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Are You My Partner? Is This a Partnership?

This lesson examines the definition of a partnership. It highlights the definition of a partnership and how it differs from the sole proprietorship (the only other business organization that exists without first satisfying formal filing requirements).

It details the characteristics (factors) examined when answering the factual questions Is this a partnership or something else?

The answer to this question is important because different answers may give rise to different legal consequences. If there is a partnership, the parties are partners with the resulting rights and obligations. If there is no partnership, the parties have a different relations -- perhaps employer - employee (principal - agent) or debtor - creditor with different rights and obligations.

Learning Outcomes

On completion of the lesson, the student will be able to:

  1. Define the concept of partnership and the elements courts examine to determine if a partnership exists.
  2. Discuss the differences between a partnership and a sole proprietorship.
  3. Explain the legal consequences associated with being labeled a partner.
  4. Analyze other business relationships that may arise if no partnership is formed.


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