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Partnership • General Partnerships
PT#014
Legal Definition
Note that each level of priority must be fully satisfied before beginning the next level:
First, the partnership must pay all creditors, including all outside trade creditors and partners who have loaned money to the partnership.
Second, the partnership must repay all [capital contributions](tooltipId:519) paid by the partners.
Third, the partnership distributes profits, if any, in equal shares (unless there is an agreement to the contrary).
First, the partnership must pay all creditors, including all outside trade creditors and partners who have loaned money to the partnership.
Second, the partnership must repay all [capital contributions](tooltipId:519) paid by the partners.
Third, the partnership distributes profits, if any, in equal shares (unless there is an agreement to the contrary).
Related Concepts
Can a partner transfer or share their right to manage the company?
Do agency principles apply to partners of a general partnership?
How are existing, new, and retiring general partners liable for debts?
If a partner wishes to dissociate from a general partnership, how can the partnership avoid dissolution?
What are the consequences of a partner who dissociates in breach of the partnership agreement?
What are the most common acts of dissociation that cause dissolution?
What common general rights issues are tested on exams?
What duty is owed between general partners, and what is the remedy for breach?
What is a general partnership and how does it form?
What is liability by estoppel?
What is required for a partner to transfer ownership of specific partnership assets?
What is the winding up period?
When liquidating a general partnership, how do you determine who owns what property?
