What is a general partnership?

Who can be a partner and who cannot?

A voluntary association of 2 or more people who agree to carry on business together for profit.

The partners can cinlude a person, other businesses, or partnerships (but it can never be a sole proprietorship.)

What is a joint venture?

Are the members of joint ventures agents of each other?

You do not need to do file anything with the state. You just need to agree to be in partnership with each other.

Basically persons and entities must come together to create a business for profit.

How must a partnership be named?

What must be done if certain criteria are not met?

Does the partnership agreement need to be in writing?

No, the partnerhsip does not need to be in writing?

The partnership agreement should say what the purpose of the partnership is and who longit will last.

This should be genearl enough to allow the business to grow with some leeway

How are partnerships managed?

How does this affect liablity?

All partners are each other's agent and agents for the partnership.

All partys are jointly liable but if anyone goes outside the scope of the agency, the partnership can sue for breaching the partnership agreement.

A partner binds a partnership. So if the partner signs a contract for kitchen supplies, then he has bound the partnership to the contract. So if the partner fails to pay and then ther partnership and the o ther partners would also be held liable. If the partner buys clothes for themselves not in the normal course of business and uses the partnership and holds themselves out as doing business for the partnership and the vendor belives the partner is acting in the scop of their partnership, then the partnership will still be liable for the $$$. Then the partners will have to work it out among themselves (indemnify) If the vendor DID know that this was not in the normal course of business then the parnterhsip will not be liable.

If parties have joint liability, then they are each liable up to the full amount of the relevant obligation

The converse is several or proportionate liability, where the parties are liable for only their respective obligations. 

Under joint and several liability or all sums, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment. This means that if the claimant pursues one defendant and receives payment, that defendant must then pursue the other obligors for a contribution to their share of the liability.

When receive a new assignment, always look at the jurisidictional language for assignments. ALWAYS look at the directions

They form in Delaware b/c they have a court system that only looks at business law so it’s got great case law so it’s easy to know if you can or cannot do something. Then qualify to do business elsewhere.

How do you form a general partnership?

Does the agreement have to be in writing?

Creation of partnership, like with a sole proprietor- all you have to do is get some peeps together and agree to carry out business. There has to be an agreement. Typically it is written, it can be oral but not awesome idea.

You do not have toseek jurisidiction permission to form.

Name must include all the last names of tall the general partners. If not, then you have to find a d/b/a and then you would have to go to state.

n the partnership agreement, we contract for certain things, how we reseolve things, etc. If we don’t plan for something, then we use the general partnership law in the state.

Governing law- either unform partnership or the revised uniform partnership act. But you should always go to the language of the state, because that’s what controls.

Agency- partners have implied authority to conduct ordinary partnership business.

when one partner can be responsible to pay the entire amount (in torts).

Are partners still liable once they leave a general partnership?

What can a partner do to change this?

If partner leaves, they can still be liable for things done by the partnership in some jurisdictions for two years. So to make this last less time, you can file something to limit liability (called a statement of dissociation) that limits this liabilite for 90 days after it is filed. It is filed at the state level.  By doing this, file with state, then it puts it on the lender, vendor to check and see if such a thing was filed. So if I’m a lender, I want to check to see if someone has filed this because I have to do my due diligience to see if I want to lend them money.

For a partner to shorten their liablity, you can file something to limit liability (called a statement of dissociation) that limits this liabilite for 90 days after it is filed. It is filed at the state level.  By doing this, file with state, then it puts it on the lender, vendor to check and see if such a thing was filed. So if I’m a lender, I want to check to see if someone has filed this because I have to do my due diligience to see if I want to lend them money.

When you file stuff with state, you put people on “constructive notice”

Partners have the equal right to management (1 vote per partner), same to right to interst (equal), compensation =, right to inspection of books, and accouting- UNLESS YOU SAY OUTEHRWISE IN THE AGREEMENT!!!!

When a partner leaves, there has tobe a way to file the statmenet of dissocation otherwise you are liability

How can a gen partnership dissolve?

Can agree that the partnership will dissolve  after certain amounts of time.

Dissolution by acts!!

Under RUPA, ther partnerhips will  not die automatically if the partner does, you get a specific period of time to decide if you want to continue with partnership.

You can transfer your interst to get paid, but you can’t bring the creditor in a a new partner.

If a lean is put on the entity, then you can dissolve the partnerhip.

Dissolution by law-

Death or incompetnancy of a partner.

 Dissolution  by dcree- if partners argues then goes to court and can decide to dissolve.

If partner is adjudicated insance.

If a there is a new partner, then all new partners have to agree (unless the partnership agreement provides otherwise).

You can transfer your right to receive profits, but you can't transfer your managment stake, etc. 

You cannot bring the creditor/person who now receives the profits in as a partner.

1) pass through taxation

2) easy to create 

3) Partners can act as additional sources of capital

4) Partners share in losses

5) Flexiablity in appointing certain partners as managers and can be delegated the authority to make certain decisions by themselves

1) Unlimited personal liablity

2) Lack of Continuity

3) Difficult in transferring partnership interest

1) Name of partnership

2) Name and address of the partners

3) Recitals (simple statements that it is the intent of the parties to form a partnership).

4) Purpose- define the purpose of the partnerhsip- don't make too specific otherwise you can limit the growth ofbusiness

5) Address- the place of business of the partnership

6) Term- How long ther partnership will last

7) Financial provisions- what the initial conrtibutions will be; what will happen if additional capital is needed

8) Profitis and losses- if profits or losses will be shared or if they will be proportionate to contributions

9) management and control- what will the parnters voting power be (equal or protionate to contributions); if there will be a managing partner

10) Admission and withdrawal of new partners- how will new partners be admited and how withdrawal will occur.

11) Dissolution- What events can cause a dissolution of the partnerhips