BEC Page 2
Actual authority includes all authority that a principal expressly gives to an agentplys any authority that can reasonably be implied from the express grantii.
Apparent authority as a result of being named a partner. It cannot be limited byresolutions or instructions of which the third party is unawared.
artnership may expand or curtail a partner’s authority to enter into transactions on
behalf of the partnership by filing a statement of authority with the secretary of state
*The filing of a limitation does not give third parties constructive knowledge of the limitation
Dissociation: does not necessarily cause a dissolution and winding up of the business of thepartnershipi.
Wrongful partner is liable for damages cause by the dissociationii.
Actual authority ends, but apparent authority ends until third parties are givennoticeiii.
Dissociated partner’s power to bind partnership continues for 2 year unless notice
has been giveniv.
Dissociated partner is liable for debts incurred prior to dissociation unless releasedby the creditors; is not liable for debts incurred after dissociation if notice filed withstate. *
An incoming partner is not personally liable for debts incurred by the partnership before he became a partner, but any financial contribution the incoming partner made to partnership property may be used to satisfy old debts
Dissolution: business is wound up and then the entity is terminatedOrder of distribution of assets:1.
Pay creditors/split losses3.
Return of capital/split losses4.
All partners have
to share in the profits of the partnership unless an agreementprovides; the partners share losses in the same manner as they share profits8.
Rights of partners:a.
Rights in partnership property: the partner has
no right to possess or transfer
etc.) except for partnership purposes. The property is not subject to personal creditors’claims or alimony. It is subject to a surviving partner’s survivorship interest
Rights in partnership interest: a transfer of partnership interest does not make the assigneea partner (that can be done only with the consent of all of the partners). The transferee has
no power to manage the partnership, inspect the partnership’s
books and records, vote, etc.
the assignee’s only
right is to get whatever distribution the assignor would have gotten. *
thesame rule applies to a creditor with a charging order and an heir who receives a deceased
Duties and legal obligations of partners:a.
Each partner personally liable for all partnership obligations within the scope of the business
and even if you didn’t personally authorize it.
The partners’ liability is
joint and several (individual)
, whether the obligations arise incontract o tort. Each partner is personally and individually liable for the entire amount of allpartnership obligations.
Limited Liability Partnership (LLP):
The partners are not personally liable for acts of fellow partners, employees or agents; notpersonally liable for debts and contractual obligations