Question

THIS IS A BUSINESS LAW PROBLEM!!!

Describe the decisive factors in determining whether a business organization is a partnership and what factors are used to determine partnership property. Explain in detail. Give examples.

Answer 1

In general terms a partnership business structure indeed refers to a voluntary association of individuals who are termed as the co-owners of the enterprise and propose to perform the business operations to make profit. Thus individuals can form a partnership business either through written or oral contract which indeed facilitates to oversee the partners' state of affairs.

Thus some partnership business may include individuals as well as big firms. Even family members can also form a partnership business however courts normally look strictly at the structure of a family business before recognizing it as a partnership for the benefit of the firm's creditors.

Thus there are certain activities towards the conduct of business which may guide towards the creation of an implied partnership. Normally if an individual gets a part of the revenue from a business enterprise the reception of the profits is deemed to be the confirmation substantiating the existence of a partnership.

However if an individual gets a share of profits as settlement of a liability, salary, rent or annuity then such transactions are considered as confined associations and does not guide towards an officially permitted conclusion that there is a partnership that exists.

An individual in a partnership business can offer his personal property to the partnership however the prearranged property offered can become the partnership property only if there is no other understanding existing and conferred among the partners towards the personal property offered by the partner.

Furthermore if the partnership acquires property with funds contributed from partners in the business then such properties are regarded as partnership property and are accordingly held in the partnership's name. However partnership can transmit or reassign the property but only in the name of the partnership. Thus without the approval of all the partners individual partners cannot put up for sale or transfer the partnership property.