Undeclared Partnerships

Question 1

Undeclared partnerships:

Answer 1

Usually undeclared by default
“de facto partnership” or contractual partnership
Not really registered, got together and shared expensive
Group of people that work independently
If somebody sues, sues individual and not partners
No publicity
Partners have not done formal requirement like other partnerships.
Protection of third parties
-Not same requirements as other business partners (2250)

Question 2

Relevant Legislation:

Answer 2

• 2250 to 2266 CCQ
• Business rarely choose this partnership voluntarily
• Business is firstly established, becomes a UP when 3 elements exist
• but the partners did not satisfy the registration according to The Act Respecting the Legal Publicity of Enterprises.

Question 3

Third Parties

Answer 3

• UP exists to protect third parties
• Partners remain owners of the property that they contributed (2252)
• Enter into agreement with personal name
• Have personal obligations to third parties (2253)
• If one partner identifies by associating to another party, makes the partners of other party liable (2253 p2)
• Partners aren’t solidarily liable for debts, unless it was contracted for a service or operation

Question 4

Termination of the contract of UP

Answer 4

• With the consent of other parties
• expiry of term
• fulfillment of condition attached to the contract
• achievement of object
• impossible of achieving it (2258)

Question 5

Death of a partner
Term
Good faith

Answer 5

• UP will continue with legal reps or other partners (2259)
• No term in UP, can be terminated at any time with a written notice, good faith, good timing (2260)
• Other parties aren’t affected by the termination, good faith (2263)

Question 6

Termination and Liquidation

Answer 6

• A liquidator is appointed to liquidate assets of partnerships (2264)
• Partners are entitled to the property that they contributed/own (2265)
• Liquidator pays debts, reimburses contributions and partitions among the partners (2266)