Sec. CHAPTER 79-PARTNERSHIP IN GENERAL SUBCHAPTER I-GENERAL PROVISIONS 2871. Definition of partnership. 2872. Shipowners. 2873. Formation of partnership. SUBCHAPTER II-PARTNERSHIP PROPERTY 2891. Definition of partnership property. 2892. Partner's interest in partnership property. 2893. Partner's share in profits and losses. 2894. When division of losses implied. 2895. Partner may require application of partnership property to payment of debts. 2896. What property is partnership property by presumption. SUBCHAPTER III-MUTUAL OBLIGATION OF PARTNERS 2921. Partners as trustees for each other. 2922. Good faith to be observed between partners. 2923. Mutual liability of partners to account. 2924. No compensation for services to partnership. SUBCHAPTER IV-RENUNCIATION OF PARTNERSHIP 2941. Renunciation of future profits exonerates from liability. 2942. Effect of renunciation. Subchapter I-General Provisions § 2871. Definition of partnership Partnership is the association of two or more persons, for the purpose of carrying on business together, and dividing its profits between them. 8 2872. Shipowners Part owners of a ship do not, by simply using it in a joint enterprise, become partners as to the ship. 82873. Formation of partnership A partnership can be formed only by the consent of all the parties thereto, and therefore a new partner may not be admitted into a partnership without the consent of every existing member thereof. Subchapter II-Partnership Property 82891. Definition of partnership property The property of a partnership consists of all that is contributed to the common stock at the formation of the partnership, and all that is subsequently acquired thereby. § 2892. Partner's interest in partnership property The interest of each member of a partnership extends to every portion of its property. § 2893. Partner's share in profits and losses In the absence of an agreement on the subject the shares of partners in the profit or loss of the business are equal, and the share of each in the partnership property is the value of his original contributions, increased or diminished by his share of profit or loss. 8 2894. When division of losses implied An agreement to divide the profits of a business implies an agreement for a corresponding division of its losses, unless it is otherwise expressly stipulated. § 2895. Partner may require application of partnership property to payment of debts Each member of a partnership may require its property to be applied to the discharge of its debts, and has a lien upon the shares of the other partners for this purpose, and for the payment of the general balance, if any, due to him. § 2896. What property is partnership property by presumption Property acquired with partnership funds is presumed to be partnership property. Subchapter III—Mutual Obligation of Partners § 2921. Partners as trustees for each other The relations of partners are confidential. They are trustees for each other within the meaning of chapter 161 of Title 7, and their obligations as such trustees are defined by that chapter. § 2922. Good faith to be observed between partners In all proceedings connected with the formation, conduct, dissolution, and liquidation of a partnership, a partner is bound to act in the highest good faith toward his copartners. He may not obtain any advantage over them in the partnership affairs by the slightest misrepresentation, concealment, threat, or adverse pressure of any kind. § 2923. Mutual liability of partners to account A partner shall account to the partnership for everything that he receives on account thereof, and is entitled to reimbursement therefrom for everything that he properly expends for the benefit thereof, and to be indemnified thereby for all losses and risks which he necessarily incurs on its behalf. § 2924. No compensation for services to partnership A partner is not entitled to compensation for services rendered by him to the partnership, except by special agreement. Subchapter IV-Renunciation of Partnership § 2941. Renunciation of future profits exonerates from liability A partner may exonerate himself from all future liability to a third person, on account of the partnership, by renouncing, in good faith, all participation in its future profits, and giving notice to the third person, and to his own copartners, that he has made a renunciation, and that, as far as may be in his power, he dissolves the partnership and does not intend to be liable on account thereof for the future. § 2942. Effect of renunciation After a partner has given notice of his renunciation of the partnership, he may not claim any of its subsequent profits, and his copartners may proceed to dissolve the partnership. CHAPTER 81-GENERAL PARTNERSHIP Sec. SUBCHAPTER III-MUTUAL OBLIGATIONS OF PARTNERS 3011. Profits of individual partner. 3012. Engagement in other business. 3013. Accounting for profits from unauthorized business. SUBCHAPTER IV—LIABILITY OF PARTNERS 3031. Liability of partners to third persons. 3032. Liability for each other's acts as agents. 3033. Liability of one held out as partner. 3034. Persons not liable as partners. SUBCHAPTER V─TERMINATION OF PARTNERSHIP 8051. Duration of partnership. 3052. Total dissolution of partnership. 3053. Partial dissolution. 3054. Partner entitled to dissolution. 3055. Notice of termination. 3056. Notice by change of name. SUBCHAPTER VI-LIQUIDATION 3081. Powers of partners after dissolution. 3082. Partners who may and may not act in liquidation. 