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4 Cards in this Set
- Front
- Back
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What is the default rule for the sharing of profits and losses?
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Profits are to be shared equally between the partners.
Losses follow the division of profits. If a partnership agreement provides for the division of losses but not profits, profits do not follow losses and are still divided equally. (323A.0401(b)) |
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What is a capital contribution?
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A capital contribution is capital, in the form of property or cash, provided by a partner for the benefit of the business.
Capital contributions are considered separate to the business' income/profits. |
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Upon dissolution, at what point are profits and losses divided between the partners?
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Profits and losses are divided once all third party creditors have been repaid, and all capital contributions have been returned to the partners.
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If a partner is insolvent, how are the losses he is responsible for to be covered?
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If a partner is insolvent, the other partners must meet the losses he is responsible for proportionally to the manner in which they share losses between themselves.
(§323A.807(c)) |
