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Partnerships

A partnership is where two or more individuals, corporate or other entities, agree to carry on business together under a registered business name with a view to profit. All partners in the partnership must have the same goals, and, so far as third parties are concerned, each partner is equally responsible for decisions made by the other partner or partners on behalf of the business. All the partners in a partnership are treated equally from a legal point of view. If there is no written agreement, all partners will share in the profits equally, are liable to cover losses equally and are equally responsible for the activities and trading of the business. Nevertheless, from a third party's point of view, all the parties are jointly and severally liable for the obligations of the partnership. A partnership agreement between the partners should record the term of the partnership and specify all relevant aspects of the partnership business.

A partnership has no separate legal existence from the partners who make up the partnership. So far as third parties are concerned, the liability of the partners for all business debts and obligations is joint and several and unlimited. Accordingly, each partner can be sued, and be required to pay the full amount of any debts of the partnership. If this happens, a partner's only recourse may be to sue or cross-claim against the other partner of partners for their share of the debt.

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