Question

Robyn and Austin are co-owners of a tract of land that they plan to sell one day. A court would likely find that their co-ownership of a tract of land is not a partnership based on which of the following elements?
a) profit and loss sharing
b) management of the business
c) joint ownership of the busniess
d) joint property ownership

Answer 1

Answer:

d) joint property ownership

Explanation:

A partnership is created by two or more individuals who combine resources, skills, and energies to start a business. The motive for starting the business is profits.  The partnership deed guides the formation of a partnership business. Partners may also draft an agreement on how they will share profits, losses, or assets should be business be dissolved.

Partners contribute capital required to start and operate the business. The capital contributed may be in the form of cash, assets, or properties.  The contributed capital becomes part of the business assets. The assets are registered under the partnerships' name. For Robyn and Austin, the land will be in the name of their business if they have a partnership business.  But if they jointly own the land, a court may rule that they are not in a partnership business.