Profits and Losses

Question 1

General Partnership Profits and Losses

Answer 1

All partners contribute something to the partnership, and, absent agreement to the contrary, profits and losses are divided equally, and losses are shared in the same ratio as profits are divided. Any partner can bind the partnership.

All partners are jointly and severally liable for all obligations of the partnership - contract or tort.

Each partner is personally liable for all partnership obligations, and if one partner is compelled to pay the entire obligation, he may seek indemnity from the partnership.

Question 2

Incoming Partner Liability

Answer 2

An incoming partner is not liable for any obligation incurred before their admission as a partner, except to the extent of the contributed property.

Question 3

Liability and Losses After Dissolution

Answer 3

A partnership is also bound by a partner’s contractual or tortious acts after dissolution if the party with whom the partner deals does not have notice of the dissolution.