Business Law Chapter 37
joint and several liability
In partnership law, a doctrine under which a plaintiff can file a lawsuit against all of the partners together or one or more of the partners separately
personal liability
LLp allows partners to avoid __________ in the event of malpractice by another partner
uniform partnership act
UPA
pass through entity
a business entity that has no tax liability; the entity's income is passed through to the owners, and they pay taxes on the income.
limited liability partnership
a hybrid form of business organization that is used mainly by professionals who normally do business in a partnership; a pass through entity for tax purposes, but a partner's personal liability for the malpractice of other partners is limited; NO GENERAL PARTNERS
family limited liability partnership
a limited liability partnership in which the majority of the partners are members of a family
limited partnership
a partnership consisting of one or more general partners and one or more limited partners
partnership by estoppel
a partnership imposed by a court when nonpartners have held themselves out to be partners, or have allowed themselves to be held out as partners, and others have detrimentally relied on their misrepresentations
loan payments, wages, rent, sale of goodwill
a partnership is not inferred if profits are received as payment in the following situations...
information return
a tax return submitted by a partnership that reports the business's income and losses; the partnership itself does not pay taxes on the income, but each partner's share of the profit (whether distributed or not) is taxed as individual income to that partner
limited liability limited partnership
a type of limited partnership in which the liability of the general partner is the same as the liability of the limited partners—that is, the liability of all partners is limited to the amount of their investments in the firm
articles of partnership
a written agreement that sets forth each partner's rights and obligations with respect to the partnership
each partners share of income
according to the aggregate theory of partnership, while a partnership does not pay federal income tax, it still files a return to report...
easy to maintain, informal, profits and losses shared equally
advantages of a partnership (under UPA)
partnership
an agreement by two or more persons to carry on, as co-owners, a business for profit
yes
can a partner assign his interest?
yes
can corporations be partners in a partnership?
personal liability for torts, dissolved upon death, difficult to raise financing
disadvantages of a partnership
no
do partnerships pay federal income tax?
big 4
example of llp in real life
general partner
in a limited partnership, a partner who assumes responsibility for the management of the partnership and has full liability for all partnership debts
limited partner
in a limited partnership, a partner who contributes capital to the partnership but has no right to participate in its management and has no liability for partnership debts beyond the amount of her or his investment
investment/capital contributions
in an lp, the limited partners liability is limited to....
joint liability
in partnership law, a doctrine under which a plaintiff must sue all of the partners as a group, but each partner can be held liable for the full amount
charging order
in partnership law, an order granted by a court to a judgement creditor that entitles the creditor to attach profits or assets of a partner on dissolution of the partnership
one equal vote
in the absence of a partnership agreement, the UPA says each partner gets __________ in management
buy sell agreement
in the context of partnerships, an express agreement made at the time of partnership formation for one or more of the partners to buy out the other or others should the situation warrant
torts
joint and severable liability for...
contracts
joint liability for...
management
limited partner loses his limited liability if he engages in....
management
limited partners do not engage in...
formal creation
limited partnership requires...
third party creditors, partner loans, capital contributions, distribution
order of obligations to be paid
agents and fiduciaries
partners are both ______ and _______ of one another
compensation
partners do not have right to....
sell assets or donate
partners need unanimous consent to....
oral or written
partnership agreements can be...
two years
partnership is bound to liabilities that arose by acts of outgoing partner for...
common law and statutory law
partnerships are governed by both...
subordinate
supervising partner is liable for acts of __________
buyout price
the amount payable to a partner on his or her dissociation from a partnership, based on the amount distributable to that partner if the firm were wound up on that date, and offset by any damages for wrongful dissociation
certificate of limited partnership
the document that must be filed with a designated state official to form a limited partnership
dissolution
the formal disbanding of a partnership, corporation, or other business entity; for instance, can be by acts of the partners, by operation of law, or by judicial decree
winding up
the second of two stages in the termination of a partnership or corporation, in which the firm's assets are collected, liquidated, and distributed, and liabilities are discharged
dissociation
the severance of the relationship between a partner and a partnership or between a member and a limited liability company
assignment or charging order
these do not dissolve the partnership
UPA
this governs a partnership in the absence of a partnership agreement
true
true or false: partnerships are recognized as separate legal entities
for a term, at will
two durations of partnerships
equal profits and losses
under UPA this is how partnership interest is shared
majority
under UPA this vote wins (except in the case of actions that impact the existence of the partnership)
deadlock
when equal business partners disagree on a major decision and can't move forward until the decision is resolved
1065
where is partnership income reported?
