform partnership act?
How it views the entity.
- RUPA: recognizes a partnership as a separate entity that is distinct from its partners, not as an aggregation of its members. Any property gotten by the partnership is the property of the partnership and not the partners. Partnerships can sue and be sued in the name of the partnership.
What is the difference between the uniform partnership act and the revised uniform partnership act with regard to what happens when a partner leaves?
– UPA: DISSOLUTION. If a partner leaves, that dissolves the partnership where either there is a buyout of the living partner or a winding up
– RUPA: DISSOCIATION. If a partner leaves, he disassociates himself without affecting the partnership itself.
What are things that can cause a disassociation under the revised uniform partnership act?
Death, withdrawal, bankruptcy, expulsion
What is a partnership agreement?
This is the written or oral understandings based on the conduct of the parties and surrounding circumstances that determines how much say the partners have in management of the partnership. If there is no partnership agreement, then the statutory default rules apply.
What are the statutory default rules for partnership agreements?
Unless a partnership agreement says otherwise:
– partners vote equally on partnership matters regardless of how much they contributed to the partnership
– everything is determined by a majority of the members except extraordinary things like amending the partnership agreement [which has to be done with consent of all partners]
If you are a new partner that enters a partnership, are you liable for partnership debts that were contracted for before you joined?
No, you are only liable for ones that are incurred after you join
What are the different types of partnerships?
- sole proprietorship – general partnership – limited partnership – limited liability partnership – limited liability limited partnership - limited liability company – joint stock company – business trust – joint venture – family limited partnership
What is a sole proprietorship?
The most basic form of business ownership. The business has no independent existence outside of its sole owner and the owner is 100% liable for the debts of the business. If the owner dies, the business ceases to exist. The owner is the sole owner, has total control, is personally liable for all debts of the business, and is entitled to all profits.
What is a partnership?
An association of two or more people to carry on as co-owners of business for profit that involves both profit-sharing and control sharing.
