Entering a partnership with a partner you trust is a great step towards making a profit. However, running a partnership is not as simple as it sounds, and most of what is entailed in a partnership is often overlooked. One such area that is often overlooked is determining what exactly belongs to the partnership and what remains the property of each single partner? This questions becomes key especially when the business winds down.
Partnership property is subject to sharing among the partners. Partner property belongs solely to that partner. This underscores the importance of determining what belongs to the partnership and what belongs to the partner. One factor a court will consider in determining whether or not property belongs to the partnerships is whether or not the partnership’s funds were used in purchasing the property. However, that is not dispositive. If a partner uses personal funds to acquire property for use in the partnership, a court may find that it is still partnership property. Another factor a court may look to is how the property is titled, especially in the case of property that is traditionally titled. If a car is purchased and titled to the business, a court may be more likely to announce that the car is considered partnership property. If a car is purchased and titled to the individual, a court may be less likely to announce that the car is considered partnership property. This will all come into play if a partnership is winding down, and the partners must decide how to equitably distribute what belongs to the property.
Many business owners have questions as to what they are rightfully owed in a partnership. The legal team at the Trembly Law Firm has years of experience helping business owners with any legal needs they may have, Call the Trembly Law Firm at (305) 431-5678 today.