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