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Notes- Chapter 36

Notes- Chapter 36 - Chapter 36 Partnerships and Limited...

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Chapter 36- Partnerships and Limited Liability Partnerships Partnership- 2 or more persons involved in a business organization; when 2 or more persons carry on a business for a profit that arises from an agreement that is expressed or implied Basic Partnership Concepts Partnerships are governed by both statutory and common law. Agency Concepts and Partnership Law - Relationship between the 2 partners is similar to that of an agency relationship. However it differs from an agency relationship in that the agent in an agency relationship doesn’t have ownership interest in the business, nor does he or she obligated to bear a portion of ordinary business losses. The Uniform Partnership Act - The UPA governs the operation of partnerships in the absence of express agreements When does a Partnership Exist? - UPA definition: an association of 2 or more persons to carry on as co-owners a business for profit. - Intent key element of a partnership; one cannot join a partnership unless other partners consent. - 3 essential elements of partnership implicit in the UPA’s definition o A sharing of P & L o Joint ownership of the business o Equal right to participate in the management of the business Joint Property Ownership and Partnership Status - Joint ownership of property and sharing of profits doesn’t necessarily prove the existence of a partnership, but sharing both profits and losses usually does. Entity versus Aggregate - UPA clearly states that “a partnership is an entity”; however in some circumstances a partnership is treated as an aggregate of the individual partners. For instance, for federal income tax purposes, a partnership is not a taxpaying entity. Partnership Formation
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Agreements can be made: oral, written, or implied by conduct. However, some must be made in writing (deals in tr4ansfer of real property) The Partnership Agreement - The partnership agreement is called the articles of partnership . It can virtually be on anything, so long as the terms are not illegal. Duration of the Partnership - Partnership for a term- when a specified date is designated - Partnership at will- when no fixed time duration is specified.
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Notes- Chapter 36 - Chapter 36 Partnerships and Limited...

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