Term
| Courts determine whether a partnership exists by looking at: |
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Definition
1. sharing of profits & losses
2. joint ownership of the business
3. equal right in the management of the business |
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Term
| The sharing of profits & losses creates the assumption that a partnership existis, unless the profits were received as: |
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Definition
1. a deby by installments
2. wages of an employee
3. rent to a landlord
4. an annuity to a surviving spouse
5. a sale of goodwill of a business or property |
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Term
| Rights of partners under the UPA in a partnership |
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Definition
1. equal management rights
2. equal vote, regardless of the relative size of his/her capital contribution
3. decisions require a majority vote unless otherwise agreed, except when unanimous consent is necessary |
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Term
| Situations in which unanimous consent is needed for partnership decisions |
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Definition
1. altering the essential nature of the business or entering a wholly new business
2. admitting new partners or altering the capital structure of the partnership
3. assiging partnership property into a trust for the benefit of creditors, disposing of goodwill, or undertaking any act that would make conduct of the partnership’s business impossible
4.confessing judgment (act by a debtor permitting a judgment to be entered against him by a creditor, for an agreed sum, without institution of legal proceedings) against the partnership
5. amending the partnership agreement |
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Term
| Demand for a formal accounting of the partnership's assets enforces |
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Definition
1. the partner’s rights under the partnership agreement
2. the partner’s rights under the UPA
3. the partner’s rights and interests arising independently of the partnership relationship |
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Term
| Partner's property rights |
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Definition
1. an interest in the partnership, entitling the partner to share in the partnership’s profits and to receive a return of capital upon the termination of the partnership, in proportion to the partner’s investment;
2. a right in specific partnership property
3. a right to participate in partnership management. |
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Term
| Partnership dissociation occurrence |
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Definition
1.Give the express will to withdraw
2.Occurrence of an event agreed upon
3. Unanimous vote of other partners in certain circumstances or when it becomes unlawful to continue to do business with that partner
4.Court order or arbitration
5.By the partners declaring bankruptcy, becoming physically or mentally incapacitated, or dead |
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Term
| When a partner ceases to be associated with the carrying on of the partnership interest, she: |
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Definition
1. is normally entitled to have the partnership purchase her interest, and
2. forfeits her authority to act for the partnership and to participate in partnership management. |
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Term
| A partner’s dissociation may be wrongful – and, thus, expose the dissociating partner to liability to the partnership and individual partners damaged by her dissociation – if, inter alia: |
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Definition
(1) the dissociation constitutes a breach of the partnership agreement aka is wrongful;
(2) the dissociation is premature (before set time); or
(3) the partner is expelled by a court or arbitrator or declares bankruptcy. |
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Term
| Dissolution can be brought about by: |
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Definition
(1) the terms of the partnership agreement,
(2) voluntary or involuntary withdrawal,
(3) the addition of one or more new partners,
(4) death of a partner,
(5) bankruptcy of a partner or of the partnership, or
(6) judicial decree. (impractical for the firm to continue, dissension between partners is so persistent that it undermines the ability to do business) |
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Term
| In the case of dissolution, the partnership must give: |
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Definition
(1) actual notice to any third party creditor of the partnership, and
(2) actual or constructive notice to any other third party affected by the dissolution (e.g., customers, employees). |
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Term
| Once dissolution is formalized and notice has been given to all partners and all affected third parties, the partners are only authorized to: |
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Definition
(1) complete transactions begun, but not completed, as of the date of dissolution, and
(2) wind up the partnership’s affairs (i.e., collect and preserve partnership assets, pay partnership debts, and account to each partner for the value of his interest in the partnership). A partner who does the physical winding up is entitled to compensation. |
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Term
| Order that partnership assets are distributed after a partnership terminates: |
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Definition
(1) payment of third party debts and refunds of loans or advances made by partners to or for the partnership; then
(2) return of partner’s capital contribution and distribution of profits to the partners in proportion to their pre-termination share of profits, unless otherwise agreed. |
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