Page 39 - Akerman | 2016 Guide to Doing Business in Florida

Generally, a written Partnership Agreement will address the amount of capital
to be contributed to the partnership by the various partners, which
contributions may be made in cash, property, or in-kind services. When a
partner makes a loan to the partnership, such loan should be clearly
documented in writing to avoid the loan being treated as a capital
contribution. Due to the fact that the partners in a general partnership are
personally liable for fulfilling the debts of the partnership, the Partnership
Agreement will often limit the ability of the partnership to borrow funds or
require all partners to approve any such borrowings.

c. Management. Generally, every partner conducting the usual business of the
partnership has the authority to bind the partnership unless the partner has no
authority and the person with whom the partner is dealing is aware of the fact
that the partner has no authority to act on behalf of the partnership. This
general authority may be modified by filing a certificate of partnership with the
state.

Because each partner in a general partnership is financially responsible for the
debts of the partnership, partnerships often appoint a managing partner and
otherwise limit the authority of the other partners. However, problems arise
when third parties are unaware of the limitation of the Partnership Agreement,
because such third parties will not be bound by these limitations and are free
to conduct business with any partner such conduct binds the partnership.

Partnerships are further bound by the acts or omissions of any partner acting
within the scope of the partnership or within the ordinary course of business
of the partnership. Any losses resulting from such actions are the
responsibility of the partnership (and therefore, each of the partners).
Partnership Agreements also frequently address partnership actions outside
the scope of the partnership and require approval of the partners before any
one partner can conduct such business on behalf of the partnership.

d. Profits and Losses. Partners agree among themselves through their
Partnership Agreement as to how and when capital contributions will be
returned, repayment of loans will be made, and the allocation and distribution
of profits and losses to the individual partners. Florida law requires that, if
there is no Partnership Agreement, each partner is repaid his or her capital
contribution and loans, and shares equally in the profit after repayment by the
partnership of all liabilities. If a partnership desires anything other than an equal
share of profits, the Partnership Agreement should specifically provide as
such.

e. Partner Liability. Unless an election is made to become a limited liability
partnership, every partner in a general partnership is jointly and severally liable
for all debts and obligations owed by the partnership, which may be collected
from a partner’s personal assets if the partnership is insolvent. Partners are
also personally jointly and severally liable for any wrongful act or omission
made by a partner in the ordinary course of business or with express
partnership authority and any misappropriation of cash or property of a third
person by any of the partners acting within the scope of his or her apparent
authority.

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