B LAW 210 1st Edition Lecture 12 Outline of Last Lecture 1 Consent 2 Statute of Frauds Outline of Current Lecture I Business Entities Part 1 a Sole Proprietor b General Partnership c Limited Partnership Current Lecture Sole Proprietor o Starts doing a business alone o No writing required to form business o Has SOLE control of business o Termination Sells business Stops doing the business Death o Fully liable for all losses and liabilities o Owner pays business s taxes on personal return General Partnership o Oral or written agreement between 2 or more parties to carry on a business for profit Technically no writing is required o A general partnership can be assumed when two or more people carry on a business o Partners have a fiduciary duty to one another meaning they must disclose all financial aspects of the business and not co opt a financial advantage that is properly the partnerships The duty ends after a partner leaves o Each partner has an equal voice unless otherwise stated o Majority rules except decisions to sell or add a partner requiring an unanimous vote These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Termination Changes in partners dissolves old partnership and forms a new one Death withdrawal or bankruptcy will terminate partnership Many written partnership agreements provide that these events will not terminate a partnership A partnership for a specific purpose will dissolve automatically upon specified event o General partners all jointly and severally liable for all losses and liabilities o Partners pay business s taxes on personal return Limited Partnership o Must have a written agreement between 2 or more parties must have one general partner who makes business decisions limited partners do not have a vote Agreement must include name of business type of business address of agent names of addresses of each partner contribution of each partner duration of partnership rights of personnel changes and share of profit to be paid to each partner May be required to register with the state certificate of partnership o Limited partners may not participate in management they are merely investors but may see finances and participate in dissolution of partnership o General partners owe a fiduciary duty while limited partners generally do not o Only General partners can vote o Termination With respect to the general partner same rules Death withdrawal or bankruptcy of limited partner does not trigger a dissolution Limited partners receive their share of profits and their capital contributions before general partners receive anything A limited partnership may dissolve per the agreement or at the completion of a project Certificate of limited partnership may set out dissolution date o Limited partners are not liable for anything other than their capital contribution o General partners are jointly and severally liable for all losses and liabilities If a limited partner participates in the management of the business they will lose their limited liability protection o Partners pay taxes on their personal returns