Partnerships,

1
Business Organizations2009-2010 Lectures

• Partnerships,
• Corporations
• And the variants
• PROF. BRUCE MCCANN
• [phone]
• Lecture 3
• pp. 75-119

2
Aggregation vs Entity Theories

• Commonlaw (Aggregation)
• Partners held undivided but separate interests in
  property
• Partnership was not an entity distinct from its
  partners
• Withdrawing partner entitled to piece of each
  asset as is her estate
• Unanimous consent to admit new partner
• Partnership meant one exact constellation of
  partners. Any change resulted in dissolution.

3
Aggregation of Charged Colloidal Systems

• Aggregation

4
Aggregation or Entity Theories

• Under Uniform Partnership Act, 1997
• Partnership is an entity distinct from the
  partners
• Withdrawing partner has no interest in
  partnership assets but only right to receive pro
  rata share of the value of assets
• Entity may continue on despite withdrawal or
  death of partner

5
Under Entity Theory

• CAL. CORP. CODE 16502 California Code -
  Section 16502
• The only transferable interest of a partner in
  the partnership is the partner's share of the
  profits and losses of the partnership and the
  partner's right to receive distributions. The
  interest is personal property.

6
Under UPA, Modern P/S a Hybrid

• Still an aggregation of partners in sense that
• Each partner individually (jointly and severally)
  liable for debts
• Pass through entity, invisible to taxing
  authorities each partner pays on her own income
  from the partnership

7
SECTION 308.

• LIABILITY OF PURPORTED PARTNER.
• (a) If a person, by words or conduct, purports
  to be a partner, or consents to being represented
  by another as a partner, in a partnership or with
  one or more persons not partners, the purported
  partner is liable to a person to whom the
  representation is made, if that person, relying
  on the representation, enters into a transaction
  with the actual or purported partnership. If the
  representation, either by the purported partner
  or by a person with the purported partner's
  consent, is made in a public manner, the
  purported partner is liable to a person who
  relies upon the purported partnership even if the
  purported partner is not aware of being held out
  as a partner to the claimant. If partnership
  liability results, the purported partner is
  liable with respect to that liability as if the
  purported partner were a partner. If no
  partnership liability results, the purported
  partner is liable with respect to that liability
  jointly and severally with any other person
  consenting to the representation.

8
Formation

• CAL. CORP. CODE 16202
• (a)Except as otherwise provided in subdivision
  (b), the association of two or more persons to
  carry on as coowners a business for profit forms
  a partnership, whether or not the persons intend
  to form a partnership. (Emphasis added.)

9
Agency Revisited

• Actual authority that authority which principal
  has expressly granted to the agent or which agent
  reasonably believes was granted.
• Apparent authority that authority which
  principal has informed third party has been
  vested in agent
• Implied authority that authority reasonably
  required to accomplish the objectives of the
  agency