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Title 32. Partnership


Published: 2015

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Title 32. PARTNERSHIP
Chapter 32.05. UNIFORM PARTNERSHIP ACT

[Repealed, Sec. 8 ch 115 SLA 2000].

Chapter 32.06. UNIFORM PARTNERSHIP ACT

Article 01. NATURE AND PROPERTY OF PARTNERSHIP

Sec. 32.06.201. Partnership as entity.

 (a) A partnership is an entity distinct from its partners.

 (b) A limited liability partnership continues to be the same entity that existed before the filing of a statement of qualification under AS 32.06.911 .

Sec. 32.06.202. Formation of partnership.

 (a) Except as otherwise provided in (b) of this section, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.

 (b) An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.

 (c) In determining whether a partnership is formed, the following rules apply:

 (1) joint tenancy, tenancy in common, tenancy by the entirety, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property;

 (2) the sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived;

 (3) a person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits are received in payment

 (A) of a debt by installments or otherwise;

 (B) for services as an independent contractor, or of wages or other compensation to an employee;

 (C) of rent;

 (D) of an annuity or other retirement or health benefit provided to a beneficiary, representative, or designee of a deceased or retired partner;

 (E) of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or

 (F) for the sale of the good will of a business or other property by installments or otherwise.

Sec. 32.06.203. Partnership property.

Property acquired by a partnership is property of the partnership and not of the partners individually.

Sec. 32.06.204. When property is partnership property.

 (a) Property is partnership property if acquired in the name of

 (1) the partnership; or

 (2) one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

 (b) Property is acquired in the name of the partnership by a transfer to

 (1) the partnership in its name; or

 (2) one or more partners in their capacity as partners in the partnership if the name of the partnership is indicated in the instrument transferring title to the property.

 (c) Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership.

 (d) Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property even if used for partnership purposes.

Article 02. RELATIONS OF PARTNERS TO PERSONS DEALING WITH PARTNERSHIP

Sec. 32.06.301. Partner as agent of partnership.

Subject to the effect of a statement of partnership authority under AS 32.06.303 ,

 (1) each partner is an agent of the partnership for the purpose of its business; an act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner does not have authority to act for the partnership in the particular matter and the person with whom the partner is dealing knows or has received a notification that the partner lacks authority;

 (2) an act of a partner that is not apparently for carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership does not bind the partnership unless the act was authorized by the other partners.

Sec. 32.06.302. Transfer and recovery of partnership property.

 (a) Subject to the effect of a statement of partnership authority under AS 32.06.303 , partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name.

 (b) Partnership property held in the name of one or more partners, with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

 (c) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

 (d) A partnership may recover partnership property from a transferee only if the partnership proves that execution of the instrument of initial transfer did not bind the partnership under AS 32.06.301 and

 (1) as to a subsequent transferee who gave value for property transferred under (a) or (b) of this section, that the subsequent transferee knew or had received a notification that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or

 (2) as to a transferee who gave value for property transferred under (c) of this section, that the transferee knew or had received a notification that the property was partnership property, and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.

 (e) A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property under (d) of this section from an earlier transferee of the property.

 (f) If a person holds all of the partners' interests in the partnership, all of the partnership property vests in the person. The person may execute a document in the name of the partnership to evidence vesting of the property in the person and may file or record the document.

Sec. 32.06.303. Statement of partnership authority.

 (a) A partnership may file a statement of partnership authority that

 (1) must include

 (A) the name of the partnership;

 (B) the street address of its chief executive office and an office in this state, if there is one;

 (C) the names and mailing addresses of all of the partners or an agent appointed and maintained by the partnership for the purpose of (b) of this section; and

 (D) the names of the partners authorized to execute an instrument transferring real property held in the name of the partnership; and

 (2) may state

 (A) the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership; and

 (B) any other matter.

 (b) If a statement of partnership authority names an agent, the agent shall maintain a list of the names and mailing addresses of all of the partners and make it available to any person on request for good cause shown.

 (c) If a filed statement of partnership authority is executed under AS 32.06.970 (c) and states the name of the partnership but does not contain all of the other information required by (a) of this section, the statement nevertheless operates with respect to a person who is not a partner as provided in (d) and (e) of this section.

 (d) Except as otherwise provided in (g) of this section, a filed statement of partnership authority supplements the authority of a partner to enter into transactions on behalf of the partnership as follows:

 (1) except for transfers of real property, a grant of authority contained in a filed statement of partnership authority is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a limitation on the grant of authority is not then contained in another filed statement; a filed cancellation of a limitation on authority revives the previous grant of authority;

 (2) a grant of authority to transfer real property held in the name of the partnership and contained in a certified copy of a filed statement of partnership authority recorded in the office for recording transfers of the real property is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a certified copy of a filed statement containing a limitation on the grant of authority is not then of record in the office for recording transfers of that real property; the recording, in the office for recording transfers of that real property, of a certified copy of a filed cancellation of a limitation on authority revives the previous grant of authority.

