RSM225H1 Study Guide - Final Guide: Insider Trading, General Partnership, Derivative Suit
26 Nov 2012
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General partnership creation: partnership act - gpp arises automatically if 4 requirements met: (1) 2 or more legal entities (e. g. individuals, corporations) (2) carrying on a business. Usually ongoing transactions, active commercial enterprise [not passive investment] (3) jointly operating the same business together. Distinguished from employer & employee relationship (4) to make and share profits **strong indicator of ggp. Sharing revenues & expenses: indicators of gpp: pp act rules: Pp act rules may be helpful where not clear whether requirement (2) or (3) above is met. Sharing profit is considered strong indication of gpp. Sharing profit + managing the business is even stronger indication of gpp. But sharing profit for the following reasons is no indication for or against existence of gpp: Part of purchase price for business to repay debt (i. e. debt paid only from profits: relevance of parties agreeing whether they are partners:
