Uniform Partnership Act (UPA/RUPA)

The model law adopted by every US state that sets default rules for general partnerships. Its most consequential rule: profits split equally among all partners, regardless of who put in more money, time, or effort.

Why it matters

If you run a business with someone and never wrote a partnership agreement, the UPA or RUPA is your partnership agreement. Your state legislature wrote it, and it applies automatically. The most important default rule is the equal profit split — every partner gets the same share regardless of contribution. One partner invested $200,000, the other invested nothing? Equal split.

This default catches most business owners off guard. They assume that ownership naturally follows investment or effort. It doesn't. Under both UPA and RUPA, the default is strict mathematical equality unless a written agreement says otherwise.

Beyond profit splits, the UPA/RUPA sets defaults for management authority (equal rights), liability (joint and several), and what happens when a partner leaves. The difference between UPA and RUPA on that last point is significant enough that it can determine whether your business survives a partner's departure.

UPA vs RUPA

The original UPA (1914) treats a partnership as an aggregate of its partners. The partnership is inseparable from the people in it. When any partner leaves — voluntarily or otherwise — the partnership legally dissolves. The business might continue, but the legal entity ends and must be reformed.

RUPA (1997) treats the partnership as a separate entity, independent of its individual partners. A partner can dissociate (leave) without triggering dissolution. The remaining partners can buy out the departing partner's interest and keep operating. This is a fundamental practical difference for any business where partner turnover is a possibility.

About 40 states have adopted RUPA. Roughly 9 states — including New York, Massachusetts, Michigan, and Pennsylvania — still use the original UPA. Louisiana has its own civil law system and follows neither. You can see exactly which version your state uses in our state-by-state partnership laws directory.

How it works

UPA and RUPA defaults kick in when two or more people carry on a business for profit without forming a separate legal entity (like an LLC or corporation) and without a written partnership agreement. The key default provisions include:

• Equal profit and loss sharing. All partners share equally, regardless of capital contribution.
• Equal management rights. Every partner has equal say in ordinary business decisions.
• No salary for partners. Partners are not entitled to compensation for services rendered to the partnership.
• Unlimited personal liability. Every partner is personally liable for all partnership debts and obligations.
• Fiduciary duties. Partners owe each other duties of loyalty and care.

Nearly all of these defaults can be overridden by a written partnership agreement. The exceptions are the duty of good faith and fair dealing, which cannot be eliminated, and certain basic rights like access to partnership books and records.

History and origin

The original UPA was drafted in 1914 by the National Conference of Commissioners on Uniform State Laws (NCCUSL, now the Uniform Law Commission). It was designed to create consistency across state partnership laws, which had been highly variable. By 1950, every state had adopted some version of the UPA.

The Revised Uniform Partnership Act (RUPA) followed in 1994 and was amended in 1997. Its most significant change was treating the partnership as a separate entity rather than an aggregate of partners. This shift had practical consequences: partnerships could own property in their own name, partners could transfer their economic interest without dissolving the partnership, and a partner's departure no longer automatically ended the business. RUPA adoption has been gradual, with some states still operating under the original UPA.

Frequently asked questions

What is the Uniform Partnership Act?

The Uniform Partnership Act (UPA) is a model law that provides default rules for general partnerships. First drafted in 1914 and revised in 1997 (as RUPA), it governs how partnerships split profits, make decisions, and dissolve when no written partnership agreement exists. All 50 US states have adopted some version of the UPA or RUPA.

What is the difference between UPA and RUPA?

The original UPA treats a partnership as an aggregate of its partners — when any partner leaves, the partnership legally dissolves. RUPA treats the partnership as a separate entity — a partner can leave without dissolving the partnership, and the remaining partners can buy out the departing partner's interest and continue operating. About 40 states have adopted RUPA, while roughly 9 still use the original UPA.

Does the UPA require equal profit splits?

Yes. Under both UPA and RUPA, the default rule is that all partners share profits equally, regardless of how much capital each partner contributed. This default only applies when there is no written partnership agreement that specifies a different arrangement.

Can you override UPA default rules?

Yes. UPA and RUPA defaults are fallback rules that apply only when partners haven't agreed to something different. A written partnership agreement can override nearly all default provisions, including profit splits, decision-making authority, buyout terms, and dissolution triggers. The few provisions that cannot be overridden include the duty of good faith and fair dealing.

Learn more

• Does your small business need an equity agreement?
• Equity for small businesses: partnerships, LLCs, and profit-sharing explained
• Partnership and LLC default rules by state

Related terms

• Operating Agreement
• Community Property
• Buy-Sell Agreement
• Dead Equity
• Dynamic Equity