Partnerships: Types, Requirements & Advantages

**PARTNERSHIPS**: All income is pooled; expenses are deducted and losses or profits allocated to partners NBPA: ***S.2(1**) Partnership is the relation that subsists between persons carrying on a business in common, with a view of profit*. Not a separate legal entity (*Thorne v NB*) -- -- **...

**PARTNERSHIPS**: All income is pooled; expenses are deducted and losses or profits allocated to partners NBPA: ***S.2(1**) Partnership is the relation that subsists between persons carrying on a business in common, with a view of profit*. Not a separate legal entity (*Thorne v NB*) -- -- **REQUIREMENTS:** Determined on the facts, circumstances, and what the parties actually intended (*Continental*) 1. **"Relationship between parties"** - **Partnership agreement:** A private document that sets rules on how partners deal with their rights and obligations toward each other \\ 2. **"Carrying on a Business"** 3. **Partners "In Common"** - Contribution of assets (\$) and efforts - Sharing of Profit (not revenue) and loss (*Pooley*) NBPA S.3(c) - Undivided interest in properties - Skills, knowledge, expertise or other asset to a common undertaking; - Mutual right of control/management of the enterprise; Mutual Agency - Filing income tax returns as a partnership; - Joint bank accounts 4. **"With a view to profit"** **3 TYPES:** 1. **GENERAL PARTNERSHIPS:** Unlimited Liability - Share profits and losses proportionate to share of partnership owned. (If 50/50 ownership, profits and losses are split 50%/50%. - General partners can make business decisions +-----------------------------------+-----------------------------------+ | **Advantages** | **Disadvantages** | +===================================+===================================+ | 1. **Flexibility** | 1. **Unlimited Liability** | | | | | In designing the managerial | Unlimited liability of each | | structure and deciding with whom | partner jointly or jointly and | | you want to do business with | severally for all debts and | | | obligations. | +-----------------------------------+-----------------------------------+ | **2. Loss Utilization** | **2. Difficult to find a suitable | | | partner** | | Income from other sources can be | | | pooled to offset business losses | Has to be someone(s) you trust to | | | not turn the business | | | relationship sour and someone | | | with a degree of expertise that | | | you do not have yourself. | | | | | | Have to make sure you choose a | | | good partner because they have | | | authority to make business | | | decisions without your express | | | consent | +-----------------------------------+-----------------------------------+ | **3. Easy Start-up, Easy | **3. Tax Concerns** | | Dissolution** | | | | Higher income means more tax | | Business can be commenced and | (individual will move to a higher | | dissolved easily | marginal tax bracket) | +-----------------------------------+-----------------------------------+ | | **4. Dissolves if one of the | | | partners dies** | +-----------------------------------+-----------------------------------+ 2. **LIMITED PARTNERSHIPS:** At least one general partner and one limited partner -- -- - **Limited partner**: has liability limited to contributions/investments put into the company, but cannot participate in management and has minimal control over daily business decisions and operations. - **General partner:** fully liable for all debts and obligations of the business. - **NBLPA s.5(1)** A person can be a general partner and a limited partner - **NBLPA s.17(1)** Limited partners must not take part in the control of the partnership. If it does it risks having the liability of a general partner - **NBLPA s.22(1)** A limited partner can assign his or her interest - Limited partners have the right to receive repayment of their investment: (NBLPA s.19) - On dissolution of the limited partnership - At the time specified in the partnership agreement; - On six months' notice, if not time is specified - On the unanimous consent of all partners 3. **LIMITED LIABILITY PARTNERSHIPS** - No general partners, all limited partners - Typically used by professionals - Partners are not liable for negligence or wrongful conduct of other partners - EXCEPTIONS TO LIABILITY: - **NBPA s.48(2)** 48(1) does not relieve a person who is a partner in a New Brunswick limited liability partnership from personal liability for the person's negligence, wrongful act or omission, malpractice or misconduct for which the person would be personally liable if the person were not a partner - **NBPA s.48(3)** Sub.48(1) does not protect the interest in the partnership property of a partner in a New Brunswick limited liability partnership from claims against the partnership respecting a partnership obligation -- -- **What to include in Partnership Agreement:** - Name of partnership - Place of operation - Term of the partnership (duration) - Capital contribution section (who is contributing what) - Property section - Profit sharing arrangements - Loss sharing arrangements - Drawings section (normally deals with when a particular partner can withdraw money from a partnership) - Indemnity details -- this is crucial - In a partnership relationship, partners incur different expenses. At end of day, some of expenses paid out of partner's own pocket needs to be reimbursed. - Duties and powers of each partner - Voting, decisions, etc. - Confidentiality - Disclosure (already in NBPA, but might want to go further) - Terms of admission (i.e., admitting a new partner à NBPA has rules, but is very strict; may want to soften this; can also specify that when a new partner is admitted, they are deemed to be a party to the partnership agreement so they automatically have to comply with it) - Terms of expulsion (NBPA is strict on this, might want to soften it -- can put under what conditions a partner can be fired) - Retirement terms - What happens upon death of a partner - Continuation clauses - Note: every time a partner leaves or joins, the default rule is that the partnership is dissolved. Partnership agreements can alter this default rule and replace it with a deeming rule saying it won't dissolve, and partnership will continue - When partnership will be dissolved, etc. - Usually 3 cases in which partnership will be dissolved: - Partnership agreement has been set to last for specific duration and that duration expires - If not formed for specific term, it will dissolve at one partner giving a notice to other partners saying they want to dissolve. - At last resort, can be dissolved by court decision - Dispute resolution **RELATIONSHIP BETWEEN PARTNERS** **Variation of Mutual Rights and Duties:** Partners can vary their rights and duties on the consent of all partners. Consent can be express or inferred from course of dealings. - ***NBPA s.20*** *The mutual rights and duties of partners whether ascertained by agreement of defined by this Act, may be varied by the consent of all the partners, and the consent may either be express or inferred from a course of dealing.* +-----------------------------------------------------------------------+ | ***Partners must be compensated (not wages): NBPA s.25(b)** The firm | | must indemnify every partner in respect of payments made and personal | | liability incurred by them in the ordinary and proper conduct of the | | business of the firm, or in or about anything necessarily done for | | the preservation of the business or property of the firm* | +-----------------------------------------------------------------------+ **FIDUCIARY DUTY:** - **Duty of disclosure** (**[NBPA s. 29]**): Each partner is obliged to obliged to render to each partner "true accounts and full information" regarding all matters affecting the partnership - **Duty to account for private profit** (**[NBPA s 30(1)]**) Every partner must account to partners any benefit received without consent of the other partners from transactions concerning the partnerships - **Duty not to compete** (**[NBPA s. 31]**) If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business. **DISSOLUTION:** - - **Date Specified: NBPA 33(2)** In the case of paragraph (1)(c), the partnership is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice. - **Date of Death: NBPA 34(1)** Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner. - Estate is liable after dissolution/death: **NBPA s.10** **RELATIONSHIP BETWEEN PARTNERS AND THIRD PARTIES NBPA ss.6-19** Cannot contract out of these rules, they are mandatory. - **Joint liability** = can go after each partner for full amount. - **Several Liability** = you can go after each partner, but only for amount contributed by the individual partner. - **Joint and Several Liability** = Each partner is individually liable, but they can seek compensation from the other partners. **AGENTS:** - **Partners are Agents of the Firm** - **Power of Agents to Bind Firm** **NO AUTHORITY** - **Firm Not Bound Where:** **ESTATES OF DECEASED PARTNERS** - **Liability of Deceased Partners/Estate of Partners** **JOINT AND SEVERAL LIABILITY** - **JOINTLY LIABLE WITH CO-PARTNERS, SEVERALLY LIABLE FOR S.11 OR S.12 LIABILITIES** **INCOMING PARTNERS** - **NEW PARTNERS NOT LIABLE FOR FAULTS OF OLD PARTNERS** **OUTGOING PARTNERS** - **RETIREMENT** - **DEATH** **HOLDING OUT LIABILITY** Liability of apparent partners arises by application of the principles of estoppel. ***If someone is holding themselves out as a partner,*** and this is confirmed by someone is an actual partner, or that actually presents of tries to present the apparent partner as a partner, if the third party does something on ***reliance*** to that holding out, the person will be held liable. *(i.e. Use of a person's name in the firm name, on a sign on the premises of the firm, on the firm's invoices or letterheads.)