Partnerships in Mississippi

Partnerships are governed by the Mississippi Uniform Partnership Act (“MUPA”), codified at Miss. Code Ann. §§ 79-13-101 et seq.  A partnership is formed where there is an association of 2 or more persons who carry on as co-owners a business for profit, whether or not the persons intend to form a partnership. The owners share, and pay personal taxes on, the profits of the business. Individuals carrying on businesses in partnerships shall be liable for income tax only in their individual capacity, unless for federal purposes the partnership is taxable as a corporation. If so, then the partnership is also taxable as a corporation for state purposes and is subject to all of the corporate tax laws and regulations.

A partnership is an entity distinct from its partners. It may sue and be sued in the name of the partnership.  Property acquired by a partnership is property of the partnership and not of the partners individually. Each partner is an agent of the partnership for the purpose of its business and therefore the partnership is generally liable for any act of a partner. A partnership is liable for loss or injury caused to a person or for a penalty incurred, as a result of a wrongful act or omission or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership. All partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

Relations among the partners and between the partners and the partnership are governed by the partnership agreement. What is not otherwise provided by the partnership agreement is governed by the Act.  Thus, partners should enter into a partnership agreement whereby they can establish the terms and conditions of the partnership relationship and avoid any unwanted default rules of the MUPA.