Also known as:statements of partnership authority · partnership authority statement
Written by attorneys · grounded in primary & secondary sources — see below
A filing that a partnership may deliver to the secretary of state specifying the names of partners authorized to execute instruments transferring real property held in the partnership name. The statement may also grant supplementary authority to partners or limit their authority to enter into other transactions on behalf of the partnership.
Sources & Authorities
How it applies
Common Examples
2
Transfer Blocked by Filed Statement
Simon Stern and Samuel Soto operate Solstice Ventures, a partnership that holds title to warehouse property in its name. After internal disputes, the partners file a statement of partnership authority that expressly limits Simon to transactions under $50,000 and requires Samuel's signature for any real property transfer. Simon later signs a deed conveying the warehouse to Sapphire Holdings for $200,000. Because the filed statement notified the buyer of the limitation, the partnership may recover the property from Sapphire Holdings.
Ordinary Transfer Without Limiting Statement
Scott Summers and Spencer Silver run Sierra Solutions, a partnership holding title to equipment in its name. No statement of partnership authority has been filed. Scott signs a bill of sale transferring the equipment to Silverline Industries. Because the absence of a limiting statement leaves Scott's apparent authority intact for ordinary-course transfers, the buyer takes good title even though Spencer did not consent.
Put it into practice
Test Yourself
6
Practice Questions1
· 5 primary sources
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Study Supplements
Common questions
Frequently Asked
3
How does a statement of partnership authority affect a partner's power to transfer partnership property held in the partnership name?+
The statement can limit or expand a partner's authority to sign instruments transferring such property. Without a filed statement, a partner may transfer the property by signing in the partnership name. A properly filed statement that restricts authority prevents a good-faith purchaser from relying on apparent authority beyond the stated limits.
Supporting sources
Does naming a person in a statement of partnership authority make that person liable as a partner?+
No. A person is not liable as a partner merely because another names the person as a partner in a statement of partnership authority.
Supporting sources
What happens to a former partner's liability if the partnership fails to amend its statement of partnership authority after dissociation?+
The former partner does not continue to be liable merely because of the failure to amend the statement to reflect the dissociation.
Supporting sources
Business Associations RelationshipsFormation, management, and control of general partnerships · Formation, management, and control of general partnershipsNEXTGENIntermediate