Partnership
What does "Partnership" mean in law?
A general partnership is an association of two or more persons who carry on a business as co-owners for profit, formed by agreement (express or implied) without any filing requirement. Under the Uniform Partnership Act and the Revised Uniform Partnership Act, each partner is an agent of the partnership and has the authority to bind the partnership in the ordinary course of business, and all general partners bear joint and several personal liability for the partnership's obligations. Partners owe fiduciary duties to each other, including the duties of loyalty and care, as underscored by Judge Cardozo's famous articulation in Meinhard v. Salmon that partners owe each other the highest duty of good faith. Partnerships are taxed as pass-through entities, with income and losses flowing through to individual partners' tax returns.
Definition
A general partnership is an association of two or more persons who carry on a business as co-owners for profit, formed by agreement (express or implied) without any filing requirement. Under the Uniform Partnership Act and the Revised Uniform Partnership Act, each partner is an agent of the partnership and has the authority to bind the partnership in the ordinary course of business, and all general partners bear joint and several personal liability for the partnership's obligations. Partners owe fiduciary duties to each other, including the duties of loyalty and care, as underscored by Judge Cardozo's famous articulation in Meinhard v. Salmon that partners owe each other the highest duty of good faith. Partnerships are taxed as pass-through entities, with income and losses flowing through to individual partners' tax returns.
Example
When two lawyers agreed to split fees and share office space while jointly representing clients, a court found they had formed a general partnership, making each personally liable for a malpractice judgment entered against the other in connection with their shared practice.