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PARTNERSHIPS AND LLPs - Coggle Diagram

- - - - 1. New Partners
        
        NOT liable for debts incurred before they joined
        
        LIABLE after retiring for debts incurred whilst they were a partner (unless they novate agreement with creditor consent)
      - 2. Former Partners
        LIABLE for debts incurred after they left by 3P unless 3P has been notified of change by:
        
        ACTUAL NOTICE = if they dealt with partner before departure
        
        CONSTRUCTIVE NOTICE = if they did not deal with partner before departure published in London Gazzette
        
        NOT LIABLE for debts to 3P who did not know them to be a partner
      - 3. Persons who have held themselves out as a partner
        LIABLE if they have:
        
        Made representation to 3P that they are a partner
        
        3P believes representation and takes action (supplies goods to partnership
    - - Contractual = all partners are jointly liable for debts + obligations incurred whilst they were a partner
        
        Tortious = partners are jointly + severally liable
  - - - 1. Partners consent with agent's act
        
        IF all partners consent for firm to enter into contract + have given actual / express / implied authority = FIRM IS BOUND
      - 2. Partners do not consent with agent's act
        a. Power of a partner to bind the firm against the others' wishes
        
        IF contract to carry on business of the kind carried on by firm OR in usual way = BOUND
        
        IF 3P knew partner was not authorised to enter contract OR did not believe they were a partner = NOT BOUND
        
        b. Common law authority: power of a non-partner to bind the firm against the partners' wishes
        
        IF agent has apparent authority: firm allows representation to 3P that they have authority to bind firm + 3P relied on representation = FIRM IS BOUND as that person is held out as partner
- - - - Private document with procedures + arrangements agreed by members
        
        NOT obliged to have one - if not 2001 regulations apply
        
        No memorandum / Articles
        
        No formal management structure
    - - Members share equally in capital and profits
        
        LLP must indemnify its members for payments made and personal liabilities incurred
        
        Every member may take part in management
        
        NO remuneration entitlement
        
        No person can become a member or assign their membership without the consent of all members
        
        Ordinary decision making may be by the majority of the members
        
        Books and records of the LLP must be available for inspection by the members at the registered office
        
        Each member must give true accounts and full information of all things affecting the LLP
        
        Member (without consent) carrying on similar business must give profits to LLP
        
        Member has a duty to account for benefits derived from transactions with the LLP and its business or property
        
        NO implied power of expulsion of a member by the majority
- - - - Commencement + duration
        
        Fixed term OR may be terminated by provision
        
        Date setting out when rights + obligations in agreement will commencee
      - Name + place of business
        
        CANNOT have: Ltd / Plc / LLP / offensive name / existing trademark
      - Partnership property
        PP = property brought into partnership / with partnership money
        
        If asset = PP is factual question
        
        Each partner owns share in partnership property
      - Shares in income and capital and profits and losses
        
        Parterns share equally in capital + profits of business
        
        Partners contribute equally to losses even if contributed to capital unequally
      - Drawings / Salary
        
        Partners can take drawings out of income profits
        
        NO entitlement to salary unless expressly set out
      - Work input and roles + limits on authority and management
        
        Every partner may take part in the management but not required to
        
        Agrement should set out management requirements
      - Decision making
        Partnership decisions = MAJORITY BUT these need unanimity:
        
        Changes to partnership business nature
        
        Introducing new partner
        
        Expelling partner (unless spreviosusly agreed that majority can do so)
        
        Varying rights + duties of partners in PA 1890 such as:
        
        If partner leaves = partnership is dissolved > once they start business again a new firm is formed
        
        Non-compete clauses = partners cabbie compete with firm > if they do their profits have to go to firm
        
        Restrictions on outgoing partners: cannot compete /solicit/ deal