Law Office of Omar S. Anorga

General Partnerships

Today let’s briefly talk  about general partnerships -

Definition

A partnership is defined by the California Uniform Partnership Act of 1994 [Corp Code § § 16100 et seq.] as an association between two or more “persons” to carry on as co-owners a business for profit formed under Corp. Code § 16202, or a comparable law of another jurisdiction. The term “persons” is used in the Act to mean an individual, corporation, business trust, estate, trust, partnership, LLC, LP, LLP, association, joint venture, government, government subdivision, or any other legal or commercial entity. [Corp. Code § 16101(9)]

A “business” includes every trade, occupation and profession. [Corp. Code § 16101(1)]

General Partner’s Duties

Partners owe fiduciary duties such as:

• Duty of Loyalty – refrain from dealing with a party whose interest is adverse to the interest of the partnership and refrain from competing with the partnership for personal gain
• Duty of Care – refrain from engaging in negligent or reckless conduct
• Duty to act in good faith and fair dealing

Liabilities of a Partnership

Each general partner is deemed an agent of the partnership and has the authority to bind the partnership to an agreement with a third party. [Corp. Code § 16301(1)]

The partnership is also liable for any loss or injury caused to a person by the conduct of a partner acting in the ordinary course of business of the partnership. [Corp. Code § 16305(a)]

Liabilities of Partners

All general partners are jointly and severally liable for all partnership obligations unless otherwise agreed to. 16306(a) In a limited partnership, there is a general partner responsible for partnership obligations, and a limited partner responsible to the extent of his/her ownership interest in the partnership.

A person admitted to an existing partnership is not responsible for obligations existing prior to his admission. 16306(b)

If a general partner represents himself as a partner of an existing partnership to a third party, he is also personally liable to that party.

That’s all for today.  We’ll talk more partnerships in the foreseeable future. Take care.

For more information on the matter, please contact the Law Offices of Omar S. Anorga at 213 489-1271.  Thank you.

By using this blog site you understand that this information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice. This blog site should not be used as a substitute for competent legal advice from a licensed attorney in your state.

This entry was posted on Monday, April 12th, 2010 at 3:38 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.