Uniform Partnership Act (1914)
UPA - 6 - Partnership Defined
(1) A partnership is an associate of two or more persons to carry on as co-owners a business for profit.
UPA - 8 - Partnership Property
(1) All property originally brought in the partnership stock or subsequently acquired by purchase or otherwise, on account of the partnership, is partnership property (2) Unless the contrary intention appears, property acquired with partnership funds is partnership property
UPA - 9 - Partner Agent of Partnership as to Partnership Business
(1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority . (2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership sunless authorized by the other partners
UPA - 21 - Partner Accountable as a Fiduciary
(1) Every partner must account to the partnership any benefit, and hold as trustee for it and profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property. (2) This section applies also to the representatives of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representatives of the law surviving partner
UPA - 15 - Nature of Partner's Liability
All partners are liable: (a) Jointly and severally for everything chargeable to the partnership under Sections 13 and 14
UPA - 22 - Right to an Account
Any partner shall have the right to a formal account as to partnership affairs (a) If he is wrongfully excluded from the partnership business or possession of its property by his co-partners (b) If the right exists under the term of any agreement (c) As provided by Section 21 (d) Whenever other circumstances render it just and reasoanble
UPA - 30 - Partnership Not Terminated by Dissolution
On dissolution the partnership is not terminated, but continues until the winding up of the partnership affairs is completed
UPS - 20 - Duty of Partners to Render Information
Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representation of any deceased partner or partner under legal disability
UPA - 29 - Dissolution Defined
The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.
UPA - 19 - Partnership Books
The partnership books shall be kept, subject to any agreement between the partners, at the principal place of business of the partnership, and every partner shall at all times have access to and may inspect and copy any of them.
UPA - 14 - Partnership Bound by Partner's Breach of Trust
The partnership is bound to make good the loss: (a) Where one partner acting within the scope of his apparent authority received money or property of a third person and misapplies is; and (b) Where the partnership in the course of its business received money or property of a third person and the money or property so received is misapplied by any partner, which it is in the custody of the partnership.
UPA 18 - Rules Determining Right and Duties of Partners
The rights and duties of the partners in relation to the partnership shall be determined subject to any agreement between them, by the following rules (a) Each partner shall be repaid his contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remains after all liabilities, including those to partners, are satisfied; and must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to his share of the profits (b) The partnership must indemnify every partner in respect to payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property (c) A partner, who in aid of the partnership makes any payment or advance beyond the amount of capital which he agreed to contribute, shall be paid interest from the date of the payment or advance (d) A partner shall receive interest on the capital contributed to him only from the date and repayment should be made (e) All partners have equal rights in the management and conduct of the partnership business (f) No partner is entitled to remuneration for acting in the partnership business except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs (g) No person can become a member of a partnership without the consent of all the partners (h) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners.
UPA - 37 - Right to Wind Up
Unless otherwise agreed by partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind u the partnership affairs; provided, however, that any partner, his legal representative or his assignee, upon cause shown, my obtain winding up by the court
UPA - 13 - Partnership Bound by Partner's Wrongful Act
Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefore to the same extent as to the partner so acting or omitting to act.
UPA - 32 - Dissolution by Decree of Court
(1) On application by or for a partner, the court shall decree a dissolution whenever (a) A partner has been declared a lunatic in any judicial proceeding or is shown to be of unsound mind (b) A partner becomes in any other way incapable of performing his part of the partnership contract, (c) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business (d) A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that is is not reasonably practicable to carry on the business in partnership with him. (e) The business of the partnership can only be carried on at a loss (f) Other circumstances render a dissolution equitable (2) On the application of the purchaser of a partner's interest under Sections 27 or 28 (a) After the termination of the specified term or particular undertaking (b) At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued
UPA - 4 - Rules of Construction
(1) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this act (2) The law of estoppel shall apply under this Act (3) The law of agency shall apply under this Act (4) This Act shall be so interpreted and construed as to affect its general purpose to make uniform the law of those states which enact it (5) This Act shall not be construed so as to impair the obligations of any contract existing when the Act goes into effect, nor to affect any action or proceedings begun or right accrued before this Act takes effect.
