Question

2. Alex, Becky, Cindy, Deanna and Elias form a general partnership, Glorious Jeans, to manufacture coffee-colored clothing. Alex contributes 40% of the capital, Becky contributes 30% of the capital, Cindy contributes 20% of the capital, Deanna contributes 10% of the capital, and Elias agrees to design all the clothes. Under the UPA, how will the partners share the profits of their partnership? What would cause the UPA not to govern?

Answer 1

Answer:

Under the UPA ( uniform partnership act ) the partners share the profits of the business according to their contributions towards the business ( mostly financial contribution)

The UPA is used to address the issues of profit and loss sharing in a business partnership based on financial contribution towards the business and not based on service rendered to the business hence it won't work in this situation

Explanation:

Under the UPA ( uniform partnership act ) the partners share the profits of the business according to their contributions towards the business ( mostly financial contribution), the primary purpose of the uniform partnership act to to address certain in-formal or formal issue that was not addressed under the business agreement reached between the partners,

The reason why the UPA might not govern the sharing of the profits is because of the involvement of a partner who did not contribute towards the capital but contributes in terms of service. The UPA is used to address the issues of profit and loss sharing in a business partnership based on financial contribution towards the business and not based on service rendered to the business hence it won't work in this situation