"Real property" includes land and any interest or estate in land.
"Registered limited liability partnership" means a partnership formed pursuant to an agreement governed by the laws of this state and registered under s. 178.40
A person has "knowledge" of a fact within the meaning of this chapter not only when that person has actual knowledge thereof, but also when that person has knowledge of such other facts as in the circumstances shows bad faith.
A person has "notice" of a fact within the meaning of this chapter when the person who claims the benefit of the notice (a) states the fact to such person, or (b) delivers through the mail, or by other means of communication, a written statement of the fact to such person or to a proper person at his or her place of business or residence.
Rules of construction. 178.02(1)
The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.
The law of estoppel shall apply under this chapter.
The law of agency shall apply under this chapter.
This chapter shall be so interpreted and construed as to effect its general purpose to make uniform the law of those states which enact it.
This chapter shall not be construed so as to impair the obligations of any contract existing July 9, 1915, nor to affect any action or proceedings begun or right accrued before said date.
In any case not provided for in this chapter the rules of law and equity, including the law merchant, shall govern.
Partnership defined. 178.03(1)
A partnership is an association of 2 or more persons to carry on as co-owners a business for profit. A partnership includes a registered limited liability partnership and a foreign registered limited liability partnership.
But any association formed under any other statute of this state, or any statute adopted by authority, other than the authority of this state, is not a partnership under this chapter, unless such association would have been a partnership in this state prior to the adoption of this chapter; but this chapter shall apply to limited partnerships except insofar as the statutes relating to such partnerships are inconsistent herewith.
History: 1993 a. 491
; 1995 a. 97
Determination of whether partnership exists.
In determining whether a partnership exists, these rules shall apply:
Except as provided by s. 178.13
, persons who are not partners as to each other are not partners as to 3rd persons.
Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property.
The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.
The receipt by a person of a share of the profits of a business is prima facie evidence that that person is a partner in the business, but that inference shall not be drawn if the profits were received for any of the following:
As payment as a debt by installments or otherwise.
As wages of an employee or rent to a landlord.
As an annuity to a surviving spouse or representative of a deceased partner.
As interest on a loan, though the amount of payment vary with the profits of the business.
As the consideration for the sale of the goodwill of a business or other property by installments or otherwise.
The receipt of a share of profits is prima facie evidence that a person is a partner, but a partnership will not be implied merely because of common ownership of property, whether or not profits are shared. Anderson v. Anderson, 54 Wis. 2d 666
, 196 N.W.2d 727
Except when all parties have performed the contract, thus indicating their acquiescence in its terms, a partnership created to deal in real estate is void unless it conforms to the statute of frauds. Estate of Schaefer, 72 Wis. 2d 600
, 241 N.W.2d 607
Partnership property. 178.05(1)
All property originally brought into the partnership stock or subsequently acquired, by purchase or otherwise, on account of the partnership is partnership property.
Unless the contrary intention appears, property acquired with partnership funds is partnership property.
Any estate in real property may be acquired in the partnership name. Title so acquired can be conveyed only in the partnership name.
A conveyance to a partnership in the partnership name, though without words of inheritance, passes the entire estate of the grantor unless a contrary intent appears.
Whether real estate is partnership property depends on whether it was acquired on account of the partnership, and, when held in the name of a partner, upon the intention of the parties. The fact that realty, individually owned, is used for partnership purposes is insufficient to support a finding that the land is partnership property. Estate of Schreiber, 68 Wis. 2d 135
, 227 N.W.2d 917
Partners are agents of partnership. 178.06(1)
Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which the partner is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom the partner is dealing has knowledge of the fact that the partner has no such authority.
An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.
Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all of the partners have no authority to do any of the following:
Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership.
Perform any other act which would make it impossible to carry on the ordinary business of the partnership.
Submit a partnership claim or liability to arbitration or reference.
No act of a partner in contravention of a restriction on the partner's authority shall bind the partnership to persons having knowledge of the restriction.
History: 1993 a. 482
; 1997 a. 35
When one partner repeatedly entered into renewals of an employment contract with a pharmacist to operate a drug store without objections by the other partners, the contract was valid even though highly favorable to the employee, so long as the partner received no personal benefit that the other partners did not share. Reliable Pharmacy v. Hall, 54 Wis. 2d 191
, 194 N.W.2d 596
When a partner's actions in real estate a transaction on behalf of a partnership fall within the express provisions of s. 178.06 (1), a partner who acts on behalf of the partnership is "an agent of the partnership" and s. 178.06 (1) controls. When the partner's actions do not fall within those provisions, the partner "purports to act as an agent," and s. 706.03 controls. Wyss v. Albee, 193 Wis. 2d 101
, 532 N.W.2d 444
Conveyance of real property of partnership. 178.07(1)(1)
Where title to real property is in the partnership name, any partner may convey title to such property by a conveyance executed in the partnership name; but the partnership may recover such property unless the partner's act binds the partnership under the provisions of s. 178.06 (1)
, or unless such property has been conveyed by the grantee or a person claiming through such grantee to a holder for value without knowledge that the partner, in making the conveyance, has exceeded the partner's authority.
