II. Property Interests

Question 1

Partnership Property

Answer 1

How do you know who owns property?

1. PARTNERSHIP: property is presumed to belong to partnership if it (rebuttable presumption)
   
   1. is characterized as such in the partnership AGREEMENT
   2. acquired in the partnership NAME
   3. or acquired with partnership FUNDS
2. PARTNER: Property is presumped to belong to a partner if it’s acquired in his name WITHOUT PARTNERSHIP FUNDS even though the partnership uses it.
3. TITLE: IF real property is held OTHER THAN IN THE PARTNERSHIP’S NAME, it will not be deemed partnership property to the prejudice of an innocent person.

Question 2

RIghts in Partnership Property

Answer 2

1. PARTNERSHIP’S RIGHTS: totally unristricted rights (they own the property)
   
   • May use property as collateral on a loan
   • a creditor may attach the property
   • may alienate property
2. PARTNER’S RIGHTS: VERY LIMITED. Cna use partnership property only for partnership’s purposes
   
   • Right is non-transferrable to a 3P
   • Can use for personal uses ONLY if done with the partnership’s consent
   • Cannot use it as collateral for personal loan, even for your portion of ownership. Nor can creditor attach it to satisfy loan

Question 3

A Parner’s Economic Interest in the Partnership

Answer 3

• DEFINITION: Partner’s SHARE OF THE PROFITS
  
  • is TRANSFERABLE, just like any other financial asset. It does not make them a partner; it allows them the right to the PROFITS the partner has rights to.
  • Can deise the intrest in the property
  • a judgment creditor may attach the interest in the partnership