Old Partner Creditors

I am not a lawyer, I am a Judgment Broker. This article is my opinion, based on my California experiences. Laws are different in every state. If you ever want legal advice or a strategy to use, you should contact an attorney.

What if you are a judgment recovery specialist, and a original judgment creditor is a general partnership that has dissolved? Could their judgment be recovered when you locate a former general partner?

The larger issue to consider, would be does their judgment debtor have any available assets showing? Check that first, because that is the a vital factor in every judgment recovery.

Any person still authorized with a previous partnership agreement, could assign the partnership's judgment to you.

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

The most reliable way to learn if someone has the authority to assign a partnership's judgment, is to find a the partnership agreement and read it, and tell them what to do.

The trouble with doing this, is it could be too close to giving legal advice, which might be UPL (the Unauthorized Practice of Law).

Reviewing another person's contract, and advising them what it means legally, and which action they could take, could be reasoned to be UPL.

Anyone still authorized with the power to assign anything, (e.g., insurance policies, leases, rights of subrogation) may assign a judgment entered in favor of the partnership.

Ideally, the partnership would remain active, so they can easily assign their judgment to you.

When they aren't active, the safest way to go, is to get the member who claims they have the authority to assign the judgment on behalf of their partnership, to put that in writing, and sign and notarize that statement, and provide you a copy.

If you recover the judgment, who should be paid? One way is to write a check to the partnership.

Another option, is to ask the creditor partnership draft a document where the person that assigned their judgment to you, gives exact instructions as to whom the partnership's share of the judgment recovery is to get paid, and how much for each person.

If one owes a partnership money, and there is no instructions, one could pay every partner a pro-rata amount equal to 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 making profits.

A business partnership is considered to be one and the same as their owners. There may be little or no formality involved in creating valid partnerships.

The rules for determining the existence of a partnership are listed in Part 2 of the UPA (Uniform Partnership Act).

Any profits pass through to the owners, and are divided according to what is specified in their partnership agreement.

Just like a sole proprietorship, a partnership has only a single level of taxation. Partnerships are a tax reporting entity, not a tax-paying entity.

While pass-through taxation is an advantage, partnership owners have unlimited personal liability. In general, everypartner in the partnership is jointly liable for a obligations of the partnership.

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

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

Three rules for liability in a partnership are:

1. Every partner is liable for their own actions.

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

3. Each partner is liable for the actions of the employees in a business.

Unless there is an agreement to the contrary, UPA states that partners have the same rights to vote, even when they invested different amounts of capital to the partnership.

Just like the case of a sole proprietorship, when the partnership uses a fictitious name (different from the partner names), it's required to have a fictitious business name statement 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 contractual duty and a fiduciary duty to each another. As described in 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 the fiduciary duty, so that partners can pursue other future opportunities.

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