3083. Powers of partners in liquidation; restriction regarding obligations. Subchapter I-General Provisions § 2971. Definition of general partnership A partnership that is not formed in accordance with the law concerning special partnerships, and a special partnership, as far only as the general partners are concerned, is a general partnership. Subchapter II-Powers and Authority of Partners § 2991. Power of majority of partners Unless otherwise expressly stipulated, the decision of the majority of the members of a general partnership binds it in the conduct of its business. § 2992. Authority of individual partner A general partner is agent for the partnership in the transaction of its business, and may do whatever is necessary to carry on the business in the ordinary manner, and for this purpose may bind his copartners by an agreement in writing. § 2993. Acts prohibited to individual partners A partner, as such, may not: (1) make an assignment of the partnership property or any portion thereof to a creditor, or to a third person in trust for the benefit of a creditor, or of all creditors; (2) dispose of the good will of the business; (3) dispose of the whole of the partnership property at once, unless it consists entirely of merchandise; (4) do any act which would make it impossible to carry on the ordinary business of the partnership; (5) confess a judgment; (6) submit a partnership claim to arbitration; or (7) do any other act not within the scope of section 2992 of this title unless his copartners have wholly abandoned the business to him or are incapable of acting. § 2994. Effect of partner's acts in bad faith A partner is not bound by any act of a copartner, in bad faith toward him, though within the scope of the partner's powers, except in favor of persons who have in good faith parted with value in reliance upon that act. Subchapter III-Mutual Obligations of Partners § 3011. Profits of individual partner All profits made by a general partner, in the course of any business usually carried on by the partnership, belong to the firm. § 3012. Engagement in other business (a) Except as provided in subsection (b) of this section, and section 3011 of this title, a partner may engage in any separate business. (b) A general partner who agrees to give his personal attention to the business of the partnership may not engage in any business which gives him an interest adverse to that of the partnership or which prevents him from giving to the business of the partnership all the attention which would be advantageous to it. § 3013. Accounting for profits from unauthorized business A general partner transacting business contrary to the provisions of this subchapter may be required by any copartner to account to the partnership for the profits of such business. Subchapter IV-Liability of Partners § 3031. Liability of partners to third persons A general partner is liable to third persons for all the obligations of the partnership, jointly with his copartners. § 3032. Liability for each other's acts as agents The liability of general partners for each other's acts is defined by chapter 75 of this title on agency. § 3033. Liability of one held out as partner Anyone permitting himself to be represented as a partner, general or special, is liable, as such, to third persons to whom the representation is communicated, and who, on the faith thereof, give credit to the partnership. 8 3034. Persons not liable as partners Except as provided by section 3033 of this title, a person is not liable as a partner who is not a partner in fact. Subchapter V-Termination of Partnership § 3051. Duration of partnership If no term is prescribed by agreement for its duration, a general partnership continues until dissolved by a partner or by operation of law. § 3052. Total dissolution of partnership A general partnership is dissolved as to all the partners by: (1) lapse of the time prescribed by agreement for its duration; (2) the expressed will of any partner, if there is no such agreement; (3) the death of a partner; (4) the transfer to a person, not a partner, of the interest of any partner in the partnership property; (5) war, or the prohibition of commercial intercourse between the country in which one partner resides and that in which another resides; or (6) a judgment of dissolution. § 3053. Partial dissolution A general partnership may be dissolved, as to himself only, by the expressed will of any partner, notwithstanding his agreement for its continuance, subject, however, to liability to his copartners for any damage caused to them thereby, unless the circumstances are such as entitle him to a judgment of dissolution. § 3054. Partner entitled to dissolution A general partner is entitled to a judgment of dissolution when: (1) he, or another partner, becomes legally incapable of contracting; (2) another partner fails to perform his duties under the agreement of partnership, or is guilty of serious misconduct; or (3) the business of the partnership can be carried on only at a permanent loss. 3055. Notice of termination The liability of a general partner for the acts of his copartners continues, even after a dissolution of the copartnership, in favor of persons who have had dealings with and given credit to the partnership during its existence, until they have had personal notice of the dissolution; and in favor of other persons until the dissolution has been advertised in a newspaper printed in English and of general circulation in the Canal Zone, to the extent in either case to which the persons part with value in good faith, and in the belief that the partner is still a member of the firm. § 3056. Notice by change of name A change of the partnership name, which plainly indicates the withdrawal of a partner, is sufficient notice of the fact of the withdrawal to all persons to whom it is communicated; but a change in the name, which does not contain such an indication, is not notice of the withdrawal of any partner. Subchapter VI-Liquidation § 3081. Powers of partners after dissolution After the dissolution of a partnership, the powers and authority of the partners are such only as are prescribed by this subchapter. § 3082. Partners who may and may not act in liquidation (a) Except as provided in subsection (b) of this section, any member of a general partnership may act in liquidation of its affairs. (b) If the liquidation of a partnership is committed, by consent of all the partners, to one or more of them, the others have no right to act therein; but their acts are valid in favor of persons parting with value, in good faith, upon credit thereof. |