Nature of Partnership
A partnership is formed by individuals collectively, lacking a separate legal identity. Partners share joint and several liability for partnership debts, with recourse to personal assets if necessary.
Partners act as agents for each other in partnership contracts, with authority implied unless otherwise stated. Partnership agreements determine partners’ shares, typically equal unless specified otherwise. Companies can also be partners, and partnerships may exist between partnerships.
The maximum number of partners is 20, except for certain professions. Partnerships can include minors, mentally disabled persons, and bankrupt individuals, subject to specific conditions.
Partnership obligations are primarily payable out of partnership assets but may extend to personal assets if insufficient. Partnerships are not separate legal entities, so partners are not employees of the firm.
Partnership agreements should be clear on terms for partner withdrawal or changes to avoid disputes. Taxation for partnerships differs from companies, with partners taxed on profits when earned.
Contracts with partnerships are with the collective partners, not individuals, unless otherwise specified. Illegal partnerships or using unregistered business names can result in legal consequences, including fines or legal action for breach of trademark.
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