by two or more persons
> The owners are all liable for legal actions and debts the company
may face personally
> Created by agreement, proof of existence and estoppel.
Characteristics of a General Partnership
In General: A form of business entity in which 2 or more co-owners
engage in business for profit. For the most part, the partners
own the business assets together and are personally liable
for business debts.
Sharing Profits: In the absence of a partnership agreement,
profits are shared equally amongst the partners. A partnership
agreement, however, will usually provide for the manner in which
profits and losses are to be shared.
Unlimited Personal Liability for Losses: Each Partner is, jointly
and severally, personally liable for debts and taxes of the partnership.
For example, if the partnership assets are insufficient to satisfy
a creditor's claims, the partners' personal assets are subject
to attachment and liquidation to pay the business debts.
Liability for a Partner's Debts: Each general
partner is deemed the agent of the partnership. Therefore,
if that partner was
apparently carrying on partnership business, all general partners
can he held liable for his dealings with third persons.
Liability for a Partner's Wrongdoing: Each partner
may be held jointly and severally liable for a co-partner's
tortious act (e.g. the misapplication of another person's money
Duration: Technically, a partnership terminates upon the death,
disability, or withdrawal of any one partner. However, most partnership
agreements provide for these types of events with the share of
the departed partner being purchased by the remaining partners
in the partnership.
Management and Control: In the absence of a partnership agreement,
each general partner has an equal right to participate in the
management and control of the business. Disagreements in the
ordinary course of partnership business are decided by a majority
of the partners. Disagreements of extraordinary matters and amendments
to the partnership agreement require the consent of all partners
Transferability: Unless otherwise provided in
the partnership agreement, no one can become a member of the
the consent of all partners. However, a partner may assign his
share of the profits and losses and right to receive distributions
("transferable interest"). Further a partner's judgement
creditor may obtain an order charging the partner's "transferable
interest" to satisfy a judgment.