MGT 2106 Lecture Notes - Lecture 26: Limited Liability Partnership, Limited Partnership, General Partnership
Document Summary
Chapter 26 sole proprietorships and franchises (only section 26-1) Chapter 27 all forms of partnerships (only sections 27-1 and 27-2) The law governing partnerships general partnership is not an entity. Each partner personally liable for debts of the partnership. Can cause an apparent partnership to be created by the conduct of two parties. Profits and losses split as agreed among the partners. If bob and mike agree to share the profits 50 50 but bob puts up 75% of the capital the losses are still shared 50-50. Importance of role of partnership agreement cannot be over emphasized and one must not be intellectually lazy in preparing the partnership agreement. Corporate law is much more developed in providing answers and hence serves as a governance function for a corporation. Banks generally want both partners to sign on behalf of the partnership unless one partner has specific authority from the other to sign.
