Upgrade to remove ads
Only $35.99/year

Ch. 37 Partnerships & LLPs

Terms in this set (44)

Partnership
An association of two or more persons who carry on, as co-owners, a business in which they
(1) share profits and losses,
(2) jointly own the business, and
(3) enjoy equal management rights
Uniform Partnership Act (UPA)
provides that a corporation may be "person" for purposes of a partnership, although some states' partnership statutes exclude corporations from owning partnership interests
Intent to associate
essential to partnership; someone with whom an existing partner does not intend to associate cannot become a partner.
laws governing partnerships
common law & statutory law
pass-through entity
a business entity that has no tax liability. the partnership itself pays no taxes and is responsible for filing an information return with the IRS
partner's profit
taxed as individual income
partnership agreement
A written agreement - sometimes called articles of partnership - that sets forth the rights and obligations of each partner with respect to the partnership
Partnership Duration
The partnership agreement may specify the duration of the partnership in terms of a date or the completion of some undertaking
partnership for a term
limited term. Any dissolution of the partnership prior to the term, without the consent of all of the partners, will leave the partner or partners responsible for the dissolution personally liable for any resulting losses
partnership at will
if there is a silent partnership agreement. any partner may dissolve the partnership at any time without incurring liability
Partnership by Estoppel
Whenever a third party has reasonably and detrimentally relied on the representation, by a partner, that a non-partner was part of the partnership, the non-partner is deemed to be the partnership's agent and the partnership is liable for his acts
Compensation
Unless otherwise agreed, partners do not receive a salary for any work they do for the partnership's benefit; rather, they are paid a share of the partnership's profits, plus a return of their initially-invested capital when the partnership terminates
Partnership Books
-Each partner has the right to receive, and a duty to produce, full and complete information concerning all aspects of partnership business.

-Each partner (including the personal representative of a deceased partner's estate) has the rights to inspect on demand and to copy all partnership books and records
Accounting
A partner may demand a formal accounting of the partnership's assets and liabilities to determine the value of her partnership interest
Partnership Property
includes all property acquired:
-by the partnership, and
-in the name of the partnership, provided that the instrument transferring title indicates the partnership's existence or the acquirer's capacity as a partner.
Sets with similar terms