Partnerships

Question 1

Does a Partnership Exist?

Answer 1

A partnership is:

1) A voluntary association
2) Of two or more people with the legal capacity
3) To carry on as co-owners of a business for profit.
- It can be husband and wife

(No formalities are required.) Look for:
- Profit and loss-sharing, a partnership agreement, etc.

MI SC: intent to form the partnership is not enough.

Question 2

What is the burden of proof needed to establish a partnership exists?

Who carries the burden of proof needed to establish a partnership exists?

Answer 2

Burden: preponderance of the evidence. But if the parties are related, the standard is clear and convincing evidence.

The burden of proof to show a partnership is on the party alleging the partnership.

Question 3

Fiduciary Duties

Answer 3

Partners are in a fiduciary relationship with each other. They must act with honesty and good faith.

1. Duty to render information
2. Duty of loyalty
3. Duty to account for any profits