The Uniform Partnership Act in Georgia, codified at Chapter 8 of Title 14 of the Official Code of Georgia Annotated, governs general partnerships formed in the state and supplies a complete set of default rules that apply whenever the partners haven’t addressed something in writing.1Justia. Georgia Code 14-8-6 – Partnership Defined The statute defines who counts as a partner, how profits and losses are allocated, what duties partners owe one another, when and how a partnership dissolves, and, most consequentially, who is personally on the hook for partnership debts. Many of its defaults surprise people, which is why reading them before a dispute arises is far more useful than learning them after.
When Georgia Law Treats You as a Partner
A Georgia partnership can form without any paperwork at all. The statute defines a partnership as an association of two or more people who co-own a business operated for profit.1Justia. Georgia Code 14-8-6 – Partnership Defined No written agreement is required, and no state registration is needed to form a general partnership. If two people run a business together and share profits, Georgia law may treat them as partners whether they intended that result or not.
The statute gives courts specific tests for sorting out whether a partnership exists. Receiving a share of business profits creates a legal presumption that the recipient is a partner. That presumption falls away when the money is really payment on a debt, wages, rent, or interest on a loan.2Justia. Georgia Code 14-8-7 – Determination of Existence of Partnership Simply co-owning property or sharing gross revenue doesn’t by itself create a partnership. Courts examine the whole picture, including whether the parties shared control over business decisions and intended to operate as co-owners.
If the partnership operates under a name that doesn’t reveal its owners, the partners must file a trade name registration with the clerk of the superior court in the county where the business primarily operates.3Justia. Georgia Code 10-1-490 – Required Registration Statement for Business Using Trade, Partnership, or Other Name Not Showing Ownership That filing lists each owner’s name and address, the nature of the business, and the trade name itself.
Default Rules You’ll Live Under Without a Written Agreement
Almost every default rule under Georgia’s UPA can be overridden by agreement among the partners.4Justia. Georgia Code 14-8-18 – Rights and Duties of Partners Without that agreement, the statute fills in terms that often don’t match what the partners actually had in mind.
The default on profits and losses is strict equality. Partners share profits equally and bear losses in proportion to their share of profits, regardless of how much capital each put in.4Justia. Georgia Code 14-8-18 – Rights and Duties of Partners A partner who invested $500,000 and a partner who invested $5,000 split profits 50/50 unless a written agreement says otherwise. Each partner is entitled to repayment of capital contributions once the partnership’s liabilities are satisfied. A partner who advances money beyond the agreed contribution earns interest on the advance from the date it was made, and the partnership must reimburse any partner for payments or personal liabilities reasonably incurred in the ordinary course of business or to protect partnership property.
Management is equally democratic by default. Every partner has an equal voice in running the business regardless of capital contributed. Ordinary business decisions are resolved by majority vote; anything that contradicts the partnership agreement requires unanimous consent.4Justia. Georgia Code 14-8-18 – Rights and Duties of Partners No partner is entitled to a salary for working in the business, with one exception: a surviving partner winding up the partnership after dissolution can receive reasonable compensation for that work.
No new partner can join without every existing partner’s consent. That protects partners from having an unwanted co-owner imposed on them, but it also means bringing in new talent or capital requires a unanimous green light.4Justia. Georgia Code 14-8-18 – Rights and Duties of Partners
A well-drafted partnership agreement typically overrides these defaults by addressing profit and loss allocation, each partner’s capital contributions, management roles, exit mechanics, and dispute resolution. Partners who rely on handshake deals usually learn the cost of that informality only when a disagreement forces them into default rules neither side anticipated.
Fiduciary Duties Partners Owe Each Other
Every partner must account to the partnership for any personal benefit derived from partnership transactions, property, or opportunities. A partner who profits from a deal connected to the partnership’s business without the consent of the other partners holds those profits as a trustee for the partnership.5Justia. Georgia Code 14-8-21 – Benefits Derived by a Partner Without the Consent of Other Partners This duty of loyalty extends to the representatives of a deceased partner during liquidation.
Partners also owe each other a duty to act with reasonable care in conducting partnership business. Georgia’s UPA does not include a standalone statutory provision defining this standard, so courts apply general fiduciary duty principles. Honest mistakes and poor judgment generally won’t create liability; the line is crossed when conduct amounts to gross negligence or intentional wrongdoing that harms the partnership.
