Partnership Essay Flashcards
When does a partnership exists?
where the parties agree and intend to enter into a relation “in which the elements of partnership may be found. “
Elements of a partnership:
- voluntary association
- of 2 or more people
- with legal capacity to carryon
- a for-profit business
Co-ownership of the business requires more than merely joint ownership of the property and is usually evidenced by joint control and the sharing of profits and losses.”
What Statute governs MI Partnerships
Michigan Unifomr Partnership Act
Test in MI to determine if a Partnership exists:
the test to be applied in determining whether a partnership existed is to examine the acts, declarations and conduct of the parties in relation to the business and from the nature and scope of the business in which the acts are committed
Do parties have to label themselves as parters to have a partnership?
No.
the proper focus is on whether the parties intended to, and in fact did, ‘carryon as co-owners a business for profit’ and not whether the parties subjectively intended to form a partnership”
“The gist of the partnership relation is mutual agency and joint liability.”
Who establishes burden for partnership’s existance?
The party alleging the partnership has the burden of proving that it exists.
In MI when does a fiduciary relationship arise?
In Michigan, a fiduciary relationship arises from “the reposing of faith, confidence, and trust and the reliance of one upon the judgment and advice of another.”
Fiduciary relationships between partners?
- duty of honesty,
- duty of good faith, and
- duty of full and frank disclosure of all relevant information.
Harper v. Warju
the Court of Appeals found a partnership did exist where both parties contributed a portion of a down payment on a residence, purchasing the property together, with the agreement to split expenses equally with the goal of building quick equity
Documents to formalize a partnership
- Certificate of partnership
- a partnership agreement
