What makes up a partnership and what makes a joint venture actually a partnership?
Advantage is the lack of formality and the documentation can be kept away from the public. The partners can
claim tax relief for start-up losses.
Factors of a
Partnership
How many people are Need 2 or more people
involved?
What needs to be That you are going to run a business together in common with a view to profit – s1
agreed? This must be through contract – oral or writing or even implied through conduct
Does it matter what No, just that s1 PA is satisfied
the parties Case law in TB
recognise?
What does business That 2 or more persons share responsibility for business and the decisions
in common mean? Basically 2 or more proprietors
Different to employee relationship as employee must accept decisions of employer
and has no right to interfere
- State their business
Does a P have SLP? NO
When may a P be For a specific purpose or for pre-determined period of time or
created? As a P ‘at will’
Can the 2 or more They can be – where companies form joint ventures to take on new projects
people be
companies?
What rights and Right to be involved in decision making
responsibilities of the Right to share in profits
partners are Right to examine the accounts
fundamental? Right to insist on openness and honesty
Right to veto introduction of new partner
Responsibility for sharing losses made
All of these can be excluded or varied by an agreement governing the relationship –
but they could go so far as to deny the relationship as a P
Do you need a written There are no necessary formalities, but an agreement is invaluable as evidence of
agreement? the relationship and its terms.
It may provide solutions to disagreements
It ensures the undesirable parts of PA are avoided
Formalities in Para 13.4.1 TB
considering a
business name
What sections apply? Ss1 – 2 PA
Other questions that Who owns the P assets?
could be asked
Advantage is the lack of formality and the documentation can be kept away from the public. The partners can
claim tax relief for start-up losses.
Factors of a
Partnership
How many people are Need 2 or more people
involved?
What needs to be That you are going to run a business together in common with a view to profit – s1
agreed? This must be through contract – oral or writing or even implied through conduct
Does it matter what No, just that s1 PA is satisfied
the parties Case law in TB
recognise?
What does business That 2 or more persons share responsibility for business and the decisions
in common mean? Basically 2 or more proprietors
Different to employee relationship as employee must accept decisions of employer
and has no right to interfere
- State their business
Does a P have SLP? NO
When may a P be For a specific purpose or for pre-determined period of time or
created? As a P ‘at will’
Can the 2 or more They can be – where companies form joint ventures to take on new projects
people be
companies?
What rights and Right to be involved in decision making
responsibilities of the Right to share in profits
partners are Right to examine the accounts
fundamental? Right to insist on openness and honesty
Right to veto introduction of new partner
Responsibility for sharing losses made
All of these can be excluded or varied by an agreement governing the relationship –
but they could go so far as to deny the relationship as a P
Do you need a written There are no necessary formalities, but an agreement is invaluable as evidence of
agreement? the relationship and its terms.
It may provide solutions to disagreements
It ensures the undesirable parts of PA are avoided
Formalities in Para 13.4.1 TB
considering a
business name
What sections apply? Ss1 – 2 PA
Other questions that Who owns the P assets?
could be asked
