Partnerships: Overview

Generally, most states recognize partnerships as legal entities that can acquire, convey, and encumber real property in the partnership  name; however, the partners of the partnership may also acquire title individually, if desired. For instance, a deed to Perennial Partnership, a [state] general partnership vests title in the partnership name while a deed to John Doe, Richard Roe, and Sam Snow doing business as Perennial Partnership, a [state] general partnership would serve to vest title in the names of the partners. If, however, title is held in the name(s) of less than all partners, any subsequent conveyance or encumbrance would require execution by all named partners and the authority to act on behalf of the partnership must be verified. 


For normal conveyance purposes, title held in the partnership name must be conveyed in the partnership name, and the deed must be executed by one or more of the general partners, in accordance with the partnership agreement of the general or limited partnership. If the transaction being insured is considered to be in the usual course of partnership business, it is generally not necessary to review the partnership agreement. However, transactions not in the usual course of business require that the partnership agreement be reviewed to ascertain that the transaction is authorized by the partnership and that the appropriate partners execute the requisite instruments. Transactions considered not to be in the usual or ordinary course of business would be a conveyance of partnership property to one or more general partners; conveyances made for nominal consideration; mortgages to secure debts of third parties; and conveyances or encumbrances of all or substantially all partnership assets.