Also known as: perpetual durations · perpetuity
Written by attorneys · grounded in primary & secondary sources — see below
An attribute of a legal entity or estate by which its existence continues indefinitely unless terminated by specified events or legal process.
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Patricia Patel forms Pinnacle Holdings as an LLC to manage rental properties. After Patricia withdraws and transfers her interest, the company continues to collect rents and enter new leases without interruption or dissolution proceedings.
Pablo Perez and Parker Phillips form Premier Manufacturing as a limited partnership. When Parker dies, the partnership continues operations under the remaining partner and admits a new limited partner without filing dissolution documents.
Penelope Price incorporates Phoenix Technologies under articles that omit any duration limit. Decades later the board amends the articles for a name change but leaves the duration provision unchanged, allowing the corporation to continue contracting and issuing stock indefinitely.
Patrick Phan sues Patriot Insurance on behalf of a class of policyholders. The court approves a settlement that binds future claimants because the insurer's corporate existence continues without a fixed termination date.
Peter Park and his siblings incorporate a family business. After all original shareholders die, the corporation remains intact and continues to operate under new directors elected by later shareholders.
No. Perpetual duration means the entity's existence continues indefinitely unless terminated by events such as bankruptcy liquidation, shareholder vote, or merger. The uniform acts and model code expressly allow termination under those circumstances.
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Both concepts describe potentially infinite existence. In business entities the term is statutory. In land estates it arises from the absence of any durational limit in the granting language.
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Yes. The Model Business Corporation Act provides that every corporation has perpetual duration unless its articles of incorporation state otherwise.
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…476, 479 (1902). The stockholders “clothe” their partnership “with the benefits peculiar to a corporation, limited liability, perpetuity and the like.” In the Matter of Surchin v. Approved Bus. Mach. Co. Inc. , 55 Misc. 2d (N. Y.) 888, 889 (Sup. Ct. 1967). In essence, though, the enterprise remains one in which ownership is…