Many business owners have converted their business form to a limited liability company or corporation. This is because partnerships retain traditional liability. As such, those attempting to collect funds from a partnership, including creditors and plaintiffs, can go after the partners’ personal assets in order to satisfy outstanding debts or collections. Therefore, partners in a partnership must know how they may remain liable to others beyond what they’ve put into the partnership.
Florida follows the Revised Uniform Partnership Act (“RUPA”). In a RUPA jurisdiction, the partnership is treated as its own separate entity, which is not the case in a Uniform Partnership Act jurisdiction. The significance of the distinction lies when third parties come after partners to satisfy outstanding obligations. That is because in a RUPA jurisdiction, the partnership and its partners are held jointly and severally liable.
There is a certain procedure for outside parties to go after partners for attachment of personal assets to satisfy obligations. The claimant must first sue the entity and exhaust all assets of the partnership. Only then can the claimant sue the partners in their personal capacity by suing them jointly and severally.
Many questions arise when it comes to the extent to which partners are liable in a partnership, and how their personal assets may be put in jeopardy. It is therefore important to understand the procedures that are involved in being sued in your capacity as a partner. Consulting the right legal team can help ensure that your personal assets are protected in any litigation. Call the Trembly Law Firm at (305) 431-5678 to schedule a consultation.