Page 40 - Akerman | 2016 Guide to Doing Business in Florida

A newly admitted partner to an existing partnership shall not be liable for any
liabilities incurred before he or she was admitted to the partnership, however
the newly admitted partner may see a reduced value in the partnership due to
any such outstanding obligations, as such obligations may still be settled from
the existing partnership property.

This treatment of liability is a significant detriment to forming a general
partnership for a number of businesses, especially where other entities exist
that better limit the liability of their principals. There are certain techniques to
limit exposure to partners, such as limits on liability negotiated in particular
documents of the partnership, such as loans or leases, as well as the
procurement of liability insurance, but none of these can fully hedge the risk of
the potential liability of a general partnership.

f. Transferability of Partnership Interests. Under Florida law, a partner may
transfer his or her interest in the partnership’s profits to another person without
causing the dissolution of the partnership, but the assignee does not become
a partner in the partnership and is not entitled to participate in the
management or administration of the partnership’s affairs. Unless modified by
the Partnership Agreement, this interest is a profits-only interest, and the
transferee does not become a partner without further action by the partners of
the partnership to make the transferee a partner. Under Florida law, a
partner’s interest in a partnership is personal property.

A partner’s interest in a partnership may be subject to a charging order upon
application by a judgment creditor of a partner or a partner’s transferee to a
court having jurisdiction. The court may charge the transferable interest of the
judgment debtor to satisfy the judgment, and this charge constitutes a lien on
the transferable interest of the judgment debtor in the partnership. The court
may order a foreclosure of the interest subject to the charging order at any
time and the purchaser at the foreclosure sale has the rights of a transferee to
receive profits from the partnership.
g. Dissolution or Termination of the Partnership. A general partnership can exist
perpetually or be limited to a fixed timeframe of existence as set forth in the
Partnership Agreement. If the partnership is perpetual and at-will, dissolution
is caused when the partnership gets notice of any partner’s (other than a
dissociated partner) intent to withdraw as a partner from the partnership. In the
case of a partnership for a fixed term, the partnership may be dissolved by the
end of the fixed term, by the mutual agreement of all partners to wind up the
affairs of the partnership, by the occurrence of any event which makes it
unlawful for the partnership to continue its business, by the death of any
partner, by the bankruptcy of any partner or the partnership, or by judicial
decree.

Once a partnership has been dissolved, it is not terminated until the process
of winding up its business is completed. The authority of the remaining
partners in the partnership that has elected to dissolve is limited to any
authority necessary to complete the task of winding up the business.

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