Partner Creditors And Judgment Collection

What if you are a judgment enforcer, and a original judgment creditor is a general partnership that has dissolved? Could you recover their judgment if you locate a former general partner?

A larger problem to examine, is does their judgment debtor have some available assets to satisfy the judgment? Verify that first, as that's the most important factor in every judgment recovery.

Any person who remains authorized with an old partnership agreement, can assign the partnership's judgment to you.

The partnership agreement for a partnership, is much like the bylaws in a corporation. A partnership agreement describes who has the authority to get things done, and who can manage the affairs of the partnership.

A very certain way to learn if a person has the authority to assign a partnership's judgment, would be to get a the partnership agreement to read, and tell them what they should do.

A problem with doing that, is that might be close to offering legal advice, which could be UPL (the Unauthorized Practice of Law).

Reviewing someone else's contract, and advising them what it means legally, and which action they should take, could be reasoned UPL.

Anyone that remains authorized with powers of assigning anything, (e.g., insurance policies, leases, rights to subrogation) may assign judgments entered in favor of the partnership.

Preferably, their partnership will remain active, so they can easily assign the judgment to you.

When they aren't active, the safest way to proceed, would be to have the member that claims they have the authority to assign a judgment on behalf of their partnership, to put that in writing, and sign and notarize it, and give you a copy.

If you can recover their judgment, who should be paid? One option is to make the check payable to the partnership.

Another way to go, is to ask the creditor partnership draft a document where the member that assigned their judgment to you, gives specific instructions as to whom the partnership's portion of the judgment recovery is to be paid, and in what pro-rata amount.

If you owe a partnership money, and there are no instructions, one could pay every partner a pro-rata amount as per their percentage share of ownership specified in the partnership agreement (or the latest amendments to it).

A business partnership is an association of two or more individuals running a business with the goal of earning a profit.

A business partnership is viewed as being one and the same as its owners. There might be little to no formality involved in creating a valid partnership.

Partnership existence is defined by the rules listed in Part 2 of the UPA (Uniform Partnership Act).

All profits are passed through to the owners, and gets split according to what is listed in their partnership agreement.

Just like a sole proprietorship, a partnership has only one level of taxation. A partnership is a tax reporting entity, not a tax paying entity.

Although pass-through taxation is great, partnership owners have unlimited personal liability. In general, eachpartner in a partnership is jointly liable for a partnership's obligations.

Several liability means that the partners are individually liable. Joint liability means that the partners can be sued as a group.

In many states, every partner is both jointly and severally liable for the damages resulting from certain wrongdoing of other partners, and for the obligations and debts of the partnership.

Three rules for partnership liability are:

1. Every partner is liable for their own actions.

2. Each partner is liable for the actions of the other partners.

3. Every partner is liable for most actions of any employees of a business.

Unless there is an agreement to the contrary, UPA gives partners the same voting rights, even if they invested different amounts of capital to the partnership.

As with when there is a sole proprietorship, when the partnership uses a fictitious name (different from the names of the partners), it's required to have a fictitious business name filing in the county where it is located.

Partnerships must also register either locally, or with the Secretary Of State, sometimes at their county superior court.

Partners owe both a fiduciary duty and a contractual duty to each another. According to Black's Law Dictionary, a "fiduciary duty" is the "duty to act for the benefit of another person while subordinating their personal interests to those of another person".

Sometimes partnership operating agreements waive a fiduciary duty, so the partners can pursue other future opportunities.

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