General Partnerships

A General Partnership is formed when two(2) or more co-owners engage in business activities or transactions. The partners own the business assets jointly, unless otherwised specified within the Partnership Agreement.

A. Liability

Unlimited Personal Liability

Each partner is, jointly and severally, responsible for the debts and taxes of the partnership.

If the assets of the partnership are insufficient to satisfy the debts of the partnership, the

partners personal assets may be attached or liquidated.

Liability for Co-partner's debts

Each partner can be held responsible for each other partners business activities and

dealings with third parties.

Liability for a Co-Partner's wrongdoing

Each partner can be held jointly and severally responsible for a co-partner's wrong-

doing or tortious act. A tortious act is the misapplication of another person's property.

B. Duration

A General Partnership terminates upon the death, withdrawal or disability of a partner. However, most partnerships have a Partnership Agreement that allows the remaining partners to purchase the ownership of the departed partner.

C. Management

Each partner has an equal right to participate in the management and control of the business, unless otherwise indicated within the Partnership Agreement. Disagreements throughout the ordinary course of business are resolved by a majority vote among partners.

D. Transferability

No one can become a partner without the consent of all partners, unless otherwise provided for within the Partnership Agreement. However, a partner may lose their share of the profits and losses and their right to receive distributions. For example, a partner's creditor may obtain an order charging the partner's "transferable interest" to satisfy a judgement.

E. Profits

Profits are disbursed in the manner indicated within the Partnership Agreement. However, in the absence of a Partnership Agreement, profits are disbursed in equal parts among the partners.

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