UPA - 38 - Rights of Partners to Application of Partnership Property
(1) When dissolution is caused in any way, except in contravention of the partnership agreement, each partner as against his co-partners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership agreement and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under Section 36(2), he shall receive in cash only the net amount due him from the partnership (2) When dissolution is caused in contravention of the partnership agreement the rights or the of the partners shall be as follows; (a) Each partner who has not caused dissolution wrongfully shall have: (I) All the rights specified in Paragraph 1 of this section (II) The right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the agreement (b) The partners who have no caused the dissolution wrongfully, if they desire to continue the business in the same name, either by themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may possess the partnership property, provided they secure the payment of bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his interest in the partnership at the dissolution, less any damages recoverable under clause 2(a)(II) of this section, and in like manner indemnify him against all present or future partnership liabilities (c) A partner who has caused the dissolution wrongfully shall have (I) If the business is not continued under the provision of paragraph 2(b) all the rights of a partner under paragraph 1, subject to clause 2(a)(II), of this section, (II) If the business is continued under 2(b) the right as against his co-partners and all claiming through them in respect to their interests in the partnership, to have the value of his interest in the partnership, less and damages caused to his co-partners by the dissolution, ascertained and paid him in cash, or the payment secured by bond approved by the court, and to be released from all existing liabilities of the partnership; but in ascertaining the value of the partner's interest the value of the good-will of the business shall not be considered
UPA - 31 - Causes of Dissolution
Dissolution is caused: (1) Without violation of the agreement between the partners: (a) By the termination of the definite term or particular undertaking specified in the agreement, (b) By the express will of any partner when no definite term or particular undertaking is specified, (c) By the express will of all the partners who have not assigned their interest or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking (d) By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners (2) In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time; (3) By any even which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership (4) By the death of any partner (5) By the bankruptcy of any partner or the partnership; (6) By decree for court under Section 32
UPA - 7 - Rules for Determining the Existence of a Partnership
In determining whether a partnership exists, these rules shall apply: (1) Except as provided by Section 16, persons who are not partners as to each other are not partners as to third persons. (2) Joint tenancy, tenancy in common, tenancy by the entireties, join property, common property, or part ownership does not itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property (3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived (4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but not such inference shall be drawn if such profits were received in payment: (a) As a debt by installments or otherwise. (b) As wages of an employee or rent to a landlord (c) As an annuity to a widow or representative of a deceased partner (d) As interest on a loan, though the amount of payment vary with the profits of the business (e) As the consideration for the sale of good will of a business or other property by installments or otherwise
UPA - 40 - Rules for Distribution
In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary (a) The assets of the partnership are (I) The partnership property (II) The contributions of the partners necessary for the payment of all the liability specific clause (b) of this paragraph (b) The liabilities of the partnership shall rank in order of payment as follows: (I) Those owing to creditors other than partners (II) Those owing to partners other than for capital and profits (III) Those owing to partners in respect of capital (IV) Those owing to partners in respect of profits (c) The assets shall be applied in the order of their declaration in clause (a) of this paragraph to the satisfaction of the liabilities (d) The partners shall contribute, as provided by Section 18(a) the amount necessary to satisfy the liabilities; but if any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, other other partners shall contribute their share of the liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
UPA - 18 - Rules Determining Rights and Duties of Partners
The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules: (a) Each partner shall be repaid by contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; and must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits (b) The partnership must indemnify every partner in respect of payments made and persona liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property (c) A partner, who in aid of the partnership makes any payment or advance beyond the amount of capital which he agreed to contribute, shall be paid interest from the date of the payment or advance (d) A partner shall receive interest on the capital contributed by him only from the date repayment should be made (e) All partners have equal rights in the management and conduct of the partnership business (f) No partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs (g) No person can become a member of a partnership without the consent of all the partners (h) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no act in contravention of any agreement between the partners may be done rightfully without consent of all the partners.