 (e) A person who is not a partner is considered to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a certified copy of the filed statement containing the limitation on authority is of record in the office for recording transfers of that real property.

 (f) Except as otherwise provided in (d) and (e) of this section and in AS 32.06.704 and 32.06.805, a person who is not a partner is not considered to know of a limitation on the authority of a partner merely because the limitation is contained in a filed statement.

 (g) Unless earlier cancelled, a filed statement of partnership authority is cancelled by operation of law five years after the date on which the statement or the most recent amendment is filed with the department.

Sec. 32.06.304. Statement of denial.

A partner or other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent under AS 32.06.303(b) may file a statement of denial stating the name of the partnership and the fact that is being denied, which may include denial of a person's authority or status as a partner. A statement of denial is a limitation on authority under AS 32.06.303 (d) and (e).

Sec. 32.06.305. Partnership liable for partner's actionable conduct.

 (a) A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

 (b) If, in the course of the partnership's business or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person who is not a partner and the money or property is misapplied by a partner, the partnership is liable for the loss.

Sec. 32.06.306. Partner's liability.

 (a) Except as otherwise provided in (b) and (c) of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

 (b) A person admitted as a partner into an existing partnership is not personally liable for a partnership obligation incurred before the person's admission as a partner.

 (c) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, in tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for the obligation solely by reason of being or acting as a partner. This subsection applies even if inconsistent with a partnership agreement provision that exists immediately before the vote required to become a limited liability partnership under AS 32.06.911 (b).

Sec. 32.06.307. Actions by and against partnership and partners.

 (a) A partnership may sue and be sued in the name of the partnership.

 (b) An action may be brought against a partnership and, to the extent not inconsistent with AS 32.06.306 , any or all of the partners in the same action or in separate actions.

 (c) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner.

 (d) A judgment creditor of a partner may not execute against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under AS 32.06.306 and

 (1) a judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;

 (2) the partnership is a debtor in bankruptcy;

 (3) the partner has agreed that the creditor is not required to exhaust partnership assets;

 (4) a court grants permission to the judgment creditor to execute against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers; or

 (5) liability is imposed on the partner by law or contract independent of the existence of the partnership.

 (e) This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under AS 32.06.308 .

Sec. 32.06.308. Liability of purported partner.

 (a) If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons who are not partners, the purported partner is liable to a person to whom the representation is made if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to the liability as if the purported partner were a partner. If partnership liability does not result, the purported partner is liable with respect to the liability jointly and severally with any other person consenting to the representation.

 (b) If under (a) of this section a person is represented to be a partner in an existing partnership, or with one or more persons who are not partners, the purported partner is an agent of the persons consenting to the representation to bind those persons to the same extent and in the same manner as if the purported partner were a partner with respect to persons who enter into transactions in reliance upon the representation. If all of the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all of the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

 (c) A person is not liable as a partner merely because the person is named by another in a statement of partnership authority.

 (d) A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner's dissociation from the partnership.

 (e) Except as otherwise provided in (a) and (b) of this section, persons who are not partners as to each other are not liable as partners to other persons.

Article 03. RELATIONS OF PARTNERS TO EACH OTHER AND TO PARTNERSHIP

Sec. 32.06.401. Partner's rights and duties.

 (a) Each partner is considered to have an account that is

 (1) credited with an amount equal to

 (A) the money and the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership; and

 (B) the partner's share of the partnership profits; and

 (2) charged with an amount equal to

 (A) the money and the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner; and

 (B) the partner's share of the partnership losses.

 (b) Each partner is entitled to an equal share of the partnership profits and is chargeable with a share of the partnership losses in proportion to the partner's share of the profits.

 (c) A partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business of the partnership or for the preservation of the partnership's business or property.

 (d) A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.

 (e) A payment or advance made by a partner that results in a partnership obligation under (c) or (d) of this section constitutes a loan to the partnership that accrues interest from the date of the payment or advance.

 (f) Each partner has equal rights in the management and conduct of the partnership business.

 (g) A partner may use or possess partnership property only on behalf of the partnership.

 (h) A partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business of the partnership.

 (i) Except as provided in AS 10.55 (Alaska Entity Transactions Act), a person may become a partner only with the consent of all the partners.

 (j) A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the consent of all the partners.

 (k) This section does not affect the obligations of a partnership to other persons under AS 32.06.301 .

Sec. 32.06.402. Distributions in kind.

A partner does not have a right to receive, and may not be required to accept, a distribution in kind.