ch36

West's Business Law with Online Research Guide, 9th Edition

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PARTNERSHIP: PROS AND CONS Advantages: partnerships are easy and inexpensive to form; the partners share all of the profits ; the partners may raise capital for the business out of their collective personal funds and from loans others are willing to make based on their collective or individual liability; and the partnership pays no income taxes – instead, a partner’s profit share is taxed as her individual income. Disadvantages: partners have personal liability for partnership obligations; and the partnership will not survive the death, disability, retirement, or disassociation of any partner. Ch. 36: Partnerships and Special Business Forms - No. 1 West’s Business Law (9th ed.)
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PARTNERSHIP: DEFINITION AND STATUS Partnership: An agreement by two or more persons to carry on, as co-owners, a business for profit. Courts often look to the following to determine whether a partnership exists: (1) sharing of profits and losses, (2) joint ownership of the business, and (3) equal right in the management of the business. The Uniform Partnership Act (UPA) provides that “persons,” for purposes of a partnership, includes corporations , although some states’ partnership statutes exclude corporations from owning partnership interests. A partnership, while treated as an aggregate of the individual partners for federal income tax purposes, may be treated as a separate entity for other purposes, such as bringing and defending lawsuits, bankruptcy, and ownership of property. Ch. 36: Partnerships and Special Business Forms - No. 2 West’s Business Law (9th ed.)
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Partnership Agreement: A written agreement sometimes called Articles of Partnership – that sets forth the rights and obligations of each partner with respect to the partnership. Partnership Duration: The partnership agreement may specify the duration of the partnership in terms of a date or the completion of some undertaking. A partnership whose term is so limited is a partnership for a term . Any dissolution of the partnership prior to the term, without the consent of all of the partners, will leave the partner or partners responsible for the dissolution personally liable for any resulting losses. A partnership agreement silent as to duration implies a partnership at will . Any partner may dissolve the partnership at any time without incurring liability. Partnership by Estoppel: Whenever a third party has reasonably and detrimentally relied on the representation, by a partner, that a non-partner was part of the partnership, the non-partner is deemed to be the partnership’s agent and the partnership is liable for his acts. Ch. 36: Partnerships and Special Business Forms - No. 3
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ch36 - PARTNERSHIP PROS AND CONS Advantages the partners...

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