Main Content
Partnerships
Updated 1/12/2024 pdw
Best Bike Co. continues to grow, and your friend Biker Bob would like to quit his job as a chartered accountant and join you full time. Biker Bob has all the right skills and plenty to invest, but he's not willing to give up a daring and adventurous life of accountancy to be your wage-laborer—if he's in, he wants to be your partner.
If Bob joins, what does that mean for you? How will you split the profits? What do you do about losses? Does he have to contribute cash to become a partner? What if you want the business to focus on mountain biking but he keeps ordering commuter bikes? Can he bind the business without your consent? And what if he injures someone; will you be liable? How do you even form a partnership?
In this lesson we will cover (1) what a partnership is; (2) how a partnership is formed; (3) how partnerships handle liability and control; and (4) how alternative forms of partnerships differ from general partnerships. These rules are derived from state statutes (expressed here through the Revised Uniform Partnership Act, or “RUPA”).
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