If I buy something and then sell them to you, I am a sole proprietor - Originally everybody carries on business that way The partnership - The rules governing partnerships come from 3 sources: partnership legislation, contract law, and agency law. - Unlimited liability joint liability: Each partner is fully responsible for all the debts and obligations Responsibility is not in relation to the partner’s share in the partnership - Share profits equally they are free to define in any way they see fit - Require consultation among the partners – decision making Danger of divided authority - Partnership act a) When does a partnership exist? b) The relationship of partners to one another one another’s agent as well as agents of the firm owe fiduciary duty c) Relationship of partners to outsiders partners are responsible for one another’s mistakes – joint and several liability Each partner is individually as well as collectively responsible for the entire obligation d) How and why a partnership ends? Expiration Single venture or undertaking
Giving notice Death, insanity, or bankruptcy - Partner agreement - A way of diversifying the risk - Not separate legal things- legally the partnerships are just the partners who made them up - All the partners are reliable for the debts of the businesses Partnership Variations: - Limited Partnership - Limited liability partnership liability shield Corporations - Personal guarantee- personal assets will be at risk - Ultimately need a large amount of capital - In 1600s, the king passed the law in Eng. That allowed for the creation of corporations - Are separate legal entities – capable of carrying on the business in their own right - Could attract capital cause Investors would not be liable for the debts - Virtually all significant businesses take the corporation form The Franchise- duty of good faith and fair dealing Joint Venture- Strategic Alliance- joint research, tech sharing Distributorship or Dealership Sales Agency- fiduciary obligations Product Licensing- Lecture Notes: Partnership, limited partnership, limited liability partnership - Declaratory law: they simply declare what the law already was we have all these cases over hundreds of years, that result in a body of legal principles that apply to partnership. The partnerships act essentially take those principles and put them on paper. - 3 parts of partnership act that we want to concern:
You've reached the end of your free preview.
Want to read all 38 pages?
- Fall '09
- Tort Law