Class_7_Partnership_bb

Class_7_Partnership_bb - Partnership Class 7 Today What is...

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Partnership Class 7
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Today What is a Partnership Fenwick v. Unemployment Compensation Commission Martin v. Peyton Southex Exhibitions Inc. v. Rhode Island Builders Young v. Jones Fiduciary Obligations of Partners Meinhard v. Salmon
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What is a partnership? § 6(1) UPA A partnership is an association of two or more persons to carry on as co-owners a business for profit. See § 202 RUPA No formalities required for formation Parties intent to form partnership not important
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Key characteristics of Partnerships 4 All owners (partners) are liable as principals All partners are general agents of the partnership § 9 UPA / § 301 RUPA All general partners are jointly and severally liable for debts of the business (like single principals) § 15 UPA / § 306 RUPA All partners share equally in control (unless they agree otherwise) § 18 UPA /
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Fenwick v. Unemployment Compensation Commission 5 Facts
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The Agreement Between Fenwick and Cheshire Is an agreement necessary to create a partnership? Yes. “Partnership results from contract….” ( Martin v. Peyton , p. 93) UPA § 6(1): There must be an association of two or more parties to act as co-owners of a business (§202 RUPA adds “whether or not the persons intend to form a partnership”) 6
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The Agreement Between Fenwick and Cheshire Is an agreement necessary to create a partnership? Is a written agreement necessary to create a partnership? No ( Fenwick dicta, p. 85) 7
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The Agreement Between Fenwick and Cheshire Is an agreement necessary to create a partnership? Was a written agreement necessary to create a partnership? Was the existence of a written agreement determinative? No. 8
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Analysis 9 What was Fenwick’s strongest argument? UPA § 7(4) “In determining whether a partnership exists: … (4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business…
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Division of Profits 10 If division of profits = prima facie partnership, why did the court treat Chesire as an employee rather than a partner? But inference can be overcome if profits received were really wages of an employee (§ 7(4)(b)) What else is missing? Capital contribution Loss-sharing
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Rights and Duties of Partners § 18 UPA provides default rules (a) Partners share equally in profits & contribute to losses according to share in profits (e) All partners have equal rights in the management and conduct of the partnership business (g) No person can become a member of a partnership without the consent of all partners (h) any difference arising as to ordinary
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Planning 12 How might a lawyer draft a "partnership" agreement to make it appear that Chesire had control consistent with the UPA, (without in fact depriving Fenwick of the dominant position)? What happens in dissolution? Is Chesire a
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This note was uploaded on 10/18/2011 for the course LAW 700 taught by Professor Kim during the Spring '10 term at USC.

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Class_7_Partnership_bb - Partnership Class 7 Today What is...

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