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Revised Uniform Partnership Act § 404 (1997).
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1If a partnership agreement does not include any provisions about fiduciary duties, do the partners owe each other or the partnership any fiduciary ...
If a partnership agreement does not include any provisions about fiduciary duties, do the partners owe each other or the partnership any fiduciary duties?2Do partners have an obligation to act on behalf of the partnership rather than in their own interests?
Do partners have an obligation to act on behalf of the partnership rather than in their own interests?3What is the duty of care that partners owe the other partners and the partnership?
What is the duty of care that partners owe the other partners and the partnership?4Unless the partnership agreement itself provides otherwise, is the unanimous consent of all partners required to amend a partnership agreement?
Unless the partnership agreement itself provides otherwise, is the unanimous consent of all partners required to amend a partnership agreement?5Six people formed a general partnership to develop real property. After a number of setbacks, some of the partners realized that the project needed...
Six people formed a general partnership to develop real property. After a number of setbacks, some of the partners realized that the project needed a dedicated administrative advisor. After an extensive search, the partners identified an administrator, but she would join the partnership only as a partner. The partnership agreement was silent about the addition of new partners. The partners had a meeting, and five of the six partners voted to make the administrator a partner. Was this vote sufficient to make the administrator a partner?6Three friends formed a general partnership for landscaping services. The company’s profits were far higher than any of the partners had expected. O...
Three friends formed a general partnership for landscaping services. The company’s profits were far higher than any of the partners had expected. One day, two of the partners were discussing profit distributions and decide to expel the third partner to seize his share of the company’s profits before the next distribution. These two partners reviewed the partnership agreement and followed all the procedures in the agreement to expel the third partner without cause. The agreement contained no provisions regarding fiduciary obligations among the partners.Did the two remaining partners violate any fiduciary duties by expelling the third partner without cause?7Under the Revised Uniform Partnership Act (RUPA), if a general-partnership agreement does not address how to distribute profits among partners, how...
Under the Revised Uniform Partnership Act (RUPA), if a general-partnership agreement does not address how to distribute profits among partners, how are profits distributed among the partners?8How are partnership profits and losses distributed under the RUPA?
How are partnership profits and losses distributed under the RUPA?9A general partnership had three partners. The first partner contributed $200,000 to start the venture. The second partner contributed $75,000. The ...
A general partnership had three partners. The first partner contributed $200,000 to start the venture. The second partner contributed $75,000. The third partner contributed only $25,000 but managed the partnership. The partners all signed a general-partnership agreement. When it came time to distribute profits, the partners discovered that the partnership agreement did not have a provision setting out how the profits should be distributed among the partners. The partnership had $30,000 available to distribute to the partners. The jurisdiction applies the RUPA.What is the profit distribution to the third partner?10Two individuals agreed to start a term general partnership to build and sell a new apartment building. The first partner contributed $100,000 to th...
Two individuals agreed to start a term general partnership to build and sell a new apartment building. The first partner contributed $100,000 to the partnership. The second partner did not contribute any capital to the partnership but agreed to serve as a general contractor and manage the entire building process. The partnership agreement did not say anything about how losses would be allocated. Unfortunately, the real estate market declined. When the building finally sold, the partnership suffered a $100,000 loss, meaning the first partner had lost his entire investment. The jurisdiction applies the RUPA.Is the second partner obligated to reimburse the first partner for any part of this loss?11Do partners have rights in the management of the partnership business?
Do partners have rights in the management of the partnership business?12A general partnership was considering the following two proposals: (1) an amendment to the partnership agreement altering the required vote for par...
A general partnership was considering the following two proposals: (1) an amendment to the partnership agreement altering the required vote for partner expulsion and (2) the hiring of three professionals from a competing firm as new partners. The partnership agreement was silent about how many votes were needed for these transactions.Is a unanimous vote from the partners needed to approve either of these proposals?13Can a partnership agreement modify the duty of care?
Can a partnership agreement modify the duty of care?14Does an act of ordinary negligence breach a partner’s duty of care?
Does an act of ordinary negligence breach a partner’s duty of care?15A company was interested in buying a storage facility. The company’s general partners decided to purchase the first facility they looked at. The pu...
A company was interested in buying a storage facility. The company’s general partners decided to purchase the first facility they looked at. The purchase price for this facility was $100,000. The partners did not look at any of the other six facilities that are available, nor did they consult with an expert in the valuation of real estate regarding the purchase price. After the sale closed, the partnership’s business began to fail. The partnership became insolvent, and creditors discovered that the facility was actually worth only $20,000. The company’s general-partnership agreement provided that partners were not subject to the duty of care.Did the partners owe a duty of care when they purchased the facility?16A partner was tasked with making decisions about how to invest some partnership assets. The partner talked to a variety of financial advisors and d...
A partner was tasked with making decisions about how to invest some partnership assets. The partner talked to a variety of financial advisors and decided to invest in a group of high-risk, long-term investments. Unfortunately, many of the investments wound up failing. A few of the other partners were furious and retained a law firm to evaluate the partner’s decision-making process. The law firm concluded that the partner failed to use the care a reasonably prudent and careful person would use under similar circumstances and, therefore, was negligent. The partnership agreement did not modify the general duty of care.Did the partner breach the duty of care when she negligently purchased these poor investments?17What is the duty of loyalty owed by partners?
What is the duty of loyalty owed by partners?18Can a partnership agreement eliminate the duty of loyalty?
Can a partnership agreement eliminate the duty of loyalty?19A company’s general partnership agreement provided that the partners were allowed to compete with the partnership in buying commercial real estate....
A company’s general partnership agreement provided that the partners were allowed to compete with the partnership in buying commercial real estate. A vacant, commercially zoned lot in an extremely desirable part of town was suddenly listed for sale. The partnership was extremely interested in making a bid. However, during the assessment process, the owner of the warehouse accepted a bid from one of the partnership’s senior partners. The other partners were furious.Did the senior partner breach his duty of loyalty by competing directly with the partnership in buying this commercial lot?20A general partnership was interested in acquiring a local manufacturing facility. The partnership was unaware that the facility was owned by one of...
A general partnership was interested in acquiring a local manufacturing facility. The partnership was unaware that the facility was owned by one of the partnership’s junior partners. The junior partner was present during partner discussions regarding the facility but did not comment on the potential purchase. The partnership voted unanimously to buy the facility for the listed sale price.Did the junior partner violate a fiduciary duty?