Partnership Property

1
Partnership Property

• Professor Marilyn Cane
• NSU LAW

2
Three Property Rights

• UPA 24 describes three property rights
• Rights in specific partnership property
• Partnership interests (i.e., financial claims
  against the partnership)
• Rights to management (i.e., control rights)
• RUPA does not provide partners with specific
  rights in partnership property

3
Partnership Property

• The term partnership property implies a
  separate legal entity, but the ownership
  provisions imply an aggregation
• Key to finding of partnership property is intent
  of the parties
• Purchased with partnership funds?
• Is it real estate acquired in the partnership
  name? (note the entity concept again)
• How did the partners account for the property?

4
RUPA 204 Rules

• Acquired in the name of the partnership
• Partnership is named on the title as owner
• Title acquired by partners qua partners and title
  names partnership
• Acquired in the name of a partner, but the title
  indicates partnership status (w/o naming the
  partnership)
• If purchased with partnership assets, it is
  presumed to be partnership property (RUPA
  204(c) see also UPA 8(2))
• If none of the above, property is presumed to be
  personal, not partnership property

5
Ownership Rights in Specific Partnership Property

• RUPA 203 none
• UPA 25 tenancy in partnership
• Right to possess for partnership purposes
• No right to assign
• No attachment or execution for personal debts
• Right of survivorship
• Bottom line UPA achieves an entity result
  through aggregate means

6
Partnership Interest
A partners interest in the partnership is his
share of the profits and surplus AND
The partners interest is PERSONAL PROPERTY UPA
Section 26
7
Partners Interest
A,B and C own adjoining dairy farms
A,B and C transfer their farms to ABC Farm, a
Partnership
8
Partners Interest
As Will states All my real property to my son,
Daniel and all my personalty to my son Jonathan
My farm will go to Daniel
9
Partners Interest
When A dies, does Daniel get the farm?
NO! When A contributed his farm to the
partnership, it became partnership property
As interest in the AB C Farm is PERSONAL
PROPERTY, thus it goes to Jonathan under the Will
B and C can continue to use the farm for
partnership purposes
10
Partners Interest
B transfers his interest in ABC Farm to X
What rights does X have?
X is ONLY entitled to the profits to which the
assigning partner would otherwise have been
entitledUPA 27
X isnt entitled to any say in the management of
the partnership, nor to look at books and records
nor to any accounting
11
Partners Interest
Partners interest means all of the partners
interest,including transferable rights, and all
management and other rights. RUPA Section 101(9)
The ONLY transferable interest of a partner in a
partnership is the partners share share of
profits and losses and the right to receive
distributions RUPA Section 502
A Partners Transferable interest is PERSONAL
PROPERTY RUPA Section 502