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General Partnerships

July 28, 2015

Liability of Partners

Generally speaking, partners are jointly and severally liable, and each partner is personally and individually liable for the entire amount of all partnership obligations.  For example, in the farming partnership case we discussed above, each partner would be liable to any person with a claim against the partnership, e.g., if the supplier sues the partnership – each individual partner would be liable if the partnership fails to pay the supplier, because they are each a partner in a general partnership (as opposed to a farming contract), whether they intended to be a partner or not or whether they knew they were exposed to such liability. … Read the rest

General Partnerships

July 21, 2015

Formation of a General Partnership

In Post 1 of this series, we talked a little about general partnership and one of their most dreaded characteristics.  So if general partnerships exist, how do courts and others know?

Statutes often state that a partnership is an association of two or more persons to carry on as co-owners of a business for profit.  Unlike other business entities such as corporations or LLCs, which require filing of certain forms with the secretary of state, no formalities are required to form a general partnership. … Read the rest

General Partnerships

July 16, 2015

What Is a General Partnership and Why Is It Important for Business Owners To Know About It?

Two brothers agree to invest in several tracts of real property and make some money.  The brother who is an engineer is responsible for using his engineering skills to enhance the value of the properties; the other brother is responsible for marketing and administrative services, such as obtaining the title and paying taxes.  They do not enter into a written agreement.  Later, someone is injured on the property. … Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.