What exactly is partnership property, and why is it so important that your partnership fully understands the workings of this area of partnership law? Ralli Partnership Law explains why it is vital for partnership property to be clearly defined, and what can happen should this key component of a partnership agreement be ignored.
Partnership property is an essential element of a partnership agreement, with a failure to clearly specify the ownership of key partnership items having potentially serious consequences.
What is partnership property?
Personal property can be contributed to a partnership, becoming partnership property unless an alternative arrangement has previously been made. In addition to this, if members of partnership obtain property using partnership assets, this property will be presumed as partnership property. Unless otherwise agreed, individual partners may not sell or assign partnership property without the full consent of their fellow members.
Why is partnership property problematic?
If partnership property is not correctly defined, the consequences of the partnership having to wind up could be devastating. If a partner is forced to leave the partnership due to legal or health reasons, the entire partnership must be dissolved. With a strong partnership agreement, this is not an issue and the partnership can usually be reformed with the remaining members.
In the dissolution and winding up of a partnership, if partnership property is not clearly defined within your partnership agreement, assets could potentially be lost or seized. For partners who have put financial or material assets in to the partnership, the loss of these contributions can be highly damaging.
Getting the advice you need
Ralli Partnership Law are experts in every aspect of partnership law, and can advise you on the best way to ensure your partnership agreement is watertight, helping to prevent issues arising relating to the ownership of partnership property. To get in touch with one of our experts, call 0161 832 6131 or use the contact section of the website.