Tags: Good Attention Getters For EssaysEvaluation Essay Novel ReviewWriting Essay ExamsBreakfast Restaurant Business PlanCreative Writing MeaningInfluential Person College Essay
Every state has adopted some form of the UPA as its partnership statute; some states, however, have made revisions to the UPA or have adopted the Revised Uniform Partnership Act (RUPA), which legal scholars issued in 1994. 6; although a community of interest necessarily exists between them and the surviving partners, until the affairs of the partnership are wound up. The authors of the initial UPA debated whether in theory a partnership should be treated as an aggregate of individual partners or as a corporate-like entity separate from its partners.
Early English mercantile courts recognized a business form known as the societas.
The societas provided for an accounting between its business partners, an agency relationship between partners in which individual partners could legally bind the partnership, and individual partner liability for the partnership's debts and obligations.
An association of two or more persons engaged in a business enterprise in which the profits and losses are shared proportionally.
The legal definition of a partnership is generally stated as "an association of two or more persons to carry on as co-owners a business for profit" (Revised Uniform Partnership Act § 101 ).
Certain conduct may lead to the creation of an implied partnership.
Generally, if a person receives a portion of the profits from a business enterprise, the receipt of the profits is evidence of a partnership. The RUPA nevertheless treats the partnership in some instances as an aggregate of co-owners; for example, it retains the joint liability of partners for partnership obligations. As a practical matter, therefore, the present-day partnership has both aggregate and entity attributes. The partnership, for instance, is considered an association of co-owners for tax purposes, and each co-owner is taxed on his or her proportional share of the partnership profits. The formation of a partnership requires a voluntary "association" of persons who "coown" the business and intend to conduct the business for profit. In the context of a gift of a partnership interest, the FMV involved is the FMV of the donor's interest in partnership property, and the debt involved is the donor's share of partnership liabilities. Gain recognition usually occurs when the partner has a negative tax basis capital account.If the debt relief exceeds the donor's basis in his partnership interest, the debt relief is treated as an amount realized in a deemed sale transaction, and the donor must recognize gain (Regs. Some of this gain may be ordinary, depending on whether the hot asset rules of Sec. Any capital gain on the deemed sale may be Example: J is a partner in I Investments Partnership.Consequently, an individual receiving a gift of a partnership interest may have no right to participate in the partnership's management until that consent is obtained. This case study has been adapted from PPC's Tax Planning Guide—Partnerships, 29th Edition, by William D. Accordingly, some partner-ships may contain individuals as well as large corporations. Family members may also form and operate a partnership, but courts generally look closely at the structure of a family business before recognizing it as a partnership for the benefit of the firm's creditors.