Business Law_Outline

Business Law_Outline - Business Law Outline Prelim 1 I...

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Business Law Outline- Prelim 1 I. Partnerships a. Elements Existence of a partnership is a question of the parties intent and is based upon all the facts and circumstances surrounding the formation of the relationship at issue Formalities of a written partnership are unnecessary to prove the existence of a partnership The party asserting the partnership has the burden of proving its existence (Uniform Partnership Act) Uniform Partnership Act and Revised UP Act: o Default Rules of Partnership 1. each P entitled to an equal voice in the management 2. each P entitled to an equal share of the profits, regardless of capital contributions 3. each partner shares in losses in same proportion as profits 4. Partnership books and records kept at central office o Rules applied Irrespective of Partnership Agreement : 1. Each P is agent to partnership 2. each P is personally liable w/out limit for liabilities of partnership 3. Each P owes other P’s fiduciary duty (higher duty, relationship of trust, disclosure) b. Rules applied to partnerships Section 6(1) of Uniform Partnership Act Have to show 5 things to be considered a partnership: a. an association b. of 2 or more persons c. to carry on business d. as co-owners e. for profit the receipt of a share of the business profits is prima facie evidence that a person is a partner in the business Chaiken v. Employment Security Commission (1971) : The mere existence of an agreement does not prove the existence of a partnership Uniform Partnership Law: a. the sharing of gross returns does not itself establish a partnership, whether or not the persons have a joint or common interest b. not a partner if share of profit was received in payment: i. as a debt by installments or otherwise ii. as wages of an employee or rent to a landlord iii. as an annuity to a widow or rep of deceased partner iv. as interest on a loan
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v. as the consideration for the sale of a goodwill of a business or other property by installments or otherwise in order to be compensated in excess of share of partnership profits, must show that partner went “beyond normal partnership functions” c. Dissolution of Partnerships dissolution: change in the relationship of partners caused by any partner ceasing to be associated in the carrying on of the business Ways for dissolution: i. Voluntary act ii. Judicial dissolution- court can order dissolution if there is evidence of a breach, incapacity/insanity, evidence partnership can only be operated at a loss iii. Operation of law- partner dies, partnership becomes bankrupt, illegality iv. Winding up: next step after dissolution: liquidation and distribution of assets If entitled to winding up (by voluntary withdrawal, judicial dissolution, operation of law):
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Business Law_Outline - Business Law Outline Prelim 1 I...

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