BU231 Chapter Notes - Chapter 24: Liability Insurance, Legal Personality, Fiduciary
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Partnership: relation between people carrying on a business in common with a view of profit. Consensual and contractual relationship that can be written, oral, or otherwise. People can be partners if they have acted as such because courts look at the substance of the relationship. Partnership act does(cid:374)"t appl(cid:455) to othe(cid:396) asso(cid:272)iatio(cid:374)s like (cid:272)ha(cid:396)ita(cid:271)le e(cid:374)te(cid:396)p(cid:396)ises, joi(cid:374)t t(cid:396)ustees of a(cid:374) estate, or public boards (cid:894)(cid:449)ell dohhhh(cid:895) . Business means every trade, occupation, or profession; does not include every activity carried on for a profit o(cid:449)(cid:374)i(cid:374)g p(cid:396)ope(cid:396)t(cid:455) a(cid:374)d (cid:272)olle(cid:272)ti(cid:374)g (cid:396)e(cid:374)t f(cid:396)o(cid:373) te(cid:374)a(cid:374)ts is(cid:374)"t a (cid:271)usi(cid:374)ess. Isolated t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s u(cid:374)de(cid:396)take(cid:374) togethe(cid:396) does(cid:374)"t (cid:373)ake (cid:455)ou gu(cid:455)s pa(cid:396)t(cid:374)e(cid:396)s. Sharing of profits is an essential element of partnership. Sharing of gross receipts does not create a partnership because this is sharing of costs, not profits! Strong evidence of partnership = sharing profits that coincides with ratio of capital contribution. Another evidence = person receiving profits has taken part in mgmt. of the business.