* **PARTNERSHIP CASES:** **A.E. LePage Ltd v Kamex Developments Ltd, 1977** -------------------------------------------------- **No intention to carry on business** +-----------------------------------+-----------------------------------+ | **FACTS** | Several purchasers pooled their | | | money and purchased an apartment | | | building. | | | | | | Title was held by a corporation | | | in trust for the purchasers | | | (Kemax). | | | | | | Each purchaser was permitted to | | | sell their interest in the | | | property to third parties, | | | subject to a right of first | | | refusal in favor of the other | | | purchasers. | | | | | | Revenue from the building was to | | | be shared among the purchasers in | | | proportion to their interest. | | | | | | Any sale was to be approved by a | | | majority vote. | | | | | | The purchasers eventually agreed | | | to sell the building through an | | | open listing. | | | | | | A realtor (LePage) approached one | | | of the purchasers and requested | | | an exclusive listing agreement. | | | | | | He signed, purporting to sign it | | | on behalf of all purchasers. The | | | building was sold through another | | | broker and LePage sued, claiming | | | the arrangements between the | | | purchasers constituted a | | | partnership and therefore the | | | exclusive listing agreement was | | | binding upon all of the partners. | +===================================+===================================+ | **ISSUE** | **Whether the purchase of the | | | property was a partnership?** | | | | | | If YES, whether the one partner | | | agreeing to the open listing was | | | binding to the partnership? | +-----------------------------------+-----------------------------------+ | **FINDING** | Appeal allowed -- they were | | | property owners in common, not | | | partners. | | | | | | à The fact that, under their | | | agreement, they have to offer a | | | right of first refusal to other | | | co-owners in the event of sale is | | | not inconsistent w their basic | | | right to deal w their respective | | | rights in the property | | | | | | à There was no intention to carry | | | on a business here | +-----------------------------------+-----------------------------------+ | **LAW** | NBPA 3(a): determining whether a | | | partnership exists: | | | | | | (a) joint tenancy, tenancy in | | | common, joint property, common | | | property, or part ownership does | | | not of itself create a | | | partnership, whether the tenants | | | or owners do or do not share any | | | profits made by the use thereof | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | **Blair JA**: | | | | | | - whether they were co-owners | | | or partners depends on their | | | intention -- was it to "carry | | | on a business" or to agree on | | | the regulation of their | | | rights + obligations as | | | co-owners of a property? | | | | | | - **Test:** whether, or not the | | | position of co-workers | | | becomes that of partners | | | depends on their intention as | | | disclosed by all the facts of | | | the case. | | | | | | - the mere fact that co-owners | | | intend to acquire/hold/sell a | | | building for profit does not | | | make them partners | +-----------------------------------+-----------------------------------+ | **RATIO** | **Holding property in common and | | | profits deriving from common | | | ownership ≠ automatically create | | | a partnership** | | | | | | **Filing taxes separately ≠ a | | | partnership** | +-----------------------------------+-----------------------------------+ **Volzke Construction Ltd v Westlock Foods Ltd, 1986** ------------------------------------------------------ **Unintentional Partnership** **Control vs No Control over business not relevant for determining whether there is a partnership** **Intent to enter into partnership; an indicia of a partnership** +-----------------------------------+-----------------------------------+ | **FACTS** | Westlock Foods Ltd. (20%) and | | | Bonel Properties Ltd. (80%) were | | | joint owners of the Westlock | | | Shopping Centre. | | | | | | Volzke was a general contractor, | | | which was engaged to build an | | | addition to the Westlock Shopping | | | Centre. | | | | | | All of Volzke\'s accounts were | | | issued to Bonel and paid from a | | | bank account in the joint names | | | of Westlock and Bonel, but on | | | which only Bonel had signing | | | authority. | | | | | | The management of the Westlock | | | Shopping Centre was almost | | | exclusively done by Bonel, | | | Westlock had very little real | | | authority. | | | | | | Volzke\'s last invoice was not | | | paid by Bonel and it accordingly | | | sued Westlock alleging that | | | Westlock was in partnership with | | | Bonel Properties Ltd. and was | | | therefore liable for the debt. | | | | | | Westlock claimed they were | | | co-owners based on *Kamex* case | | | and thus they could not be liable | | | for Bonel's liabilities | +===================================+===================================+ | **ISSUE** | Was there a partnership between | | | Westlock and Bonel? Or a just | | | joint