Partnerships

EXAMPLE:

Bella and Edward agree to give Jacob one-fifth of the profits.

EXAMPLE:

Bella and Edward agreed to pay Jacob $15 an hour.

EXAMPLE:

Bella's dad gives Bella and Edward $10,000 to start the site, to be repaid out of ad revenue until paid in full.

EXAMPLE:

Law students Bella and Edward brainstorm one night about a social network website. They tell their nerby computer geek friend Jacob about it, and they agreed that Jacob will create the site, which will be signed by Bella and Edward.

In the absence of any agreed terms,

RUPA will fill in those partnership terms.

Joint tenancy, tenancy in common, tenancy by the entirety, joint property, common property, or part ownership does not in itself establish a partnership,

regardless of whether the owners share any profits made through use of the property [RUPA § 202(c)].

A corporation can be a partner in any business enterprise that it would have the power to conduct by itself,

so long as the enterprise is appropriate under the corporation's articles and bylaws.

1. Partnership agreement may include

specific restrictions on authority.

c. A person who is not a partner is not deemed to know of the limitation on the authority of a partner merely because

the limitation is contained in a filed statement.

2. If a partner acts in contravention of such a restriction, and the third party has knowledge of the restriction,

the partnership will not be bound.

The sharing of gross returns does not in itself establish a partnership whether or not

the person sharing the returns have a joint or common right or interest in any property from which the returns are derived [RUPA § 202(c)].

a. partners, as co-owners of the business, must have

the power of ultimate control.

a. A filed cancellation of a limitation on authority revives

the previous grant of authority.

If the representation is made publicly,

the purported partner is liable to anyone who has knowledge of it and has relied upon it.

A general partnership is an association of

two or more persons to carry on as co-owners of a business for profit.

All that is required to create a partnership under the revised uniform partnership act is

two or more persons who associate to carry on as business for profit.

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v. for the sale of the goodwill of a business or other property by installments or otherwise.

3. A person has knowledge of a fact not only when he has actual knowledge thereof, but also

when he has knowledge of such other facts in these circumstances showing that faith.

The particular way in which the representation came to the third party's attention need not have been

with the purported partner's consent, as long as he made or consented to some sort of public representation.

EXAMPLE:

If two persons, in undertaking a real estate development, so title to the property as tenants in common, they would not thereby form a partnership.

If individuals just act like partners, the law will treat them like partners,

even if they had no idea that they were acting like partners and no intent to do so.

Under the RUPA, a person's receipt of a share of the profits of a business is

evidence that he is a partner in the business [RUPA § 202(c)(3)].

i. Every partner is an agent of the partnership for

for the purpose of his business.

a. When a person has been represented to be a partner in an existing partnership, or with others who are not actual partners,

he is an agent of those consenting to the representation, and he can bind them as if he were, in fact, a partner.

2. Although a partner may be in breach towards his other partners,

he would still have to honor any agreement made with a third party.

His investment in the business,

however, is subject to the claims of creditors, and in some jurisdictions, his investment is sub also to the claims of partners who have not dealt with him fraudulently.

a. Person is defined as [RUPA § 101(10)].

i. An individual; ii. a corporation; iii. a business trust; iv. an estate; v. a trust; vi. a partnership; vii. an association; viii. a joint venture; ix. a government; x. a governmental subdivision; xi. an agency; xii. an instrumentality; or xiii. any other legal or commercial entity.

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i. at will.

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i. for a specific undertaking;

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i. for a term; or

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i. of a debt, by instalments or otherwise;

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ii. for services as an independent contractor, of wages, or of other compensation to an employee;

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iii. of any annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

The key test is whether a partnership has been formed is the

intent of the parties to enter into a partnership relationship, no matter what it is called.

Where there is an official agreement or contract (which is not required),

it may be oral.

If the representation is made privately,

it may be relied upon only by those to whom it was made.

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iv. of interest or other charge on a loan, even if the amount of payment varies with the profits of the business; or

2. Restrictions on authority are ineffective against a third party without

knowledge of the restriction.

Even if a voluntary partnership does not exist

liability may be imposed on a person who has let it appear that he is in a partnership if a creditor is thereby misled.

When a person come up by words or conduct, represents himself to be a partner in an existing partnership, or with one or more persons who are not actual partners, he is

liable to anyone who has extended credit in reliance on the representation of partnership.

2. A partner may have apparent authority based on the nature and course of business of the partnership, or

on the custom in similar partnerships in the same area.

4. Unless previously cancelled, a filed statement of partnership authority is cancelled by

operation of law five years after the date on which these statement, or the most recent amendment, was filed with the Secretary of State.

i. A person who is not a partner is deemed to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a certified copy of the filed statement containing the limitation on authority is of record in the office for recording transfers of that real property.

The recording of a certified copy of a filed cancellation of a limitation on authority revives the previous grant of authority.

If the partnership agreement was merely implied,

other factors must be considered.

a. Except for transfers of real property, a grant of authority contained in a filed statement of partnership authority is

conclusive in favor of a person who gives value without knowledge to the contrary, so long and to the extent that a limitation on that authority is not contained in another filed statement.

2. May state the authority, or limitations on the authority, of some or all of the partners to

enter into transactions, or any other matter, on behalf of the partnership.

Any person who has the capacity to enter into a contract

a. can enter into a partnership agreement.

Partnerships, societies, and other associations can also

a. enter into partnerships with other persons or entities.

If partnership liability results,

a. the purported partner is liable as though he were a partner; if no partnership liability results, he is liable jointly with the others consenting to the representation.

if a person shares in the profits, but lacks any power to control, he is probably

an agent, and is receiving his profit share merely as in incentive or a bonus, unless the agreement shows a contrary intent.

b. If all the members of an existing partnership consent to such a representation,

any liability is a partnership obligation; otherwise, the person acting and the partners consenting to the representation are jointly and severally liable.

3. However, an act of a partner that is not apparently for carrying on in the ordinary course of business of the partnership does not

bind the partnership unless authorized by the other partners.

A minor can enter into a partnership,

but he may avoid the partnership agreement on the basis of his infancy.

1. a partner may have express authority to act by the terms of the partnership agreement, or

by consent to the other partners.

b. A grant of authority to transfer real property held in the name of the partnership is also

conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that the authority is contained in a certify a copy of a filed statement recorded in the office for recording transfers of that real property, and no certified statement containing a limitation on that authority is of record in such office.