PARTNERSHIP1. Formation a.Sharing of Profits – prima facie evidence of partnership.b.Capacity – Anyone who can enter a binding K can be a partnerc.Writing Necessary Only if partnership cannot be performed within one year.d.Limited Partnershipsi.Must registerii.At least one general and one limited partneriii.Limited partners liable only for investment; cannot manage partnership.2. Partners’ Liabilities to Third Parties e.Incoming Partner has no liability for partnership debts priorto joining, butmoney paid into partnership can beused to pay and debt.f.Outgoing Partner remains liable until notice given to all known and potential creditors.g.Partnership by Estoppeliv.Holding yourself out as partner makes you liable to those who rely on that.v.Holding another out as your partner makes them your agent.3. Partners’ Rights and Liabilities a.Duty of Loyaltyvi.Self-Dealingvii.Usurping Opportunitiesviii. Undisclosed Profits at partnership expenseb.Rights Against Other Partners (These are exclusive; cannot sue for breach, etc.)ix.Accounting – Seek payment from breaching partnerx.Contribution – A partner overpaying for debts can get contributions from other partners.c. Partnership Propertyxi.Ownership vests in surviving partners upon death.xii.Management right and partnership property belong to the partnership, thus cannot be assigned.xiii.Interests in share of profits and surplus are personal property, thus assignable.d. Division of Rights/Responsibility (Defaults; all modifiable by K)xiv. Management – Equalxv. Salary – None, unless winding up the partnershipxvi. Profits – Equallyxvii.Losses – Same as profits4.Dissolution, Priority in h.Outside Creditorsi.Inside Creditorsj.Capital Contributions – Must be paid, even if it results in a loss.k.Profits/Losses
AGENCY1.Principal Liability for Agent Torts a. Principal-Agent Relationshipxviii.Assentxix.Benefitxx.Controlb.Scope of Representation – Detour v. Frolic and Intent to Benefit Principalc. Special Situations:xxi.Sub-Agents – Generally no assent or control.xxii.Borrowed Agents – Generally no control.xxiii.Independent Contractors – Generally no control. 1. UNLESS ultra-hazardous activity OR estoppel2.Principal Liability for Agents’ Contracts a. Actual Express Authority (writing required if interest in land lasting more than 1 year) i. Revoked by unilateral act of either party OR incapacity/death of principal.b. Actual Implied Authorityxxiv.Necessityxxv.Customxxvi.Prior Dealingsc.Apparent Authorityd. Ratificationi. Principal cannot alter terms of K.e. EXCEPTION: If partially disclosed principal, Agent can be liable despite authority.3. Agent’s Duties to Principal a.Exercise Reasonable Careb.Obey Reasonable Instructionsc.Duty of Loyaltyxxvii.self-dealingxxviii.usurping opportunityxxix.secret profits
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CORPORATIONS1. Formation a.At least one adult human incorporator delivers certificate to the Dept. of State & hold organizational meeting.
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