Business Law chapters 36, 37, 38, 39, 40

Partnership of estoppel

Legally binding partnership that may arise where, in fact, no formal partnership agreement is in effect. A person who by conduct or words represents, or allows him/herself to be represented, as a partner in a firm is liable for the credit or loans obtained by firm on the basis of such representation. Also called presumption of partnership. Read more: http://www.businessdictionary.com/definition/partnership-by-estoppel.html#ixzz30a19cpOD

A partnership is based on:

a competent persons voluntarily agreeing to place some or all of their funds or other assets, labor, and skills in a business with the understanding of sharing losses and profits.

a partnership differs from an agency relationship in that:

a partner has an ownership interest in the business, unlike an agent

Devoting time and energy to partnership business generally is

a partners duty

Concerning partnerships, at common law:

a partnership was never treated as separate legal entity

Partnership at will

allows any partner to dissolve the partnership without incurring liability for losses to other partners that result from the termination, allows any partner to dissolve the partnership at any time, does not have a fixed duration specified.

liabilities of limited partners

are different from liabilities of the general partners

limited partners

are not totally free of restrictions in running the business

in a limited partnership

at least one general partner is necessary

Partnerships are governed by:

both common law concepts and by statutory law

termination of a partnership

can be would up after dissolution is initiated

partnership by estoppel

cannot result in partnership rights for the alleged partners; when it occurs, results in the nonpartner being regarded as an agent whose acts are binding on the partnership, allows a curt to impose liability on the alleged partners

The rights of partners in a partnership relate to such things as

compensation, accounting, inspection of books, and mamgement

Partnership for a term

continues till a designated date is reached or completion of the project

on dissolution of a limited partnership

creditors rights take first prority

special partnerships

differ from general partnerships in several ways; are like general partnerships in many ways; orginated in medieval europe

Joint ownership of property

does not in and of ititself create a partnership

The Uniform Partnership Act (UPA):

has done much to reduce controversies in the law relating to partnerships

In the operation of the partnership, unless the partners agree otherwise, each partner

has one vote in management matters regardless of the proportional size of his or her interest in the firm

each partner

has the duty to produce full and complete information concerning the conduct of all aspects of partner business

dissociated normally is considered wrongful

if a partner lacks the right to dissciate

Under the UPA, a court may order dissolution

if the business can only be operated at a loss

Winding up

includes preserving partnership assets

the major advantage of the limited liability partnership (LLP) is

it limits the personal liability of the partners while allowing the partnership to continue as a pass-through entity for tax purposes

a third party must sue all of the partners as a group, but each partner can be held liable for the full amount under:

joint liability

Limited partnerships

limit the liability of some owners

Dissociation

occurs when a partner ceases to be associated in the carrying on of the partnership business; alters the liability of both parties to third parties, terminates some of the rights of the dissociated partner. creats a mandatory duty for the partnership

A family limited liability partnership (FLLP) is a partnership

probably used most often in connection with agriculture

a buy-sell agreement

provides for the dissociating party to buy out the other parties should the situation warrant

Decisions that apparently are not for carrying on the ordinary course of the partnership business

require the unanimous consent of the partners

the buyout price for a partners dissociation is based on:

the amount that would have been distributed to the partner if the partnership had been wound up on the date of dissociation