Forming a General Partnership

Question 1

What is a Partnership?

Answer 1

An association of two or more persons to carry a business for profit as co-owners

Question 2

Partnership Formation Requirements

Answer 2

(1) TWO OR MORE PERSONS (individual or legal entity)

(2) INTENT to carry on business for profit as co-owners

Question 3

Partnership Agreement

Answer 3

Can be verbal/implied

Does NOT need to be written

Question 4

Statute of Frauds

Answer 4

Written agreement not required, but k that cannot be performed in one year must be in writing under SOF

Question 5

Extensive Activity

Answer 5

Court will consider amount of related activities designed to obtain a specific business purpose when determining whether a partnership exists

Question 6

Profit Sharing Test

Answer 6

If theres is PROFIT sharing, presumed to be a partnership

Question 7

Exceptions to Profit Sharing

Answer 7

Does not create presumption of partnership when profits used to:

(1) Pay debt
(2) Pay interest
(3) Pay rent
(4) Pay wages/compensation
(5) Goodwill payments from sale of business
(6) Pay retirement or health benefits

Question 8

Joint Venture

Answer 8

Just a different name for a partnership

Question 9

Partner by Estoppel

Answer 9

Person may be treated as a purported partner if:

(1) There is a REPRESENTATION that a person is a partner in a partnership;
(2) The person MAKES OR CONSENTS to the representation;
(3) Third party REASONABLY RELIED on the representation; and
(4) Third party must have given credit to the actual or apparent partnership

Question 10

Partner by Estoppel: No Duty to Deny

Answer 10

Merely being named as a partner by another is not enough

Look for consent to the representation by the defendant

Question 11

Partner by Estoppel: Public Holding Out

Answer 11

if the representation of partnership is very public, the defendant may not be able to defend by claiming she was unaware of the representation