LAW 122 Lecture Notes - Lecture 4: General Partnership, Income Tax, Jaguar
Document Summary
Review: partnership characteristics- there is no separation between a partner an partnership. Creditworthy partners make a creditworthy partnership income to partnership is personal income to partners. Partner"s income tax liability the income (loss) of the partnership is calculated by adding up all revenues and deducting expenses. A share of the income (loss) is allocated to each partner according to the entitlement to share in profits of the business. The share in profits of the business is considered personal income, Legal principle: (cid:498)each partner is an agent of the partnership when acting in the normal course of business(cid:499) (ss. Extends risk of unauthorized obligations and torts. Legal rule: each partner is an agent of the partnership - an exception. And, (cid:498)the other party either knew that the partner lacked authority(cid:499) or (cid:498)did not know that they were dealing with a partner(cid:499) Partners must never put their person interests ahead ahead of the partnership. No competition with the interests of the partnership.
