Partnership

Question 1

Whether a partnership exists?

Answer 1

A partnership is a voluntary association of two or more people with legal capacity to carry on as co-owners, a business for profit. No formalities are needed to create a partnership.

Co-owners have more than mere joint ownership of the property, and it is usually evidenced by joint control & the sharing of profits and losses. Profit sharing is prima facie evidence that the person is a partner in the business with a few exceptions. Other indicia of a partnership include mutual agency (ie. partners can bind the partnership), joint liability, a partnership agreement, contributing capital, filing a certificate of the business and a common interest in the capital

Question 2

Burden of Proof

Answer 2

party alleging partnership has burden of proof by the PREP OF EVIDENCE, unless partners are relatives then CLEAR AND CONVINCING EVIDENCE

Question 3

Breach of a fiduciary duty

Answer 3

Partners are in a fiduciary relationship with one another and must act with honesty and in good faith. They have a duty to

1) render a full and frank disclosure of all relevant info
2) of loyalty to no usurp corporate opportunities for their own benefit
3) duty of care - partners must act with ordinary care
4) duty to account - every partner must account for any profit and hold any profits as trustee for the partnership