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Partnership: Difference between revisions
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*'''[[Joint and several liability]]''': This means ''every'' partner in a partnership is ''personally'' liable for ''the whole of the partnership’s debt and other liabilities. This is really a pragmatic solution that the common law evolved, to recognise that untangling the complicated web or inter-partner responsibilities for action taken in the partnership’s name should not be a creditor’s problem: that burden should rest with the partners to sort out among themselves. So, a partner so sued for the partnership’s liability may seek proportional recovery from her partners — assuming they are solvent — but none of this is the creditor’s problem. | *'''[[Joint and several liability]]''': This means ''every'' partner in a partnership is ''personally'' liable for ''the whole of the partnership’s debt and other liabilities. This is really a pragmatic solution that the common law evolved, to recognise that untangling the complicated web or inter-partner responsibilities for action taken in the partnership’s name should not be a creditor’s problem: that burden should rest with the partners to sort out among themselves. So, a partner so sued for the partnership’s liability may seek proportional recovery from her partners — assuming they are solvent — but none of this is the creditor’s problem. | ||
*'''No real formal criteria for a partnership to exist''': Whether one is in a partnership or not is not always clear: whereas a corporation must have memorandum and articles of association and be registered with Companies registry somewhere, a partnership can be ''[[deemed]]'' to exist by behaviour, needs to formal deed or document, let alone any regulatory registration. Partnerships are defined by their general characteristics: profit sharing, common ownership of property and contribution of capital, joint management of the enterprise — which are unusual things for merchants to do if they ''don’t'' intend to be partners, but all the same, given the potential gravity of [[joint and several liability]], the risk of inadvertent partnership creates a spectral fear in legal advisors which you will often see articulated through the boilerplate provision of a [[no partnership]] covenant. | *'''No real formal criteria for a partnership to exist''': Whether one is in a partnership or not is not always clear: whereas a corporation must have memorandum and articles of association and be registered with Companies registry somewhere, a partnership can be ''[[deemed]]'' to exist by behaviour, needs to formal deed or document, let alone any regulatory registration. Partnerships are defined by their general characteristics: profit sharing, common ownership of property and contribution of capital, joint management of the enterprise — which are unusual things for merchants to do if they ''don’t'' intend to be partners, but all the same, given the potential gravity of [[joint and several liability]], the risk of inadvertent partnership creates a spectral fear in legal advisors which you will often see articulated through the boilerplate provision of a [[no partnership]] covenant. | ||
These days many forms of organisation which were partnerships — or were ''required to be'' — are not, and partners have rapidly incorporated themselves into actual limited liability companies, or at least converted into [[limited liability partnership]]s, which look a lot more like corporate forms. | |||
{{sa}} | {{sa}} | ||
*[[ISDA netting categories]] | *[[ISDA netting categories]] | ||
*[[No partnership]] | |||
*[[close-out netting]] | *[[close-out netting]] | ||
*[[ISDA Anatomy]] | *[[ISDA Anatomy]] | ||
{{c|Netting Categories}} | {{c|Netting Categories}} | ||