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CA Partnership or Not ???

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Agreement to form a partnership in california, where an attorney drafted a Partnership agreement, both parties agreed to sign the agreement but when it came time to sign one party refused to sign.

Business has been conducted for 7 months, with the only assests being appox. 14,000.00 in receivables.

The party who refused to sign has now withdrawn and whats 50% of the receivables.

The catch is the "Uniform Partnership Act" which states:
The sharing of gross returns does not by itself establish a Partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived. A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received for any of the following reasons: (i have condenced to the one i think that pertains)
In payment for services as an independent contractor or of wages or other compensation to an employee.

We agreed we would set ourselves up on payroll as employees and pay ourselves as employees when there was enough money in the account to pay ourselves. So profits were paid in the form of payroll the same as our employees.

In this situation is he entitled to half of the companies assests?

[This message has been edited by JMPAR (edited August 05, 2000).]


Senior Member
The fact the agreement was agreed to, but not signed, may have created a partnership by its terms. Ask the lawyer who you originally asked to prepare the agreement as it is heavily fact dependent.

This is intended as general information only and NOT LEGAL ADVICE. You are not my client, and I have no obligation of any kind to you. To retain a lawyer, go to http://AttorneyPages.com

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