Partnership generally & General partnership formation Flashcards
Five issues in partnership
I. General partnership formation
II. Liabilities of general partners to 3rd parties
III. Rights and liabilities between general partners
IV. General partnership dissolution
V. Alternative unincorporated business organizations
Formalities and of partnership
Partnership definition: a. An association of 2 or more persons who are carrying on as co-owner of a business for profit.
a. No formalities required to form.
b. Therefore, it is the default form of an organizatio
Formed whenever you have profit sharing.
a. The contribution of money or services in return for a share of profits creates a presumption that a general partnership exists.
b. A “paying in” of money or capital for a share of profits.
c. NOT IN RETURN FOR SALARY OR OTHER COMPENSATION or wage or fixed rate of interest.
Partnership property
a. What is includable in partnership property—
i. Titled property—RUPA provisions
1. Property is deemed to belong to the partnership if
a. Titled in partnership name or
b. Titled in name of one or more partners and the instrument transferring title notes the titleholder’s capacity as a partner or the existence of a partnership
2. Presumed to belong to the partnership if it is purchased with partnership funds, including partnership credit.
- Presumed to be partner’s separate property if
a. Held in name of one or more partners
b. Instrument doesn’t indicate persons capacity as partner and doesn’t mention existence of a partnership
c. Partnership funds weren’t used to acquire
d. Rebuttable presumption—even if the property was used for partnerhship purposes
ii. Untitled property—common law citeria. Many factors
1. Whose funds were used
2. Was it used by partnership in conducting business
3. Entry into books as partnership assets
4. Relationship between the property and the business operations
5. Improvement of property with partnership funds
6. Maintenance of property with partnership funds
