A mining partnership exists when two or more persons who own or acquire a mining claim for the purpose of working it and extracting the mineral therefrom actually engage in working the claim. To the extent not inconsistent with this chapter, mining partnerships shall be governed in the same manner as other general partnerships would be governed pursuant to Section 16111 of the Corporations Code, by the Uniform Partnership Act (Chapter 1 (commencing with Section 15001) of Title 2 of the Corporations Code), or the Uniform Partnership Act of 1994 (Chapter 5 (commencing with Section 16100) of Title 2 of the Corporations Code).
Chapter 2Mining Partnerships
Section § 3940
This law explains that a mining partnership forms when two or more people own or buy a mining claim and actively work on it to extract minerals. While there are specific rules for mining partnerships, they generally follow the same rules as regular partnerships according to other partnership laws in California.
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Section § 3941
You don't need a formal agreement to create a mining partnership. If you own a share in a mine and work it to extract minerals, you're already in a partnership.
An express agreement to become partners or to share the profits and losses of mining is not necessary to the formation or existence of a mining partnership. The relation arises from the ownership of shares or interests in a mine and working it for the purpose of extracting the minerals therefrom.
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Section § 3942
This law explains how profits and losses are divided among members of a mining partnership. Each member receives a share of profits or losses based on how much of the mining partnership they own compared to the total ownership of the partners.
A member of a mining partnership shares in the profits and losses thereof in the proportion which the interest or share he or she owns in the mine bears to the whole partnership capital or whole number of shares.
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Section § 3943
If you're part of a mining partnership, you have a right, called a lien, to claim the partnership's property to cover any debts owed by the partnership or if you've put money into the partnership. This right exists even if there's an agreement to the contrary between the partners.
Each member of a mining partnership has a lien on the partnership property for the debts due the creditors thereof, and for money advanced by him or her for its use. This lien exists notwithstanding that there is an agreement among the partners that it shall not.
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Section § 3944
This law states that any land used for mining by a partnership is considered property of the partnership, regardless of whether it was bought with the partnership's money or not.
The mining-ground owned and worked by partners in mining, whether purchased with partnership funds or not, is partnership property.
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Section § 3945
If you're part of a mining partnership, you can sell your share of the mine and the business to someone else. This won't end the partnership, and the new owner will join as a partner from the day they buy in.
One of the partners in a mining partnership may convey his or her interest in the mine and business without dissolving the partnership. The purchaser, from the date of his or her purchase, becomes a member of the partnership.
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Section § 3946
If someone buys interest in a mining partnership, they inherit any debts or liens owed to the partners, unless they purchased it honestly, paid fair value, and didn't know about those debts or liens.
A purchaser of an interest in the mining-ground of a mining partnership takes it subject to the liens existing in favor of the partners for debts due all creditors thereof, or advances made for the benefit of the partnership, unless he or she purchased in good faith, for a valuable consideration, without notice of that lien.
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Section § 3947
If you buy a partner's share in a mining operation while the partnership is actively working the mine, you are responsible for any debts or liens that come from the partner relationships or the partnership's creditors.
A purchaser of the interest of a partner in a mine when the partnership is engaged in working it, takes with notice of all liens resulting from the relation of the partners to each other and to the creditors of the partnership.
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Section § 3948
In a mining partnership, no individual member or manager can sign a contract on behalf of the partnership unless they have been explicitly given permission by all the members of the partnership to do so.
No member of a mining partnership or other agent or manager thereof can, by a contract in writing, bind the partnership, except by express authority derived from the members thereof.
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Section § 3949
If more than half of the people who own shares or interests in a mining partnership agree on something, that decision affects how the business is run.
The decision of the members owning a majority of the shares or interests in a mining partnership binds it in the conduct of its business.
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Section § 3950
This law states that the rules in this chapter do not cover activities related to extracting oil, gas, and other hydrocarbons.
This chapter does not apply to any operations for the extraction of oil, gas, and other hydrocarbons.
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