Business Law chapter 25
How are profits shared in a partnership?
"Profit sharing is equal by default A. Unless partnership agreement says otherwise B. Unless specified; sharing of losses follows same pattern as sharing of profits"
Explain the nature of a partnership agreement
A business agreement will be considered a partnership if it involves two or more persons, in association with one another, who are caring on a business as co-owners for profit
Is it necessary to have a partnership agreement written out when a partnership is formed?
A partnership is that it can emerge simply because of the way that two or more parties are doing business with one another. There are two forms partnership by contract or by proof of existence.
What are the advantages and disadvantages of a sole proprietor ship
Advantage to a sole proprietor ship that the owner has complete control over the business and disadvantage is that the soul proprietor is subject to unlimited liability
What are the advantages and disadvantages of forming a partnership rather than a corporation?
Corporations are more expensive to set up but partnerships are easy. Partnerships make it liable for each other's debts and legal responsibilities and corporations do not. Partnerships do not have to pay taxes but corporations do. Lastly partnerships are managed by the partners but corporations are managed by shareholders.
Describe the differences between the aggregate and entity theories of partnership
Entity theory-a partnership exist as an individual person with its own separate identity. Aggregate theory-the partnership is seen simply as an assembly or a collection of the partners who do business together.
A partner's economic interest in the partnership is non-transferable
False
Business people can form a sole proprietor ship only by going through the attorney generals office in the state capital
False
Limited partnerships must have at least three limited partners and no general partners
False
The revised uniform partnership act has yet to be adopted by any state legislature
False
Under the RU PA, a partnership is an aggregate
False
Under the RU PA, each partner has a proper interest in all specific items of partnership property
False
In most states, to become a registered limited liability partnership, the partners must file with the auditors office in the county courthouse
Farce
Explain when profit-sharing does not create a partnership
It is not enough for two or more people to simply be co-owners of property, even if the property does make profit.
Distinguish between a registered limited liability partnership and a limited partnership
RlL partnership is a general partnership in all respects except one -liability. L partnership is a partnership formed by two or more persons having one or more general partners and one amor limited partners.
List the most common forms of business associations
Sole proprietorship, General partnerships, limited partnerships, limited liability partnership, private corporations, public corporations, state owned corporation, Quasi public corporations, limited liability corporation, joint ventures, franchises
Explain what constitutes a person in partnership law
The name and duration of the partnership, the names of the partners, the amount of capital that each partner has contributed to the partnership, the character and the extent of the business of the partnership, the way that profits will be divide, the way that any laws will be shared, the duties of the partners, any limitations placed on the partners, a section on salaries if so desired, an explanation of the dissolution process, if it is to be different from the process outlined in the our UPA and a provision for determining the value of a partners interest in the partnership
A major disadvantage of a sole proprietor ship is unlimited liability
True
A partnership at Will is one that any partner may leave without liability
True
A partnership can emerge simply because of the wait two or more parties are doing business with one another
True
A person can be a living flesh and blood individual, a corporation, another partnership, a joint venture, a truss, estate, or some other commercial enterprise or legal institution
True
A registered limited liability partnership is like a general partnership in all respects except liability
True
The RU PA includes two methods by which a partner becomes disassociate with a partnership: dissociation and dissolution
True
The greatest advantage of a sole proprietor ship is that the owner has complete control over the operation of the business
True
The sharing of profit is prima Facie evidence of the existence of a partnership
True
Under the RU PA, partners are considered to be agents of the partnership
True
VRUPA states that partnership property is any and all property that has been obtained by the partnership itself
True
When partnership terminates, there must be a winding up of the partnership affairs
True
Identify the different views a specific partnership property in partnership law
Under the UPA, each partner had a property interest in our specific items of partnership property. Each partner was there for a co-owner of that property. Under the RU PA, a partner is not co-owner of partnership property and has no interest in partnership property which can be transferred either voluntarily or involuntarily.
Identify the two model Acts that govern partnership law
Uniform partnership act and revised uniform partnership act
Distinguish between dissociation and dissolution in a partnership law
dissociation takes place whenever a partner is no longer associated with the running of the firm. Dissolution occurs when a partner ceases to be associated with the partnership and the partnership ends.
What duties do the partners in a partnership have to one another?
loyalty, obedience, and due care
What rights do partners have in a partnership?
to use partner property, to receive the partner's share of the profit, to manage the day to day operation of business, and to approve serious matters of the business and approve amendments to the partnership agreement. to be enforced: to see the firms financial records, to compel an accountant, and to compel a dissolution of the entire partnership.