Where title to real property is in the name of the partnership, a conveyance executed by a partner, in the partner's own name, passes the equitable interest of the partnership, provided the act is one within the authority of the partner under s. 178.06 (1)
Where title to real property is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership, the partners in whose name the title stands may convey title to such property, but the partnership may recover such property if the partners' act does not bind the partnership under s. 178.06 (1)
, unless the purchaser or the purchaser's assignee is a holder for value, without knowledge.
Where the title to real property is in the name of one or more or all the partners, or in a 3rd person in trust for the partnership, a conveyance executed by a partner in the partnership name, or in the partner's own name, passes the equitable interest of the partnership, provided the act is one within the authority of the partner under s. 178.06 (1)
Where the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights in such property.
History: 1993 a. 482
; 2005 a. 253
Admission by partner is evidence against the partnership.
An admission or representation made by any partner concerning partnership affairs within the scope of the partner's authority as conferred by this chapter is evidence against the partnership.
History: 1993 a. 482
Notice to or knowledge of partner charges partnership.
Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to the partner's mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.
History: 1993 a. 482
Partnership liable for wrongful act of partner.
Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of the partner's copartners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
History: 1993 a. 482
Partnership liable on partner's breach of trust.
The partnership is bound to make good the loss if any of the following occurs:
One partner acting within the scope of his or her apparent authority receives money or property of a 3rd person and misapplies it.
The partnership in the course of its business receives money or property of a 3rd person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
History: 1993 a. 482
Liability of partners. 178.12(1)
Except as provided in sub. (2)
, all partners are liable:
Jointly for all other debts and obligations of the partnership, but any partner may enter into a separate obligation to perform a partnership contract.
Except as provided in sub. (3)
, a partner in a registered limited liability partnership is not personally liable directly or indirectly, or by way of indemnification, contribution, assessment or otherwise, for any debt, obligation or liability of the partnership, whether in tort, contract or otherwise, and including any debt, obligation or liability arising from omissions, negligence, wrongful acts, misconduct or malpractice, arising while the partnership is a registered limited liability partnership.
(3) Subsection (2)
does not affect the liability of a partner in a registered limited liability partnership for any of the following:
The partner's own omissions, negligence, wrongful acts, misconduct or malpractice.
The omissions, negligence, wrongful acts, misconduct or malpractice of any person acting under the partner's actual supervision and control in the specific activity in which the omissions, negligence, wrongful acts, misconduct or malpractice occurred.
Any other debts, obligations and liabilities resulting from the partner's acts or conduct other than as a partner.
A partner in a registered limited liability partnership is not a proper defendant in a proceeding to recover damages or to enforce obligations of the type described in sub. (2)
unless the partner is alleged in good faith to be personally liable under sub. (3)
History: 1995 a. 97
Partnership by estoppel. 178.13(1)
When a person, by words spoken or written or by conduct, represents himself or herself, or consents to another representing him or her to anyone, as a partner in an existing partnership or with one or more persons not actual partners, he or she is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership and, if he or she has made such representation or consented to its being made in a public manner, he or she is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made, as follows:
If a partnership liability results, he or she is liable as though he or she were an actual member of the partnership.
If no partnership liability results, he or she is liable jointly with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, that person is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though that person were a partner in fact, with respect to persons who rely upon the representation. Where all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation.
History: 1993 a. 482
; 1997 a. 254
Under Wis. Tel. Co. v. Lehman
, 274 Wis. 331, partnership by estoppel involves some express or implied representation by the person in question that he or she is a partner, in reasonable and bona fide reliance upon which the person seeking to hold him or her liable as a partner has changed position, in such a manner that he or she will be prejudiced if the representation is denied. The party seeking to hold another liable as a partner must, in the exercise of reasonable prudence and good faith, have relied upon such condition or thing and been misled by it. Given the 50-year-old precedent, it appears that estoppel may be based on a change in position and is not limited to an extension of credit. Glazer v. Brookhouse, 471 F. Supp. 2d 945
Liability of incoming partner.
A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before that person's admission as though that person had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property.
History: 1993 a. 482
Rights and duties of partners.
The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules:
Each partner shall be repaid that partner's contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; and, except as provided in s. 178.12 (2)
, each partner must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to that partner's share in the profits.
The partnership must indemnify every partner in respect of payments made and personal liabilities reasonably incurred by him or her in the ordinary and proper conduct of the partnership's business, or for the preservation of the partnership's business or property.