Nicholas, Jack and Madeline are planning to form a partnership to create a business that will sell a healthy breakfast-on-the-go to commuters just outside of the local train station. They have been able to reach agreement on many issues, but Madeline is concerned that Nicholas might become a little irresponsible and use his position as a partner, and the partnership's name, in business transactions that Madeline might not approve of for the partnership. Madeline feels that Nicholas has superb marketing skills that will benefit the business, but she wonders what he might do in regard to transactions with third parties on behalf of the partnership.
Prepare a memo to Madeline discussing the rights of each partner to engage in transactions on behalf of the partnership and how a partnership can restrict a partner's authority to engage in specific types of transactions.
Use the Uniform Partnership Act of 1997 as a reference.
This is to apprise you about the various aspects of a Partnership firm to enable you to participate in the functioning of the firm whole heartedly as well contribute your might to its prosperity and expansion. It is said that you have to choose your partners more carefully than your life partner. This memo is basically based on the Uniform Partnership Act of 1997.
Before proceeding a-head it is worth while noting the difference between the Uniform and Revised Uniform Partnership Acts. As the Wikipedia states The UPA and RUPA provide rules as to many aspects of a partnership relationship including formation, the ownership of partnership assets, the assessment of fiduciary duties, the settlement of partnership disputes, and termination. Each allows modification of these rules in the individual agreement among the partners. RUPA is significantly more detailed than is the UPA as to the degree to which the partnership agreement may modify the default rules ...
The basis of formation of a firm is absolute trust and faith in each other partners. All the partners must take decisions jointly with full agreement of all. There must not be any room for doubt in the mind of any one.
The success and failure of a firm is on this premise. Actions of any or all partners will bring the firm to an end but they all jointly and severally are liable to the creditors and other stakeholders.