Chapter Ten Pt 2- Partnerships

Question 1

Activities that create a partnership

Answer 1

• Sharing profits
• joint contribution of capital
• intention to share expenses, profits, or losses
• joint participation in the management of a business

Question 2

Activities that do not create a partnership

Answer 2

• owning property
• debt repaid
• when the beneficiary of a deceased partner receives the deceased partner’s share of profits
• loan paid in interest
• when a business is sold and the payment of the goodwill portion varies with profitability of business

Question 3

Can the courts find a partnership even if the parties say they aren’t in one in an agreement?

Answer 3

Yes.

Question 4

Can a partnership relationship stride out of estoppel (explain)

Answer 4

Yes, if a party represents to a TP they are a partnership and that representation is relied on, the existence of the partnership cannot be denied

Question 5

Vicarious liability in partnerships

Answer 5

All partners are vicariously liable in tort for both careless and intentional conduct of their partners in business activities & employees

Question 6

Unlimited liability in partnerships

Answer 6

If assets do not satisfy creditors, partners must make difference out of own funds

Question 7

Partners liability as a “team” or “separately”

Answer 7

Most provinces partners are only jointly liable not jointly and severly
-must be included in original action otherwise irrelevant unless in case of wrongful conduct