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HomeCorporations CodeGENERAL PROVISIONSCh. 5Art. 4§ 16406 Continued Partnership Presumptions

§ 16406 Continued Partnership Presumptions

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

§ 16406 Continued Partnership Presumptions

This law says that if a partnership that was set up for a set time or a specific project keeps going after that time ends, the partners keep the same rights and duties they had before, and the law assumes they agreed to keep the partnership alive if they keep working without settling up.

Key Takeaways

  • •If a partnership for a set time or project continues after the end date, the partners' rights and duties stay the same.
  • •This works as long as the partnership can be treated as a "partnership at will" (i.e., it can keep going without a fixed end).
  • •If the partners who usually run the business keep it going without settling up, the law presumes they agreed to keep the partnership alive.

Example

Three friends start a food truck for a one‑year event. After the year ends, they keep running the food truck but never sign a new partnership agreement.

Because they kept the business going, the law says they still have the same partnership rights and duties as before, and it assumes they all agreed to keep the partnership going even though they didn’t write anything down.

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

Official Source
View on CA.gov

§ 16406 Continued Partnership Presumptions

(a) If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will. (b) If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue. (Added by Stats. 1996, Ch. 1003, Sec. 2. Effective January 1, 1997.)

Last verified: January 10, 2026

Key Terms

partnership for a definite termpartnership at willsettlement or liquidation of the partnership

Related Statutes

  • § 16401 Partner Account Credits Charges
  • § 16402 Partner Distribution In Kind
  • § 16403 Partnership Books Access
  • § 16404 Partner Fiduciary Duties
  • § 16405 Partner Lawsuits Against Partnership

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 16406.
View Official Source