Ba--Partnerships Intro

Front 1

Partnership--Inro

Back 1

association of 2 or more persons to carry on as co-owners of a business for profit

Front 2

P--Aggregate

Back 2

• Partnership is viewed as an aggregation of individuals
• Partners personally liable for any activity undertaken in context of partnership
• Partners may be indebted to each other
• Property is always held in joint tenancy by all partners
• Property may not be held in partnership name and is not transferable by deed of partnership
• All obligations in contract are joint obligations of partners

Front 3

P-Entity

Back 3

• Viewed as an entity separate and distinct from partners
• “Legal person” not related to individual partners
• Partnership itself – without using names of partners – may sue, be sued, acquire property, create contractual relations, and be accorded all rights of natural person
• Partner’s relationship to co-partners and 3rd parties is determined by the partnership and not each partner in his individual capacity

Front 4

P-UPA

Back 4

fails to distinguish b/t the 2 theories
recognizes entity bc it permits P to aqquire and convey propery

Front 5

P-Advantages

Back 5

[1] Ease of Creation
• Agreement can be written or oral or can be implied from words or conduct

[2] Single Taxation
• For tax purposes, partnership is not a separate entity
• Not taxed on its profits
• Individual partners are taxed for their proportionate share of profits
• Losses of partnership are taken proportionally by partners
• Favorite form of organization for “tax shelters”

[3] Management and Ownership
• Each partner is agent of partnership (can bind partnership within scope)
• Each partner has equal authority in management, unless agreement says otherwise

Front 6

P-For Profit

Back 6

• Must operate for profit – as such, non-profit can’t be a partnership
• Conditioned on attempt of partners to generate a profit
• Fact that business actually loses money does not affect the partnership relationship