What rights doI have as a partner in a general partnership?

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What rights doI have as a partner in a general partnership?

Can I get voted out? Can I demand a CPA run the books? Can I demand a property management group run the property?

Asked on February 6, 2012 under Business Law, California

Answers:

Glenn M. Lyon, Esq. / MacGregor Lyon, LLC.

Answered 9 years ago | Contributor

Mr. Miller's response is well-written and also basically applicable to Georgia. You cannot be kicked out, but the partnership could be dissolved by one of the partners.

By the way, a partnership is generally not an advisable way to conduct a business.

If you would like to discuss any issues further, please feel free to contact my office.  Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

Steven Fromm / Steven J Fromm & Associates, P.C.

Answered 9 years ago | Contributor

Basically your rights are determined by the partnership agreement.  If there is no partnership agreement, then the laws of the state may be relevant in determining rights.  No businessman should enter into an agreement without having corporate counsel involved.  Additionally, partnerships expose you to personal liability and are not the preferred way to conduct business.  An LLC or S corp would be preferable.  Get with a business and tax attorney to do this right.

Bradley Miller / Miller Law LLC

Answered 9 years ago | Contributor

In Ohio, absent a partnership agreement, the Ohio Uniform Partnership Act (R.C. 1776) controls. To answer your questions, pursuant to the Act:

  1. You can only get voted out if the vote is unanimous by the other partners. In addition, you can only voted out for the limited causes listed in the statute ("we don't want you in our partnership anymore" is not a valid cause).
  2. As a partner, you have the right to inspect and make copies of the books and records of the partnership. What you do with the records, including taking them to an accountant, is up to you.
  3. A partner has equal rights in the management of the partnership. So you would probably be within your rights to request a property management group run property that the partnership owns. If managing the property is within the ordinary scope of the business (in other words, that is one of the purposes of the partnership), then decisions generally require a majority vote. If managing the property is not within the ordinary scope of the business, then decisions generally require the consent of all the partners.

I hope this helps. As you see, normally a general partnership is disfavored over other entities such as an LLC or corporation. And if you are going to have a partnership (or any kind of entity with multiple owners), you need a partnership agreement or some kind of written agreement that states the duties and responsibilities of the owners.

If you need further help with the situation, feel free to contact me.


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