ownership? | +-----------------------------------+-----------------------------------+ | **FINDING** | **TJ: No Partnership** bc No | | | Intention to create, Westlock had | | | no control over business | | | | | | CA: **Partnership**-- the | | | entirety of the co-ownership | | | created a partnership | +-----------------------------------+-----------------------------------+ | **LAW** | **NBPA 3(c)** the receipt by a | | | person of a share of the profits | | | of a business is *prima | | | facie *evidence that he is a | | | partner in the business, but the | | | receipt of such a share, or of a | | | payment contingent on or varying | | | with the profits of a business, | | | does not of itself make him a | | | partner in the business, and in | | | particular, | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | **Moir JA**: | | | | | | - Control is not determinative | | | of whether there is a | | | partnership | | | | | | - Factors that lead to a | | | partnership: | | | | | | | | | | | | - Parties spoke of each other | | | as partners | | | | | | - The joint bank account and | | | cheques, | | | | | | - Treasury branch and Investors | | | Syndicate financing, | | | | | | - The right to be consulted | | | about new tenants, | | | | | | - The sending of prospective | | | tenants, | | | | | | - The "on the spot" | | | maintenance, | | | | | | - Admission they were to share | | | the costs on an 80-20 basis | | | | | | - The profits being divided on | | | the same basis give rise to a | | | partnership. | | | | | | Distinguished from Kamex: The | | | profit shares as well as previous | | | evidence of business dealings was | | | sufficient to prove a partnership | | | existed. | +-----------------------------------+-----------------------------------+ | **RATIO** | Control alone is irrelevant | | | because there can be silent | | | (limited) partners | | | | | | à **You can unintentionally enter | | | into a partnership** | +-----------------------------------+-----------------------------------+ **Pooley v Driver, 1876** ------------------------- **Right to share profits = Partnership** **Subjective intent of whether you wanted to be a partner is irrelevant** +-----------------------------------+-----------------------------------+ | **FACTS** | Borrett and Hagen formed a | | | partnership to manufacture | | | certain products. | | | | | | They notionally divided the | | | capital into 60 equal parts | | | | | | - 23 to Borrett, | | | | | | - 17 to Hagen. | | | | | | - 20 to creditors in accordance | | | with the funds advanced. | | | | | | Driver extended a loan to the | | | partnership for the duration of | | | the partnership in exchange for 5 | | | parts of the partnership. | | | | | | Partnership went bankrupt, | | | | | | Pooley was a creditor of the | | | partnership and he wanted to | | | enforce the debt against Driver, | | | who Pooley alleged was a partner | | | with Borrett and Hagen as opposed | | | to mere creditors. | +===================================+===================================+ | **ISSUE** | **Was there a partnership between | | | Borrett and Hagen?** (Y) | | | | | | **If yes, does Drivers share in | | | the partnership from the loan | | | make him a partner?** (Y) | +-----------------------------------+-----------------------------------+ | **FINDING** | There was a partnership, Driver | | | owned a part of it; consequently, | | | partners including Driver are | | | liable for the business' debts | | | | | | Pooley is entitled to a judgement | | | on the debts owed by Borrett and | | | Hagen | +-----------------------------------+-----------------------------------+ | **LAW** | NBPA 3 | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | **Jessel MR**: | | | | | | - The D's loan was [during the | | | continuance of the | | | partnership] -- | | | shows that this was intended | | | as an advance of capital to | | | the partnership business, | | | made for the purpose of | | | carrying it on -- not as an | | | ordinary loan | | | | | | - [Subjective intent is | | | irrelevant]: | | | objective test showed certain | | | requirements in the agreement | | | which demonstrate | | | partnership; it is possible | | | to have dormant partners, and | | | courts may create | | | partnerships without | | | intention if other elements | | | are found. | | | | | | - **Driver tried to have all | | | the benefits of partnership | | | without liability**. | +-----------------------------------+-----------------------------------+ | **RATIO** | Partnership bc right to share | | | profits | | | | | | Subjective intent (of whether | | | someone wanted to be a partner) | | | is irrelevant | +-----------------------------------+-----------------------------------+ **Continental Bank of Canada v R, 1998** ---------------------------------------- **No requirement to create new business** +-----------------------------------+-----------------------------------+ | **FACTS** | Partnership between CB leasing | | | and C Corp's