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This document summarizes key aspects of partnership law, including types of partnerships, how partnerships are formed, fiduciary duties of partners, dissolution of partnerships, and more. The main types of partnerships discussed are at-will partnerships, partnerships for a term, general partnerships, and limited partnerships. The document also outlines the eight factors courts examine to determine if a partnership relationship exists based on the intentions and actions of the parties.
This document summarizes key aspects of partnership law, including types of partnerships, how partnerships are formed, fiduciary duties of partners, dissolution of partnerships, and more. The main types of partnerships discussed are at-will partnerships, partnerships for a term, general partnerships, and limited partnerships. The document also outlines the eight factors courts examine to determine if a partnership relationship exists based on the intentions and actions of the parties.
This document summarizes key aspects of partnership law, including types of partnerships, how partnerships are formed, fiduciary duties of partners, dissolution of partnerships, and more. The main types of partnerships discussed are at-will partnerships, partnerships for a term, general partnerships, and limited partnerships. The document also outlines the eight factors courts examine to determine if a partnership relationship exists based on the intentions and actions of the parties.
At Will: Any partner can walk away at any time without An association of two or more persons to carry on as co- + Taxed once causing a breach. Thus, no damages and partnership owners a business for profit. Sharing of profits is prima + Personal assets protected just dissolves. facie evidence of partnership but no such inference shall - No liability protection At Term: For a specific time or goal. When a partner be drawn if such profits were received in payment as leaves there is a breach and damages. The other wages of an employee partner can continue the business as it wasn’t Liability dissolved. Jointly & Severally: everything General: Two or more people associated together to Fenwick 8 Factors to Determine the chargeable to the partnership carry on as co-owners of a business for profit. Each Existence of a Partner Relationship Jointly: other debts and partner is an agent of the other. Manage partnership 1. Intention of the parties obligations of partnership and have unlimited liability. 2. Right to share in profits Vicarious: other partner’s tortious Limited: Basically silent investors, have no say in 3. Obligation to share in losses conduct when acting in the management or control. No liability for partnerships 4. Ownership and control of the partnership ordinary course of business or debts beyond capital contributions and investments. property and business with authority from the By Estoppel: Representation that one is the partner of partnership another. Requires holding out of partnership, a change 5. Community of power in administration of position, with consequent injury, by the third person 6. Language in the agreement in reliance. 7. Conduct of the parties toward third persons Service: One partner contributes only labor. Raising Capital Permanent: No end date. Requires mutual approval for 8. Rights of the parties on dissolution Unless agreement says otherwise, dissolution. no partner: - Can be forced to contribute Formation anything What Triggers Dissolution - Can be added without 1. Change in relationship of partners 1. Agreement of partners and compliance with requirements of contract law consent of all existing 2. Express will of partner with no definite term by; partners a. Act, operation of law, court order 2. Partners must have legal capacity - Their share cannot be b. Express will 3. Agreement can be oral unless SOF requires a changed without their c. Without violation of agreement writing consent 3. Event which makes it unlawful for the business to be carried on Partners’ Rights 4. Death of any partner Each repaid contributions and share equally in Default Positions 5. Bankruptcy of any partner Majority of partners rule profits and surplus, must contribute to losses and 6. Decree of court order where partner’s conduct Agreement > UPA capital a. Lunatic or unsound mind b. Incapable of performing Must indemnify every partner for liabilities Partners have equal rights reasonably incurred c. Willfully & persistently breaches the Receive interest on capital contributed agreement ETC. Equal rights in management and conduct d. Impractical to carry on No person can become member without consent of Where agreement is silent, all partners UPA fills in gaps Any difference is decided by a majority In order for a creditor to be Dissolution a partner in a firm, the Order of dissolution: debts to (1) creditors, (2) creditor must be closely partners for noncapital contributions, (3) partners for Partner does not violate duty or obligation enough associated with the capital contributions, (4) partners for profit when… firm so as to make it a co- Liquidation: Sale of assets, former partners can bid on Merely because conduct furthers his own interest owner carrying on the the firm at auction Lends money and transact other business as business for profit. After dissolution: partnership must be wound up, creditor with partnership firm’s assets are distributed to partners They can transact business so long as they disclose Expulsion: wrongful dissolution, must have been a the opportunity so it can be equalized Buy Out Agreements bona fide or in good faith without violation of Allows a partner to end their partnership agreement relationship with the other Joint Venture Elements partners and receive a payment in 1. Contribution by the parties of money, property, return for their interest. Fiduciary Duties time, or skill in some common undertaking, but Triggered by; 1. Loyalty the contributions need not be equal or of the - Death 2. In winding up – use partnership’s property or same nature - Retirement appropriation of a partnership opportunity 2. A proprietary interest and right of mutual control - Partners or partnership 3. Not dealing with adverse parties over the engaged property 4. Not competing 3. An express or implied agreement for the sharing 5. Care of profits, and usually, but not necessarily, of 6. Good faith and fair dealing losses *The existence and scope of a fiduciary duty depends on language of agreement* 4. An express or implied contract showing a joint venture was formed.