Partnership Creation

Question 1

Partnership (Definition)

Answer 1

An association of two or more persons to carry on as co-owners of a business for profit (whether or not the persons intend to form a partnership, RUPA).

Question 2

Association (Definition for Partnership)

Answer 2

Indicates a sense of voluntariness, that the two people want to go into business together.

Question 3

Person (Definition for Partnership)

Answer 3

Human individual or a business entity

Question 4

Co-Ownership (Definition for Partnership)

Answer 4

Ownership involves the ultimate power of control; for their to be co-owners, each must have the power of control.

Question 5

Business (Definition for Partnership)

Answer 5

Indicates any sort of purposeful organization, includes any trade, occupation, or profession

Question 6

Profit (Definition for Partnership)

Answer 6

In the arrangement to make money.

Question 7

Determination of Whether Partnership has Formed

Answer 7

(1) Joint tenancy in common does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.

A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

(1) of a debt by installment or otherwise
(2) of rent
(3) for services as an IC
(4) of interest or other charge on a loan
(5) of an annuity

Question 8

Ownership of Partnership Property

Answer 8

UPA: Includes all property originally brought into the partnership or subsequently acquired is partnership property
RUPA: all property purchased with partnership funds

Question 9

Partners Ownership of the Partnership

Answer 9

Individual partners can only assign their residual interest in the entire partnership. This is also the only partnership interest that the partner’s individual creditors can reach.

Individuals do not own an interest in any particular partnership asset.