You are the attorney for Dr. Bypass. Please explain to your client the following three types of business organization and the relative advantages and disadvantages to him of each:
I-1: Partnership
| Sharing of profits and losses | 4 points _______ |
| Equal unless otherwise provided | 4 points _______ |
| Participation in management | 4 points _______ |
| Unlimited liability | 4 points _______ |
| Further excellent discussion | 4 points _______ |
I-2: Limited partnership
| Liability limited | 4 points _______ |
| Except for contribution | 4 points _______ |
| May not manage | 4 points _______ |
| May not appear in firm name | 4 points _______ |
| Contract must be written and recorded | 4 points _______ |
I-3: Limited liability company
| May have continuity of life | 4 points _______ |
| May have centralized management | 4 points _______ |
| May have free transferability | 4 points _______ |
| May have limited liability | 4 points _______ |
| For tax treatment, any two of above | 4 points _______ |
Assume a commendam with Bypass as limited partner.
II-1: What steps must be taken in organizing the business to ensure that Dr. Bypass enjoys limited liability?
| Articles must be in writing | 4 points _______ |
| And filed with secretary of state | 4 points _______ |
| Limited partner's name not in firm name | 4 points _______ |
| Limited partner may not manage | 4 points _______ |
| But may vote on certain issues | 4 points _______ |
| And may serve as employee |
4 points _______ |
II-2: May the business be called "Justin Robichaud's"? "The Cardiovascular Cajun"? "The Robichaud-Bypass Café"? Is there a suffix?
| One general partner's name only is okay | 4 points _______ |
| Assumed name is fine | 4 points _______ |
| Limited partner's name not permitted | 4 points _______ |
| Unless also the name of general partner | 4 points _______ |
| If commendam, firm name must so state | 4 points _______ |
II-3: If the business opts for "The Cardiovascular Cajun," what must you prepare for your client with respect to this name in addition to articles of limited partnership? Would this step be necessary if the restaurant were a sole proprietorship?
| Trade name affidavit on assumed name | 4 points _______ |
| File with parish clerk of court | 4 points _______ |
| Necessary also if sole proprietorship | 4 points _______ |
| May also register trademark | 4 points _______ |
| With secretary of state | 4 points _______ |
II-4: Assume articles of limited partnership are prepared and properly recorded, and that partnership then takes title in partnership name to land. Assume further Robichaud owes Cynthia Creditor. What are creditor's rights to land, and would her rights be any different if the partners had first executed the articles, then bought land in partnership name, and then recorded their articles?
| Land belongs to partnership | 4 points _______ |
| Creditor may charge partner's share | 4 points _______ |
| Partner has 30 days to release | 4 points _______ |
| If unrecorded, land is partners' property | 4 points _______ |
| At least as to third-party creditors | 4 points _______ |
| Creditors may then seize property | 4 points _______ |
II-5: The articles provide that the labor of Robichaud is capitalized at 40 per cent and the money contribution of Bypass is capitalized at 60 per cent. If the articles of partnership are otherwise silent, how are the losses to be divided?
| Fifty-fifty | 4 points _______ |
| Discussion | 4 points _______ |
II-6: Bypass votes to admit a new limited partner and advises Robichaud to raise menu prices. Is Bypass now a general partner?
| Commendam partner may consult | 4 points _______ |
| Commendam partner may be surety | 4 points _______ |
| May vote on admission or expulsion | 4 points _______ |
| May vote on continuation or termination | 4 points _______ |
| Each other item on which may vote | 4 points _______ |
Various contracts are being signed in various ways. Who is bound? Assume the person signing does so within the actual or apparent course of business.
| III-1: | The Cardiovascular Cajun, a limited partnership | |
| by ________________________________, Agent | ||
Only Cardiovascular is bound |
20 points _______ |
| III-2: | _____________________________, agent for The Cardiovascular Cajun, a limited partnership |
|
Only Cardiovascular is bound |
20 points _______ |
| III-3: | The Cardiovascular Cajun | |
| _______________________________________ | ||
Both are bound |
20 points _______ |
Bypass is so enthused by a new recipe that, without permission of Robichaud, he sells the recipe to Burger King and turns the proceeds over to charity.
IV-1: Is the partnership bound by the sale? Why or why not?
| Bypass is limited partner | 6 points _______ |
| No actual authority | 6 points _______ |
| Not in usual course of business | 6 points _______ |
| Is recipe partnership or partner's property? | 6 points _______ |
IV-2: What, if any, are Chef Robichaud's or the partnership's remedies?
| Sue Burger King to annul sale | 6 points _______ |
| Sue Bypass for damages and accounting | 6 points _______ |
| Suit needs to be in equity | 6 points _______ |
IV-3: What, if any, are Burger King's defenses?
| Obviousness | 6 points _______ |
| Not a trade secret | 6 points _______ |
| Apparent (ostensible) authority | 6 points _______ |
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