Partnership features

1
Partnership features

• Vicarious liability
• Control
• Profit-sharing
• Loss-sharing
• Capital investment
• Property co-ownership
• Exit
• Fiduciary duties

2
Interrelation of partnership features

• Liability for debtsgt
• Co-managementgt
• Profit-sharinggt
• Exit

3
Definition of partnership issues

• Context does it matter?
• Nature of partnership activity
• Partnership intent subjective/objective
• Objective Co-Ownership indicia (profits,
  control, losses, capital, co-ownership)
• Profit-sharing presumption
• Why important
• What is profit-sharing
• Type of control
• Protected relationships
• Policy factors
• Partnership by estoppel
• Formalities

4
Subjective vs. objective intent
Chicken
5
The partnership determination

• Profit-sharing is presumptively partnership
  unless also protected
• In protected relationship, weigh profit-sharing
  against other evidence
• In unprotected relationship and no other
  evidence against partnership, proponent of
  partnership survives dismissal

6
Hassiepen
Child support
Cynthia and the boys
Kevin and Brenda
Objective partnership Subjective sole
proprietorship
Partnership?
7
Martin v. Peyton
Peyton (defendant creditors)
KN K
Plaintiff creditors
Loan (securities)
Profits control
8
Minute Maid v. United Foods
United Foods
Credit Storage
OJ
U.S. Cold Storage
Special Account
Credits - Debits Allowances, etc. Interest,
etc Parties split the difference
9
Clackamas
Deborah Wells
Employees!
Employees?
CGA

• What if its a. . . .
• Professional corporation?
• General partnership (Sidley)?
• Limited liability partnership or company?