This is Business Law. I want to know answers please. 17. What is meant by the te
ID: 354461 • Letter: T
Question
This is Business Law. I want to know answers please.
17. What is meant by the term “joint and several liability” for your partners actions in a general partnership?
18. What decisions made by one partner, that are harmful to the partnership business, can the other partners sue the partner for that made the decision?
19. Can one partner make a decision without the consent of the other partners?
20. Can one of the partners in a general partnership be “forced out” against their will?
21. State at least three reasons partners in a general partnership should enter into a “buy-sell agreement.”
22. Name at least two (2) pros and two (2) cons to forming a business and entering into a franchise system to do so.
23. Assume that your group is a group of investors that have decided to invest together in an existing franchise system. (Pick a business that is an existing franchise that you think has the best chance of making money in Springfield, Missouri). Then state which type of franchise it is.
24. Describe three of the ways you franchise agreement may require you to pay the franchisor for your franchise rights.
Explanation / Answer
17) Joint and Several liabilities in a partnership means that the claimant may sue any one of the partners (usually the ones with more assets). If the claimant gets money from one partner, that partner can pursue other partners for their share of obligation. It means it is the responsibility of this partner to pursue others for their contribution
18) It is possible to sue the partner if a decision taken by him is harmful for business. This would fall under breach of fiduciary duty i.e. partner’s acts on his own best interest rather than what is right for the company. A partner must conduct business in best interest of the partnership.
19) There are two types of partnerships: General and Limited. In General partnership, all the partners are liable to business liabilities, all the partners have equal power and rights to business income. In this scenario one partner cannot make a decision without the consent of other partners. In Limited partnerships, the partners are usually investors who do not engage in the management functions or decisions of the business.
20) Partners can be forced out against their will or expelled using following ways provided these terms are laid out in the partnership agreement:
In case these terms are not laid out in the agreement, it is advisable to dissolve the partnership or buyout shares from the partner.
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