Any partner can demand a formal accounting of the partnership’s financial affairs. The right exists when a partner has been wrongfully excluded from the business or its property, when the partnership agreement provides for it, or whenever circumstances make it just and reasonable.6Justia. Georgia Code 14-8-22 – Right to Formal Accounting of Partnership Affairs An accounting forces a full review of the books and can expose hidden transactions or diverted funds.
Personal Liability for Partnership Debts
This is the rule that makes general partnerships genuinely dangerous for anyone with personal assets to protect. All partners in a general partnership are jointly and severally liable for every debt, obligation, and liability of the business.7Justia. Georgia Code 14-8-15 – Liability of Partners Jointly and severally means a creditor can pursue any single partner for the full amount owed. If a co-partner runs up debts or loses a lawsuit and can’t pay, the other partners are on the hook for the full balance.
The partnership itself is also liable when any partner causes loss or injury to a third party through a wrongful act committed in the ordinary course of business or with the co-partners’ authority.8FindLaw. Georgia Code 14-8-13 – Partnership Bound by Partners Wrongful Act One partner’s negligent mistake can expose every other partner’s personal assets.
A partner who pays more than their share of a partnership debt has the right to seek reimbursement from the others under the indemnification rules in the statute.4Justia. Georgia Code 14-8-18 – Rights and Duties of Partners That right is only useful if the co-partners actually have the money. When they’re insolvent, the paying partner absorbs the loss.
Someone who joins an existing partnership takes on liability for all pre-existing debts, but that liability can only be satisfied out of partnership property, not from the new partner’s personal assets.7Justia. Georgia Code 14-8-15 – Liability of Partners Debts incurred after the new partner joins carry full personal liability like any other.
Partnership by Estoppel
Even someone who isn’t actually a partner can end up liable as one. A person who represents themselves as a partner, or allows someone else to do so, is personally liable to anyone who extends credit based on that representation.9Justia. Georgia Code 14-8-16 – Liability of Person Representing Himself as a Partner When the representation is made publicly, liability extends to anyone who relied on it, even if the specific person giving credit didn’t hear the representation firsthand.
Creditor Claims Against a Partner’s Interest
When a partner personally owes money to a creditor, the creditor can obtain a charging order against the partner’s interest in the partnership. A charging order functions as a lien on the partner’s share of distributions. The creditor collects whatever that partner would have received, but a charging order generally doesn’t let the creditor seize partnership assets, participate in management, or force dissolution. The partnership’s operations continue; only the debtor-partner’s income stream is affected.
Converting to an LLP for Liability Protection
Georgia allows a general partnership to convert into a limited liability partnership by recording an LLP election with the clerk of the superior court in any county where the partnership has an office.10Justia. Georgia Code 14-8-62 – Limited Liability Partnership Election The election must include the partnership’s name, the nature of its business, and a statement that the partnership elects LLP status. Unless the partnership agreement says otherwise, a majority of partners can authorize the filing.
Once the election takes effect, partners are generally shielded from personal liability for the partnership’s debts and for the misconduct of other partners. A partner in an LLP is not individually liable for debts arising from another partner’s negligence, malpractice, or wrongful acts simply because they are a partner.7Justia. Georgia Code 14-8-15 – Liability of Partners The critical limitation: each partner remains fully liable for their own errors, negligence, malpractice, and misconduct. LLP status protects you from your co-partner’s mistakes, not your own.
The partnership’s name must include “limited liability partnership,” “L.L.P.,” or “LLP” to put the public on notice.11Justia. Georgia Code 14-8-63 – Name of Limited Liability Partnership For professional firms where malpractice exposure is real, the LLP structure is common precisely because it prevents one partner’s error from draining every other partner’s personal savings.
Who Owns What: Partnership vs. Personal Property
Sorting out what belongs to the partnership versus what belongs to individual partners causes more disputes than most people expect. Georgia law resolves this with presumptions. Property acquired in the partnership’s name is presumed to be partnership property. Property purchased with partnership funds is also presumed to be partnership property, even if title is held in an individual partner’s name.12Justia. Georgia Code 14-8-8 – Determination of Ownership of Partnership Property
The flip side matters just as much. Property acquired in a partner’s name without using partnership funds is presumed to be that partner’s separate property, even if the partnership uses it. Real estate and other publicly recorded property held in an individual’s name rather than the partnership’s name won’t be treated as partnership property against a third party who didn’t know otherwise.12Justia. Georgia Code 14-8-8 – Determination of Ownership of Partnership Property
Partners hold specific partnership property as tenants in partnership. Each partner can use that property for partnership purposes but has no right to use it personally without the other partners’ consent. A partner’s right in specific partnership property can’t be seized by personal creditors or attached in a personal lawsuit. On a partner’s death, their rights in specific partnership property pass automatically to the surviving partners, not to the deceased partner’s heirs.13Justia. Georgia Code 14-8-25 – Incidents of Tenancy in Partnership
How a Georgia Partnership Ends
Dissolution does not mean the partnership instantly vanishes. It triggers a winding-up period during which the business wraps up its affairs. Under the UPA, dissolution happens automatically in several situations:
- Any partner’s death, unless a written agreement provides for continuation.
