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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5888 April 24, 1981 COUNTIES: Duty of county clerk to receive filing of a new certificate of partnership PARTNERSHIPS: Changes in composition not requiring a termination A change in the composition of partners in a partnership through addition or subtraction of a partner does not thereby result in a discontinuance of the partnership and the county clerk is required to receive a new certificate showing the changes so as to inform the public of the composition of the partnership. The Honorable Robert VanderLaan State Senator The Capitol Lansing, Michigan You have requested my opinion on questions concerning the statute governing the filing of copartnership certificates, 1913 PA 164, as amended by 1977 PA 113; MCLA 449.101, et seq; MSA 20.111, et seq. You state that there is a conflict in the interpretation of this statute by certain county clerks who are charged with the duty of filing documents thereunder. Your questions are: 1. What are the filing requirements when composition of an ongoing partnership changes by the addition or delection of a partner when the underlying partnership agreement provides that the addition or deletion of a partner does not discontinue or dissolve the partnership? 2. Will the answer to question 1 be different if the underlying partnership agreement does not provide for the continuance of the partnership when changes in composition occur? 1913 PA 164, supra, Sec. 1, states: 'No 2 or more persons shall hereafter be engaged in carrying on any business as copartners unless such persons shall first make and file with the county clerk of the county in which such copartnership business is or shall be located, a certificate in writing, to be signed by each, and verified by the affidavit of 1 of the members of said copartnership, setting forth the full name of each and every person composing the said copartnership, and the residence of each, the name and style of the firm, and the length of time for which it is to continue, if limited by the partnership contract, and also the locality of their place of business; which certificate shall be kept in the office of the said county clerk, as a public document, and open to the inspection of any person: Provided, That any copartnership that has filed the certificate required by Act No. 101 of the Public Acts of 1907, shall not be required to file the certificate herein provided for.' While 1913 PA 164, supra, does not expressly authorize the filing of an 'amended' certificate, 1913 PA 164, supra, Sec. 2 provides for the filing of a 'new certificate' as follows: 'In case there shall be at any time after the making and filing of said certificate, any change in the name or style of said firm, or in the time of its existence, then a new certificate, verified as before specified, shall in like manner be filed as required by section 1 of this act, before such change shall take effect; and until such new certificate shall have been made and filed, as above specified, the individual members of the firm, as set forth in the certificate on file, shall be held to be the actual members of the firm, and in all respects holden and liable for any obligation, debt or liability, incurred by the said copartnership.' (Emphasis added.) Therefore, when a partnership adds a new partner or drops an old partner, the statute authorizes the filing of a new certificate. Furthermore, 1913 PA 164, supra, Sec. 4, requires that whenever a copartnership operating under an assumed name shall 'go out of business,' one member shall file a certificate of discontinuance. However, the statute does not require that a certificate of dissolution be filed when a partnership adds a new partner or drops an old partner, but the Legislature may amend the statute to so require. It should be noted that a separate and distinct statute, the Uniform Partnership Act, 1917 PA 72, as amended; MCLA 449.1, et seq; MSA 20.1, et seq, governs partnerships in Michigan, as distinguished from 1913 PA 164, supra, governing the filing of partnership certificates. The Uniform Partnership Act does not use the term 'discontinuance' as used in 1913 PA 194, supra, Sec. 4. Rather, the concepts of dissolution and termination are used. The Uniform Partnership Act, supra, Sec. 29 states: 'The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.' Therefore, a change in the composition of partners in a partnership does not require a termination. Section 41 of the Uniform Partnership Act, supra, acknowledges that a partnership may continue with a new partner and specifies the rights and liabilities of the respective parties. The Uniform Partnership Act, supra, Sec. 38 allows partners who have not caused the dissolution wrongfully to continue business by themselves or with others. The purpose of the statute is to inform the public with whom it is dealing and thereby serve its convenience and to prevent imposition and fraud. Maurer v Greening Nursery Co, 199 Mich 522, 524; 165 NW 861, 862 (1917). OAG, 1949-1950, No 1,183, p 499, 500-501 (March 16, 1950), considered whether, upon the death or withdrawal of a partner, the partnership may continue the use of the partnership name which contains the name of the deceased partner and concluded: '[T]he evident intent of both acts [regulating partnership certificates and assumed name certificates] is to provide a public record which shall at all times disclose the true identity of the persons engaged in business under a designated style or name at a particular named location. This purpose will be accomplished only by requiring the filing of a new certificate whenever a change in the personnel composing an organization occurs, which certificate will when filed reflect the change which has occurred and will keep the public records as to the composition of the organization involved true to fact.' In answer to your specific question, it would appear legally permissible to continue the name of a principal who has withdrawn in the name under which business is carried on by an organization as a partnership or as a concern doing business under an assumed name provided the certificate on file as required by the statute shows that such party who had died or otherwise withdrawn is in fact no longer a member of the organization.' OAG, 1949-1950, No 1,183, supra, did not conclude that a certificate of discontinuance be filed prior to the filing of a new certificate in the event the partnership undergoes a change in composition. 1913 PA 164, Sec. 2, supra, requires that a new certificate be filed when the partnership has a change in name and provides for the liability of former members of the partnership in the event a new certificate is not filed. To comply with 1913 PA 164, Sec. 2, supra, the new partnership certificate 'shall in like manner be filed as required by section one of this act.' 1913 PA 164, Sec. 1, supra, requires that 'the full name of each and every person composing the said copartnership' and that said certificate be 'signed by each.' It is, therefore, my opinion that a partnership which experiences a change in its composition by the addition or deletion of a partner may comply with 1913 PA 164, Sec. 2, supra, by filing a new certificate without the necessity of first filing a certificate of discontinuance. Frank J. Kelley Attorney General
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