Formation and Relationships

Question 1

What intent is required to form a partnership?

Answer 1

two or more persons or entities must intend to carry on a for-profit business as co-owners but do not need specific intent to for a partnership

Question 2

What is a partnership agreement?

Answer 2

an agreement to conduct a for-profit business as co-owners

can be implied by conduct in absence or oral or written agreement

Question 3

When does the statute of frauds apply?

Answer 3

a written agreement is not required for formation, but a contract that cannot be performed in one year must be in writing

Question 4

When can extensive activity created a partnership?

Answer 4

a court will consider the amount of related activities directed toward achieving a business’s end goal when determining whether a P exists

Question 5

What is the profit-sharing test?

Answer 5

Used to determine formation of partnership.
Rule: if there is profit shaing, it is presumed to be a P

Question 6

What are the exceptions to the profit sharing test?

Answer 6

sharing profits does not create a presumption for:
1) debt payments
2) interest or loan charges
3) rent
4) wages
5) good will payments from the sale of the business
6) annuities or ther retirement or health benefits

Question 7

What are the two senarios in which a someone is a partner by estoppel?

Answer 7

Case 1: P does not exist but a person is treated as a partner of a purported P
Case 2: P exists and a person who is not a partner of P is treated as a partner of P

Question 8

What are the elements of a partner by estoppel?

Answer 8

• there is a representation (oral written or implied) that a person is a partner
• the person makes or consents to the representation
• a third party reasonably relied on the representation, and
• the third party suffered damages as a result of that reliance

Question 9

If someone is deemed a partner under a partner by estoppel theory is the purported partner and the partnership liable?

Answer 9

Yes

Question 10

Does a person have a duty to deny the representation of being a partner?

Answer 10

No, merely being named by another is not enough to create liability

Question 11

If the respresentation that someone was a partner was made in a public manner, is it a defense they were unaware?

Answer 11

No

Question 12

Purported partners are ____ of the person making the representation?

Answer 12

agents

Question 13

Can a partnership hold property?

Answer 13

Yes

Question 14

Can a partnership sue and be sued?

Answer 14

Yes