G. Partnerships - General Partnerships

Question 1

What is required for General Partnership?*

Answer 1

1) 2 or more persons
- Individual
- Entity

2) Co-ownership

3) For profit
- Sharing of profits
- NOT sharing of revenues
- NOT debt/wages/rent payments
- NOT interest on loan
- NOT consideration for sale of business

4) Written partnership agreement
- NOT always necessary

NO subjective intention required

Question 2

What if written partnership agreement does NOT exist?*

Answer 2

Partnership agreement may be determined by;

• Parties’ conduct/intention/relationship
• Parties’ sharing of profits/losses
• Parties’ asset ownership/joint management + control/joint liability to creditors

Question 3

What is the rule of liability for partners?*

Answer 3

Jointly + severally liable for;

• Debts/Obligations of Partnership
• Loss/Injury to TPs chargeable to Partnership due to Partner’s torts/breach of trust