UPA vs. RUPA

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UPA vs. RUPA

• Professor Marilyn Cane
• NSU Law

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UPA vs. RUPA
UPA Partnerships sometimes ENTITIES sometimes
mere AGGREGATES
Aggregate Need to convey property as members
changed under UPA
RUPA states expressly that a partnership is an
ENTITY
RUPA Property acquired by a partnership becomes
property of the partnership, not of the
partners individually
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UPA Partners jointly and severally liable. Can
sue INDIVIDUAL PARTNER for partnership
obligation. Then individual partner has a claim
against the partnership, and ultimately other
partners.
RUPA Partners jointly and severally liable.
HOWEVER, a judgment against a partnership is not
itself a judgment against and individual partner.
RUPA A judgment creditor of the partnership is
generally required to levy unsuccessfully on the
partnership's assets BEFORE levying on a
partner's individual property
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UPA Partners can sue other partners and
partnership only in action for dissolution or to
an accounting.
RUPA Partners are permitted to sue the
partnership at any time as it is an entity.
UPA Distribution after dissolution first to
creditors OTHER THAN partners who are creditors.
RUPA Distribution after dissolution to first
to creditors, INCLUDING partners who are
creditors ( in pari passu)
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UPA provides that partners are fiduciaries to
each other and the partnership, however, the UPA
gives very little guidance regarding the nature
of the fiduciary obligation of partners
RUPA states expressly that a partner owes to the
partnership and the other partners the fiduciary
duties of loyalty and care as set forth in the
act.
RUPA prohibits the partnership agreement from
eliminating or waiving the duty of loyalty, the
agreement may, however, identify specific types
or categories of activities that do not violate
the duty of loyalty, if not manifestly
unreasonable
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Under UPA, the rules on partnership breakups are
all based on a "dissolution" of the
partnership, which is defined as the change in
the relation of the partners caused by any
partner ceasing to be associated in the carrying
on of the business.
RUPA includes partner "dissociation," which are
withdrawals and other departures, such as
expulsions. A dissociation does not necessarily
cause dissolution. The PARTNERSHIP may continue
its legal existence after a partner dissociates.
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RUPA provides for the buyout of a dissociated
partner's economic interest in lieu of winding up
the business, unless the partner's dissociation
results in a dissolution.
Under RUPA, if there is no dissolution after
dissociation, the remaining partners have a right
to continue the business and the dissociated
partner has a right to be paid the value of his
or her partnership interest
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See generally, John W. Larson, Richard B. Comiter
and Marilyn B. Cane FLORIDA'S NEW PARTNERSHIP
LAW, Florida Bar Journal, November, 1995 (69-NOV
FLBJ 20 )