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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Added Partnership, GP-1 Info... Posted by Mark Hamilton on May 15, 2009 at 10:44 PM In Reply to: Title Comany's, Partnerships, and Hoops - Updates Needed posted by Mark H. on May 15, 2009 at 3:16 PM Hopefully Ward will weigh in, but a few more comments... Those forming general partnerships in California should take special note of the following parts of the California Code: I) Section 16101(9)and (10): (9)defines the meaning of a partnership as "an association of two or more persons to carry on as coowners of a business for profit under Section 16202" (10) states that ""Partnership agreement" means the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement." and (17) ""Statement" means a statement of partnership authority under Section 16303,(Find a GP-1 form, "Statement of Partnership Authority"). II) Also note Section 16103./." relations among the partners and between the partners and the partnership are governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnership." Comment: It is important to note that whatever you DO NOT cover in the partnership agreement will be provided by Chapter 5, which may or may not be to your liking. III) Note that Section 16105 establishs GP-1 (Statement of Partnership Authority) as a permissive filing: "(a) A statement may be filed in the office of the Secretary of State...filing has the effect provided in this chapter with respect to partnership property located in or transactions that occur in this state. (b) A certified copy of a statement that has been filed in the office of the Secretary of State and recorded in the office for recording transfers of real property has the effect provided for recorded statements in this chapter. A recorded statement that is not a certified copy of a statement filed in the office of the Secretary of State does not have the effect provided for recorded statements in this chapter." Comment: The act of filing a GP-1 supplements and/or limits the authority of a partner to enter into transactions on behalf of the partnership and offers some added protection in case one of the partners transfers property without authority. Carefully read Section 16300 to 16303 to see the effect. Finally, Section 16301 establishs that "Each partner is an agent of the partnership for the purpose of its business. An act of a partner...binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority." HOWEVER, this secion is subject to a "Statement of Partnership Authority" (form GP-1), which may modify this section. Sections 16302 and 16303 explains real property transfer and how a GP-1 and/or a filed GP-1 effects authority and legal presumptions. The filing of a GP-1 provides partners some added power to recover property transfered without the authority of the partnership. So in conclusion: First, make an agreement. You don't have to have it notarized by law, but the title company will expect/demand it. Second, create a GP-1 and file it with the state, OR write a "Statement of Partnership Authority" and notarize it...the title company will expect one of these. If you want a "Statement of Partnership Authority" (other than a GP-1) I can provide one that works for Old Republic. My two cents... Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Hopefully Ward will weigh in, but a few more comments... : Those forming general partnerships in California should take special note of the following parts of the California Code: : I) Section 16101(9)and (10): : (9)defines the meaning of a partnership as "an association of two or more : persons to carry on as coowners of a business for profit under Section 16202" : (10) states that ""Partnership agreement" means the agreement, whether written, : oral, or implied, among the partners concerning the partnership, : including amendments to the partnership agreement." and : (17) ""Statement" means a statement of partnership authority under : Section 16303,(Find a GP-1 form, "Statement of Partnership Authority"). : II) Also note Section 16103./." relations among the partners and between the partners and the : partnership are governed by the partnership agreement. To the extent : the partnership agreement does not otherwise provide, this chapter : governs relations among the partners and between the partners and the : partnership." : Comment: It is important to note that whatever you DO NOT cover in the partnership agreement will be provided by Chapter 5, which may or may not be to your liking. : III) Note that Section 16105 establishs GP-1 (Statement of Partnership Authority) as a permissive filing: : "(a) A statement may be filed in the office of the Secretary : of State...filing has the effect provided in this chapter with : respect to partnership property located in or transactions that occur : in this state. : (b) A certified copy of a statement that has been filed in the : office of the Secretary of State and recorded in the office for : recording transfers of real property has the effect provided for : recorded statements in this chapter. A recorded statement that is : not a certified copy of a statement filed in the office of the : Secretary of State does not have the effect provided for recorded : statements in this chapter." : Comment: The act of filing a GP-1 supplements and/or limits the : authority of a partner to enter into transactions on behalf of the : partnership and offers some added protection in case one of the partners transfers property without authority. Carefully read Section 16300 to 16303 to see the effect. : : Finally, Section 16301 establishs that "Each partner is an agent of the partnership for the purpose of : its business. An act of a partner...binds the partnership, unless the : partner had no authority to act for the partnership in the particular : matter and the person with whom the partner was dealing knew or had : received a notification that the partner lacked authority." HOWEVER, this secion : is subject to a "Statement of Partnership Authority" (form GP-1), which may modify this section. : Sections 16302 and 16303 explains real property transfer and how a GP-1 and/or a filed GP-1 effects authority and legal presumptions. The filing of a GP-1 provides partners some added power to recover property transfered without the authority of the partnership. : So in conclusion: : First, make an agreement. You don't have to have it notarized by law, but the title company will expect/demand it. : Second, create a GP-1 and file it with the state, OR write a "Statement of Partnership Authority" and notarize it...the title company will expect one of these. : If you want a "Statement of Partnership Authority" (other than a GP-1) I can provide one that works for Old Republic. : My two cents... [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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