Chapter XXI - Partnerships< Page 02
LIABILITY
In all matters rightly belonging to the business of a firm, any member has the right to act, and his acts will be held binding in law.
It is usual for partners active in a business to have each his separate duties, but even if these duties be designated in the articles of agreement, the outside business world is not supposed to know anything about the relative duties of the members of a firm as decided among themselves, so it is decided that each is empowered to act for his partners.
Under the usual articles, it is stipulated that while a dual partnership lasts, neither of the members shall make a note, sign a bond, or enter on any outside obligation as an individual without having secured the written consent of his business associates.
Each partner in a firm is liable with the others for all the business indebtedness.
If a firm fails, and the assets are found not sufficient to satisfy the creditors, they can levy for satisfaction on the private property of one or all of the partners.
If a member of a firm should become so far indebted, as an individual, that he cannot comply with his obligations, the interest he holds in the firm may be disposed of and applied to the payment of his debts.
This does not mean that the creditors may take or seize on any particular thing which the firm holds jointly, but that the debtor's interest in the concern may be so disposed of. All this the law has provided for.
A new partner admitted into a firm cannot be held responsible for the debts of the old concern.
HOW TO DISSOLVE
Every partnership agreement must provide for and distinctly state the period for which it is to continue.
At the end of the period named, the partnership is dissolved by limitation.
If the partnership is to continue, a new agreement must be made and signed.
On proper application, a partnership may be dissolved by an order of the court.
If a member who has become objectionable to his partners should not agree to a dissolution of the firm, the partners may apply to a court of competent jurisdiction for a decree of dissolution.
No member of a firm can withdraw at his own option. The consent of the other partners is necessary, and before he is released he must provide for his share of the obligations.
Notice of dissolution should be published, and notices sent to agents and others interested.
The following is the customary form of notice:
The copartnership heretofore existing between John Smith, Harry Roberts and Thomas Allen, under the firm name of Smith, Roberts & Co., is this day dissolved by mutual consent. John Smith. Harry Roberts. Thomas Allen. June 30, 1910.
SPECIAL PARTNERSHIPS
Limited or special partners are not recognized in some states.
This is a method of association whereby a person joins a partnership, putting in a sum agreed on, and which he may stand to lose as an investment. He is entitled to a _pro rata_ in the profits, but he cannot be held for the debts.
In some countries marriage is regarded as a civil contract or form of partnership, subject to dissolution by the courts.