subsidiaries formed. | | | | | | CB Leasing transferred its assets | | | to the partnership on a tax-free | | | rollover basis. | | | | | | CB Leasing transferred its | | | partnership interest to | | | Continental and was dissolved. | | | | | | Under s. 174(2) of the Bank Act, | | | a bank may not participate in a | | | partnership. The bank sold the | | | acquired partnership interest to | | | C Corp's subsidiaries. | | | | | | The CRA reassessed CB Leasing on | | | the basis that the true nature of | | | the transaction was the | | | disposition of assets to C Corp's | | | subsidiaries, making the tax-free | | | rollover invalid and giving rise | | | to a recapture of the capital | | | cost allowance in the hands of CB | | | Leasing. | | | | | | The leasing company successfully | | | appealed to the TCC. | | | | | | The minister's appeal in the FCA | | | was allowed. | | | | | | The leasing company appealed to | | | the SCC. | +===================================+===================================+ | **ISSUE** | Was CB Leasing a member of a | | | valid partnership with the | | | subsidiaries of C Corp? (Y) | +-----------------------------------+-----------------------------------+ | **FINDING** | CB Leasing was a member of a | | | valid partnership | +-----------------------------------+-----------------------------------+ | **LAW** | NBPA s2(2): lays out exceptions | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | **Bastarache J**: | | | | | | - Business was carried on in | | | common because of the | | | management and duties | | | outlined in partnership | | | agreement. | | | | | | - There are no requirements as | | | to the length of partnership, | | | or requirement that | | | partnership must expand its | | | business. | | | | | | - **Pursuit of profit is | | | ancillary to purpose of | | | creation of partnership** | | | | | | - **Partnership:** Determined | | | on the facts, circs, and what | | | the parties actually intended | | | | | | | | | | | | - **Indicia of partnership**: | | | | | | - contribution by the | | | parties of \$, | | | | | | - property, | | | | | | - effort, | | | | | | - knowledge, | | | | | | - skills, or other asset to | | | a common undertaking; | | | | | | - a joint property | | | interest in the | | | subject matter; | | | | | | - sharing of profits | | | and losses; | | | | | | - mutual right of | | | control/management of | | | the enterprise; | | | | | | - filing income tax | | | returns as a | | | partnership; | | | | | | - joint bank accounts | | | | | | - In this case the parties | | | created a valid partnership | | | within the meaning of s2 PA | | | | | | - Here, there was a business | | | (equipment leasing), there | | | was no termination of | | | Leasing's K which continued | | | during the period in question | | | so the business was carried | | | on in common, and since there | | | is no evidence of any | | | expectation other than | | | profits continuing to be | | | generated, the business was | | | carried on w a view to profit | +-----------------------------------+-----------------------------------+ | **RATIO** | The fact that no new business was | | | created during a period in | | | question does not negate the | | | existing business that was | | | continued during that time à | | | **existence of a valid | | | partnership does not depend on | | | the creation of a new business** | +-----------------------------------+-----------------------------------+ **Thorne v New Brunswick (Workmen's Compensation Board), 1962** --------------------------------------------------------------- **Partnership is not a separate legal entity** **Cannot be a partner and an employee** +-----------------------------------+-----------------------------------+ | **FACTS** | Two individuals (Thorne and | | | Robichaud) entered into an oral | | | agreement to carry on a | | | partnership (a lumbering and | | | sawmill business). Robichaud was | | | in charge of woods operations, | | | Thorne was in charge of milling. | | | | | | Thorne was injured two months | | | later in the course of his | | | duties, applied for worker's | | | compensation under the Workmen's | | | Compensation Act, 1952, alleging | | | he was a workman. | | | | | | In order to be a workman, one | | | must be an employee and have a | | | contract with the employer. | | | | | | Thorne tried to argue a | | | partnership is a separate legal | | | entity and the partnership he had | | | created had employed himself. | | | (tried to be a partner and an | | | employee) | +===================================+===================================+ | **ISSUE** | Was Thorne a workman employed by | | | the said partnership within the | | | meaning of the Act so as to | | | entitle him to compensation | | | thereunder? | +-----------------------------------+-----------------------------------+ | **FINDING** | No | +-----------------------------------+-----------------------------------+ | **LAW** | In Ellis v Joseph Ellis & Co, | | | 1905 it was held that the person, | | | having been one of the partners | | | in the firm for which he was | | | working, could not be said to | | | have been employed by them | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | **McNair CJNB**: | | | | | | - Legislature did not intend to | | | make partnerships separate | | | legal entities | | | | | | - A person cannot contract with | | | themselves. Therefore, unless | | | the partnership had some | | | legal identity separate from | | | its partners, the agreement | | | wasn't a contract at all. | +-----------------------------------+-----------------------------------+ | **RATIO** | Partnerships are not a separate | | | legal entity; thus you cannot be | | | both an employee and employer | | | under a partnership -- you cannot | | | contract with yourself | +-----------------------------------+-----------------------------------+ **Haughton Graphic Ltd v Zivot, 1986** -------------------------------------- **Limited Partners may be liable if they become involved in the management of partnership** +-----------------------------------+-----------------------------------+ | **FACTS** | Printing, not paid for services, | | | graphics argued the two LP's took | | | control of business and | | | therefore, lost their LP | | | protection. | +===================================+===================================+ | **ISSUE** | Did the limited partner (Zivot) | | | take part in the control of the | | | limited partnership? | | | | | | Does the fact that the third | | | parties knew that the partner was | | | a limited partner and did not | | | rely upon his personal liability | | | relieve the partner from | | | unlimited liability? | +-----------------------------------+-----------------------------------+ | **FINDING** | Yes | | | | | | No | +-----------------------------------+-----------------------------------+ | **ANALYSIS** | Z and Marshall's (other LP) | | | business cards indicated they | | | were "president" and "vice | | | president" of Princast. | | | | | | Z agreed that he was responsible | | | for all managerial decisions for | | | Princast. | | | | | | The LPA permits LP's to transact | | | business with LPship but does not | | | permit to transact business by a | | | LP on behalf of the LPship. | | | | | | The provision does not contain | | | any requirement of reliance. If | | | it was a necessary precondition, | | | such words should be in the | | | statute. The law only applied to | | | a person who, in addition to | | | being an officer, director, | | | senior employee, or other | | | directing mind of the corporate | | | GP, seeks to take advantage of LL | | | as a LP. | +-----------------------------------+-----------------------------------+ | **RATIO** | Whenever you are acting as | | | director of corporation who is a | | | general partner in the limited | | | partnership, you are an agent. | | | But if you go beyond that, like | | | in this case in relations with | | | 3^rd^ parties they kept saying | | | they're in control of the | | | management, they're going beyond | | | their agency relationship with | | | the corporation, then they will | | | be liable | +-----------------------------------+-----------------------------------+ **Note: Subsequent cases do not approve of this position taken by the Court because of the separate personality of the corporate entity. However, best to avoid LP's becoming directly involved in the management of the GP in any capacity whether directly or indirectly through a corporate GP.** **Nordile Holdings v Breckenridge 1992** ---------------------------------------- +-----------------------------------+-----------------------------------+ | ***FACTS*** | Armand was a limited partnership, | | | whose general partner was a | | | corporation called Arbutus Ltd. B | | | and R were minority shareholders, | | | directors, and officers of | | | Arbutus and limited partners of | | | Armand. Armand purchased property | | | from Nordile but defaulted on | | | payments. | +===================================+===================================+ | ***ISSUE*** | Did the personal defendants (B&R) | | | take part in the management of | | | Armand? | +-----------------------------------+-----------------------------------+ | ***RATIO*** | A legal person may be a general | | | partner in a limited partnership, | | | but since a legal person is a | | | fiction, it can only act through | | | human agents. | | | | | | The trend in Canadian partnership | | | law does not approve the position | | | taken in Haughton. Justification: | | | the separate personality of the | | | corporate entity. However, it is | | | still advised to avoid limited | | | partners becoming directly | | | involved in the management of the | | | general partnership in any | | | capacity whether directly or | | | indirectly through a corporate | | | general partnership. | +-----------------------------------+-----------------------------------+