General Partnership

Question 1

General Partnership Creation

Answer 1

A General partnership is created when
1) two or more persons,
2) as co-owners
3) carry on a business for profit

• written agreement/formalities not required
• intent not required

Question 2

Presumption of General Partnership

Answer 2

A person who received a share of the profits of the business is presumed to be a partner.

Question 3

Exceptions to Presumption of Partnership

Answer 3

Not presumed if profits were received in payment of
1) a debt
2) wages as employee/independent contractor
3) rent
4) annuity or retirement benefit
5) interest/loan charges
6) sale of the goodwill of a business

Question 4

Personal Liability

general partners

Answer 4

General Partners are personally liable for ALL obligations of the partnership UNLESS otherwise agreed to or provided by law.

Question 5

UPA 1997 Liability

general partners

Answer 5

General Partners are jointly and severally liable for partnership obligations.

claimant can collect full amount from either

Question 6

UPA 1914 Liability

Answer 6

General partners are only jointly liable

claimant must join all partners

Question 7

Incoming Partner Liability

Answer 7

Incoming partners admitted into an existing partnership are not liable for obligations incurred prior to their admission.

Even if they have notice of a claim

Question 8

Judgment Against Personal Assets

Answer 8

Generally, a judgment creditor cannot collect against personal assets for partnership debt UNLESS:
1) judgment rendered against the partner
2) partnership assets are exhausted/insufficient