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HomeCorporations CodeGENERAL PROVISIONSCh. 5Art. 3§ 16307 Partnership Suits And Judgments

§ 16307 Partnership Suits And Judgments

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 16307 Partnership Suits And Judgments

This law says a partnership can sue and be sued in its own name, and it tells when a partner’s personal money can be used to pay a judgment against the partnership.

Key Takeaways

  • •A partnership can be sued and can sue in its own name.
  • •A judgment against the partnership does NOT automatically become a judgment against each partner.
  • •A partner’s personal assets can only be used to satisfy a partnership judgment if one of the specific exceptions in the law applies (e.g., partnership assets are insufficient, the partnership is in bankruptcy, the partner agrees, etc.).

Example

A customer sues a small accounting partnership because of a mistake in their taxes.

The customer can bring the lawsuit against the partnership itself, and they can also choose to sue the individual accountants (the partners) in the same case or in separate cases. If the court orders the partnership to pay, the partners’ own money isn’t automatically taken unless one of the special rules in the law applies.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 16307 Partnership Suits And Judgments

(a) A partnership may sue and be sued in the name of the partnership. (b) Except as otherwise provided in subdivision (g) of Section 16306, an action may be brought against the partnership and any or all of the partners in the same action or in separate actions. (c) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner’s assets unless there is also a judgment against the partner. (d) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless any of the following apply: (1) A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part. (2) The partnership is a debtor in bankruptcy. (3) The partner has agreed that the creditor need not exhaust partnership assets. (4) A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers. (5) Liability is imposed on the partner by law or contract independent of the existence of the partnership. (e) This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under Section 16308. (Added by Stats. 1996, Ch. 1003, Sec. 2. Effective January 1, 1997.)

Last verified: January 10, 2026

Key Terms

partnershipjudgmentpartnerassets

Related Statutes

  • § 16301 Partner Authority Binding Partnership
  • § 16303 Partnership Authority Statement
  • § 16305 Partnership Liability For Partner Acts
  • § 16914 Merger Effects On Partnerships
  • § 12377 Corporate Agent Indemnification Rules

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 16307.
View Official Source