Partnership Property/Profits
A, B, and C form ABC Partnership. A is authorized to manage the business. A uses partnership funds to purchase office furniture, but titles it in A’s own name. Who owns the furniture?
The Partnership
A and B are partners in an LLP. A commits a tort in the ordinary course of business. Later, C joins the partnership. Who is liable?
A and the partnership
A corporation is the general partner of an LP. The LP breaches a contract. Who is liable?
LP and the corporation
A transfers his transferable interest to T. T asks to inspect partnership records. Must the partnership allow it?
No
A, B, and C are partners with no agreement. A and B want to admit D as a partner. C refuses. Is D admitted?
No, unanimous consent among the partners is required to admit a new partner.
A, B, and C form a partnership. A contributes $60k, B contributes $20k, C contributes $20k. No agreement on profit sharing. They distribute $90k in profits. How is it split?
30k evenly among the partners
A partnership is sued for breach of contract and a judgment is entered against the partnership.What assets can the creditor reach?
The partnership's assets
In an LLP, A commits malpractice. Who is liable?
A and the partnership
A, B, and C are partners in the ABC Partnership. A transfers half of his transferable interest to T. No other changes. Who has voting rights?
A, B, and C equally
A dissociates. Afterward, A enters a contract with a third party who does not know of the dissociation. Is the partnership bound?
Yes, because A had apparent authority to bind the partnership.
Partner A uses partnership equipment for personal use without permission but returns it unharmed. Is this allowed?
No, the property must only be used for partnership purposes.
Partner A incurs a personal debt. The creditor seeks to seize partnership property. Is this allowed?
No. Partnership property belongs to the partnership, not the partners as individuals.
A general partnership converts into an LLP after entering a contract. The partnership breaches afterward. Who is liable?
The partnership and all of the partners.
A transfers his entire interest in the partnership to T. The remaining partners expel A. What is the result?
A is expelled; T has A's economic interest in the partnership.
A partnership has a fixed term. One partner wrongfully withdraws. Remaining partners disagree on continuing. What is the result?
The partnership is dissolved.
A transfers his entire transferable interest to T. The partnership later breaches a pre-transfer contract. Who is liable?
The partnership and all of the partners (not T).
Partner A dies and leaves his interest to his son. What does the son receive?
Economic interest only
Partnership has a 10-year term. A withdraws early. Is it wrongful?
Yes
Partner A commits a tort in the ordinary course of business. Afterwards, B withdraws. Victim sues. Is B liable?
Yes.
In a term partnership, half the partners vote to dissolve, half to continue. Is the partnership dissolved?
No, unanimous consent is required to dissolve a term partnership early.