Drafting General Partnership Laws on the 'Aggregate' or 'Entity' Theory

Peter Winship, Southern Methodist University, Dedman School of Law

Abstract

It has been “a matter of considerable dispute” whether partnership legislation should treat a general partnership as an entity. The dispute is about whether to draft the legislation on the “entity” theory (the partnership is a separate legal entity) or on an “aggregate” theory (the partnership is an association — but not a legal entity — of persons carrying on a business as co-owners). Scotland and civil law jurisdictions (including Louisiana) have long recognized the partnership as an entity. Until the late 19th century, however, partnership law in common-law jurisdictions was judge- made law, and most judges treated partnership issues on the aggregate theory. Only when these common law jurisdictions seriously considered codifying partnership rules and principles did debate about the nature of a partnership become contentious. In England there was far less debate than in the United States. This essay considers the history of the dispute in both jurisdictions.