| | | At common law, a partnership, not being a legal entity, could | | not sue or be sued in the firm name. The UPA itself is silent on | | this point, so in the absence of another enabling statute, it is | | generally necessary to join all the partners in an action against | | the partnership. |
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| | | Most States have statutes or rules authorizing partnerships to | | sue or be sued in the partnership name. Many of those statutes, | | however, are found in the state provisions dealing with civil | | procedure rather than in the partnership act. |
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| | | 2. Subsection (b) provides that suit generally may be brought | | against the partnership and any or all of the partners in the | | same action or in separate actions. It is intended to clarify | | that the partners need not be named in an action against the | | partnership. In particular, in an action against a partnership, | | it is not necessary to name a partner individually in addition to | | the partnership. This will simplify and reduce the cost of | | litigation, especially in cases of small claims where there are | | known to be significant partnership assets and thus no necessity | | to collect the judgment out of the partners' assets. |
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| | | Where the partnership is a limited liability partnership, the | | limited liability partnership rules clarify that a partner not | | liable for the alleged partnership obligation may not be named in | | the action against the partnership unless the action also seeks | | to establish personal liability of the partner for the | | obligation. See subsections (b) and (d). |
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| | | 3. Subsection (c) provides that a judgment against the | | partnership is not, standing alone, a judgment against the | | partners, and it cannot be satisfied from a partner's personal | | assets unless there is a judgment against the partner. Thus, a | | partner must be individually named and served, either in the | | action against the partnership or in a later suit, before his | | personal assets may be subject to levy for a claim against the | | partnership. |
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| | | RUPA leaves it to the law of judgments, as did the UPA, to | | determine the collateral effects to be accorded a prior judgment | | for or against the partnership in a subsequent action against a | | partner individually. See Section 60 of the Second Restatement | | of Judgments (1982) and the Comments thereto. |
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| | | 4. Subsection (d) requires partnership creditors to exhaust | | the partnership's assets before levying on a judgment debtor | | partner's individual property where the partner is personally | | liable for the partnership obligation under Section 306. That | | rule respects the concept of the partnership as an entity and | | makes partners more in the nature of guarantors than principal |
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