Partnership

Question 1

when is a partnership formed

Answer 1

when 2 or more people carry on as co-owners for the purpose of making profit.

if there is profit sharing there is a presumption that there is a partnership

Question 2

what are partners in a partnership

Answer 2

agents that can bind the partnership. they have equal rights to bind the partnership
- disagreements require a majority vote
- extraodinary matters require a unanimous vote.

they are jointly and severably liable for partnership debts.

Question 3

partners have fiduciary duties

Answer 3

• must act in good faith with honesty
• also have the duty of loyality and care
• duty to account for any profits.

Question 4

Dissolution

Answer 4

• does not end the partnership
• it ends once winding up is complete.

Question 5

steps to ending a partnership

Answer 5

1. Dissociation- creditors are notified of the of the dissolution. others are entitled to newspaper notice. starts with notice from any partner.
2. winding up- partnership assests are liquidated and the creditors are paid.
3. termination- this is the true end of the partnership

Question 6

creditors with claims against the partnership

Answer 6

-can gain interest in the partnership (to profits not management or voting rights)
-must go after the partnership assets before going after the partners individually.