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PARTNERSHIPS I: ELEMENTS/REQUIREMENTS: 1. 2. Association ( voluntary ) 3. Carry on business for some business purpose ( not a one time deal – n.b look at the time required to complete the deal) 4. As co-owners ( share in profits, pay out loss, raise capital to purchase business assets). 5. For profit ( look at intent) II: PARTNERSHIP AGREEMENTS: A. Not necessary: ( does not have to be formal – can be oral ) 1. 2. If the agreement is unenforceable, it does not necessarily destroy the partnership. B. Rules imposed on the Partnership, unless agreement to the contrary (varies by state) 1. Each partner is entitled to an equal voice in management. 2. Each partner is entitled to an equal share of the profits regardless of capital contribution. ( Must match agreed upon profit share ). 3. Each partner is expected to share in the losses, in the same proportion as the profits. 4. Books are kept in a central office. C. Rules imposed on the Partnership regardless of the agreement – (if the agreement is void, contrary or mala prohibita) 1. Each partner is an agent for partnership – protects the people who contract with the partnership. ( Partners are jointly liable for the debts of the partnership – regardless of the partners entering into the contract ) 2. Each partner is individually liable, without limit, for liability that the partnership cannot cover – this includes TORT liability. 3. Each partner has a fiduciary duty to the partnership and especially a duty not to compete. A partner cannot gain a personal benefit at the expense of the firm.
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III. DISSOLUTION Dissolution is a change in the relationship of the partners caused by any partner ceasing to be associated with the carrying on of the business. 1.
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This note was uploaded on 02/07/2012 for the course HADM 387 taught by Professor Sherwyn during the Spring '08 term at Cornell.

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