- A partner’s expression of will to withdraw at any time.
- Expulsion of a partner under the terms of the partnership agreement.
- Carrying on the business becoming unlawful.
- A court decree ordering dissolution.
- Expiration of the term or completion of the project specified in the agreement.
The death rule blindsides people most often. Without a written agreement providing for continuation, one partner’s death forces the business to wind down. Buy-sell provisions in a partnership agreement address this directly by letting the remaining partners purchase the deceased partner’s interest at an agreed price or formula. Admitting a new partner does not by itself cause dissolution unless the partnership agreement says otherwise.14Justia. Georgia Code 14-8-31 – Causation of Dissolution
Winding Up and Notice to Creditors
Partners who didn’t wrongfully cause the dissolution have the right to wind up the partnership’s affairs, and any partner can petition a court to oversee the process if there’s a dispute.15Justia. Georgia Code 14-8-37 – Rights of Partners in Winding Up After dissolution, a partner can still bind the partnership for transactions necessary to finish existing business. The risk is that a partner might also bind the partnership to new obligations if third parties don’t know about the dissolution. To cut off that exposure, the partnership should notify known creditors directly and publish notice in a newspaper of general circulation where the business was conducted.16Justia. Georgia Code 14-8-35 – Actions Which Can Bind a Dissolved Partnership and Liability of Partners
Settling Accounts
Debts are paid in a specific order. Outside creditors are paid first, then debts owed to partners for anything other than capital or profits, then capital contributions owed to partners, and finally any remaining profits.17Justia. Georgia Code 14-8-40 – Settlement of Accounts Between Partners After Dissolution If the partnership’s assets aren’t enough to cover its debts, partners must contribute personally to make up the shortfall. Partners who contributed more than their share can seek contribution from the others.
Court-Ordered Dissolution
When partners reach an impasse they can’t resolve internally, a court can step in. Georgia law provides several grounds for judicial dissolution:
- A partner has been declared mentally incapacitated or shown to be of unsound mind.
- A partner can no longer fulfill their role under the partnership agreement.
- A partner’s conduct is prejudicing the business.
- A partner persistently breaches the agreement or makes it impractical to continue together.
- Other circumstances make dissolution the equitable outcome.
A court doesn’t have to dissolve the partnership to resolve a dispute. Beyond ordering a formal accounting under the just-and-reasonable standard,6Justia. Georgia Code 14-8-22 – Right to Formal Accounting of Partnership Affairs a court can issue injunctions preventing a partner from draining accounts or entering unauthorized contracts while preserving the business as a going concern.
Annual Federal Tax Filing
One obligation sits outside the UPA but applies to every Georgia partnership: the federal return. Every partnership doing business in the United States must file IRS Form 1065 annually, even though the partnership itself generally doesn’t pay income tax. Partnerships are pass-through entities, so profits and losses flow directly to each partner’s individual return. A partner owes tax on their allocated share even if they leave the money in the business. Federal tax law allows partnerships to make special allocations that deviate from ownership percentages, but those allocations must have substantial economic effect to be respected by the IRS.19Office of the Law Revision Counsel. 26 U.S. Code 704 – Partners Distributive Share
For partnerships on a calendar year, the 2025 return is due March 16, 2026. An automatic six-month extension to September 15, 2026, is available by filing Form 7004. The penalty for filing late is $255 per partner for each month or partial month the return is overdue, up to a maximum of 12 months.20Office of the Law Revision Counsel. 26 U.S. Code 6698 – Failure to File Partnership Return For a five-partner firm, that’s $1,275 per month and a maximum penalty of $15,300. The penalty applies to the partnership itself, not the individual partners, and the IRS sets a high bar for the reasonable-cause defense.