Book Opener

Social StudiesMost people areinterested in makingmoney. One way to makemoney is to join aninvestment club. Investmentclubs are groups ofmen, women, and teenswho study, research, andinvest regularly in thestock market. Mostinvestment clubs areorganized as generalpartnerships.The club’s income orlosses are reported onthe individual member’stax return.Research ActivityUsing the library orInternet, researchinvestment clubs. Ingroups of four, create apartnership agreementfor a new investmentclub that you might liketo organize.If the business is insolvent, its assets must be sold to pay the creditors.In addition, the partners are individually liable for any unpaidbalance that the sale of the assets will not cover. If both the businessand one or more of its partners are insolvent, liability for debts is distributeddifferently. The firm’s creditors have the first claim on the partnership’sassets; the personal creditors of the individual insolventpartners have first claim on the insolvent partner’s personal assets.The Revised UniformPartnership ActSince the UPA was written in 1914, it has undergone extensiverevision. The revision process resulted in a new variation of the act,which is referred to as the Revised Uniform Partnership Act (RUPA).This new act has already been adopted in many states. As a result,it is a good idea to check the current status of the UPA in your homestate. Some of the major revisions that are now found in the RUPAinclude the elimination of the concept of tenancy in partnership and theestablishment of a way to file a statement of authority with the stategovernment.Registered Limited LiabilityPartnershipsIn recent years a new type of partnership, generally referred to as aregistered limited liability partnership (RLLP) , has been created.A RLLP is designed to eliminate a major disadvantage of the generalpartnership, namely, joint and several liability. Under terms of a statutepermitting the formation of RLLPs, partners can escape joint and severalliability for the torts, wrongful acts, negligence, or misconduct ofother partners by registering with the appropriate state office. The registrationstatement usually includes the following information:llllllThe RLLP’s name (Usually, the name must include either theexpression Registered Limited Liability Partnership, the wordsLimited Liability Partnership, or an abbreviation such as RLLPor LLP.)The purpose of the partnershipThe number of partners in the partnershipA statement of the intent to form an RLLPThe address of the partnership’s main place of businessThe name and address of a statutory agent for service of processAll the partners, or at least the partners holding a majority interestin the partnership, must file the statement. The registration statementmust be updated annually. RLLPs are to be taxed as general partnerships.598 Unit 6: Starting a Business