partnership

A business owned by two or more persons that is not organized as a corporation. A voluntary contract between two or more competent persons to place their money, effects, labor, and skill, or some or all of them, in lawful commerce or business, with the understanding that there shall be a proportional sharing of the profits and losses between them. Burr v. Greenland, Tex.Civ.App., 356 S.W.2d 370, 376.

An association of two or more persons to carry on, as co-owners, a business for profit. Uniform Partnership Act, No. 6(1).

Nearly all states have adopted the Uniform Partnership Act. For income tax purposes, a partnership includes a syndicate, group, pool, or joint venture, as well as ordinary partnerships. In an ordinary partnership, two or more parties combine capital and/or services to carry on a business for profit as co-owners. I.R.C. No. 7701(aX2).

See also limited partnership and tiered partnership, below

Partnerships are treated as a conduit and are, therefore, not subject to taxation

The various items of partnership income, gains and losses, etc. flow through to the individual partners and are reported on their personal income tax returns.

@ commercial partnership

See trading partnership.

@ general partnership

A partnership in which the parties carry on all their trade and business, whatever it may be, for the joint benefit and profit of all the parties concerned, whether the capital stock be limited or not, or the contributions thereto be equal or unequal. One in which all the partners share the profits and losses as well as the management equally, though their capital contributions may vary.

@ implied partnership

One which is not a real partnership but which is recognized by the court as such because of the conduct of the parties; in effect, the parties are estopped from denying the existence of a partnership.

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- limited partnership

@ particular partnership

One existing where the parties have united to share the benefits of a single individual transaction or enterprise

@ partnership assets

Property of any kind belonging to the firm as such (not the separate property of the individual partners) and available to the recourse of the creditors of the firm in the first instance

@ partnership at will

One designed to continue for no fixed period of time, but only during the pleasure of the parties, and which may be dissolved by any partner without previous notice

@ partnership by estoppel

Two or more persons who hold themselves out as partners to a third person, when in fact they are not partners, are barred from claiming they are not partners

@ partnership debt

One due from the partnership or firm as such and not (primarily) from one of the individual partners

@ partnership in commendam

A partnership formed by a contract by which one person or partnership agrees to furnish another person or partnership a certain amount, either in property or money, to be employed by the person or partnership to whom it is furnished, in his or their own name or firm, on condition of receiving a share in the profits, in the proportion determined by the contract, and of being liable to losses and expenses to the amount furnished and no more. Secret partnership. One where the existence of certain persons as partners is not avowed to the public by any of the partners.

See partner (dormant partners).

@ special partnership

At common law, one formed for the prosecution of a special branch of business, as distinguished from the general business of the parties, or for one particular venture or subject. A joint adventure under state statutes; such are usually considered "limited partnerships".

@ statutory partnership association

A statutory creation in some states (e.g. Michigan, New Jersey, Ohio) which resembles a corporation more than a partnership, but which has many attributes of the limited partnership.

@ subpartnership

One formed where one partner in a firm makes a stranger a partner with him in his share of the profits of that firm. It is not a partnership but an arrangement in which the subpartner shares in the profits and losses of a partner.

@ tiered partnership

An ownership arrangement wherein one partnership (the parent or first tier) is a partner in one or more partnerships (the subsidiary /subsidiaries or second tier). Frequently, the first tier is a holding partnership and the second tier is an operating partnership.

@ universal partnership

One in which the partners jointly agree to contribute to the common fund of the partnership the whole of their property, of whatever character, and future, as well as present

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