Your assignment is to prepare and submit a paper on legal memorandum: issues and procedures. Any analysis of potential claims and liabilities, therefore, must be considered in light of the partnership classification under Canadian business entity law.
1.2Partnership Realities: Personal and Joint Liability of Partners
Having established your status as a partnership under Canadian business entity law, it becomes necessary to discuss precisely what this means in terms of partner relations and potential liabilities. The most important legal point, in terms of the facts submitted, is that a partnership, in contrast to other business entity classifications, is not treated as a separate business entity. this means that the law does not sever the relationship between the partnership and the partners. This is an extraordinarily significant point in the instant case, and it has important implications.
In effect, depending on the written partnership agreement or the Partnership Act if there is no agreement, the partners share in the partnership on a pro rata or other predetermined basis. They share in the profits and the losses of the partnership, they own underlying assets collectively, and they can enter or leave the partnership consistent with the aforementioned terms.
For purposes of this essay, the liability provisions of partnership law are most relevant. A partnership can be sued in its own name. this, however, can be misleading, because the fact remains that it is the individual partners whom are personally liable for the debts and the liabilities of the partnership. This personal liability is a threat to all of the partners at MUB, though, of course, the staff has nothing to worry about in this respect.
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