4. Formation Of Partnerships

Question 1

What is required for Partnerships?

Answer 1

1) 2 or more persons
2) Co-ownership
3) For profit

Question 2

Is writing required for partnerships?

Answer 2

Partnership law
- NO

Statute of Frauds
- Yes (if partnership duration exceeds on year)

Question 3

If requirements for partnership are not met, can it still be formed?

Answer 3

By estoppel

- TP reasonable reliance on parties’ representation of partnership

Question 4

What is required for Partner?

Answer 4

Sharing of profits

Question 5

When is Partner not resumed to be Partner?

Answer 5

Debt receipts (as profit)
Wages/other compensation (as profit)
Rent (as profit)
Interest on loans (as profit)
Gross returns (on profit)
Lack of co-ownership relationship (rebuttal)

Question 6

Can partners be liable to other TPs (creditors)?

Answer 6

Yes (if TPs reasonably relied on Partners’ representation)

Question 7

What is status of partnership?

Answer 7

Distinct legal entity from partners