It is important for a partnership to clearly state which of their assets are partnership property and what is the personal property of one or more of the partners. This is important for a number of reasons, including having an effect on the rights of creditors of the partnership and creditors of the partners individually.
The starting point for this issue is the general definition of partnership property which was set out in the Partnership Act 1890. Part of the Act states that “All [assets] originally brought into the partnership stock or acquired… on account of the firm or for the purposes of the partnership business, are called in this partnership property.”
Examples of partnership property
In the absence of any agreement to the contrary, the default rule is that property bought with partnership money is deemed to be partnership property.
To prevent disputes or confusion about ownership of property, it is advised that clear partnership property guidelines are provided as part of a Partnership Agreement prior to the formation of the partnership.
Partnership advice from Ralli Partnership law
From information on anything from partnership profits to exiting a partnership, Ralli Partnership Law can provide advice and guidance.
We can also help if you have been offered the chance to become a salaried partner, and need guidance on whether you should accept. You can contact us by using the relevant contact form on the website, or speak to one of our experienced advisors on 0161 832 6131.