Partnerships

Question 1

What is the general rule for formation of a partnership?

Answer 1

A partnership is the ASSOCIATION of two or more persons to carry on a FOR-PROFIT BUSINESS as CO-OWNERS

Question 2

How is liability apportioned in a partnership for debts?

Answer 2

Partners are jointly and severally liable.

Incoming partners are not personally liable for debts incurred prior to their joining.

Outgoing partners are personally liable for debts incurred during their time at the partnership.

Question 3

What duties do partners owe?

Answer 3

Fiduciary duties, duties of loyalty, duties of care, and duties to account

Question 4

What are the three steps to termination?

Answer 4

1) Dissolution, 2) Wind Up 3) Termination

Question 5

What is the presumption associated with profit sharing?

Answer 5

That the individual is a partner, unless the payment paid a debt, rent, wages, etc.