test_1_bus_law_2 - Partnership Law - Partnership = an...

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Partnership Law - Partnership = an association of 2 or more persons to carry on as the co-owners of the business for a profit - Partnership Law is based on Contract Law and Agency Law -- Contract Law – 5 Basic Test: (1) Offer (2) Acceptance (3) Consideration (4) Capacity (5) Legality -- Agency Law – a Fiduciary Relationship, all partners owe a duty of absolute, undivided loyalty to their partners - The Duration of the Partnership is Immaterial - Joint Venture – one transaction, W and Alfred purchase a baseball card and 2 minutes later sell it for a profit…in those 2 minutes they are partners The KEY characteristic to Partnership Law = partners are Jointly and Severally liable for any and all claims, liable both as a group and as an individual -- W , X , and Y form a partnership ----- W is worth $1.98, X is worth $2.98, and Y is worth $25 million, the Assets of the Partnership are worth $300,000 --the partnership has a claim against it for $3.3 million --each person is responsible and liable for the full amount of that claim --the claim would wage out the $300,000 of the companies Assets, so the remaining balance would be expected to be paid out by the partners --important to know your partners assets in case a claim arises, because in this case Y would have to pay the whole amount if the other partners are judgement proof --if W , X , and Y formed a corporation with the same circumstances, then they are not liable for the claim individually ----- the Corporation is a Legal Entity , a Partnership is not a Legal Entity , also there is much greater separation between management and ownership of a corporation --if W begins his own business and decides to Incorporate it and he owns all of the stocks of W Corporation……. . W has a $100 million in Assets and W Corporation has $500,000 in Assets……. .there is a claim against W Corporation for $2.5 million --------- the claim can collect from the Assets of W Corporation but not against W for the difference because the Stockholder (W in this case) is protected - EXCEPTIONS to a Partnership NOT being a Legal Entity (1) a Partnership in NC has the power to hold title to Real Estate in the name of the Partnership (2) in NC, a Partnership can sue and be sued in the name of the Partnership
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Contract Law and relationship to Partnerships --W enters into a contract for the sale of a car for $15,999 to a 16 year old ----- the contract is Voidable because the 16 year old does not have contractual capacity, meaning the 16 year old has the right to get out of the contract up until the age of 18 --W enters into a contract with a 16 year old in a Partnership stating that each will make a Capital Contribution of $100,000 and be in the Partnership for 10 years ……… 6 months after entering into the Contract the Assets total $500,000 and the 16 year old wants to get out of the contract; therefore, each will get their Capital Contribution back and split the profits…….OR………after 6 months they have debt of $17 m and Assets of $200,000; in this
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This note was uploaded on 01/31/2011 for the course BADM 212 taught by Professor Witherspoon during the Spring '10 term at Campbell University .

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test_1_bus_law_2 - Partnership Law - Partnership = an...

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