Question

Has a partnership been created between the parties in the following circumstances:

(i)      As a result of previous dealings Juanita owes Kate $10,000 for stock used in her business. Kate stipulates that further stock will be supplied only on the basis that Juanita allocates 20% of the profits from her business to pay off the debt. Juanita agrees.

(ii)      A husband and wife rent out their jointly owned home to cover the costs and expenses relating to the house whilst they are away on a six months overseas holiday.

Answer 1

1) There is not a partnership been created at the time of this transaction

the profit is shared  only for the purpose paying the money that Juanita owed to Kate and there is also no partnership deed between the two parties. The profit sharing ends after the debt is completely paid off.

2) There is no partnership been created at the occasion when husband and wife give their jointly owed house for rent to cover the costs and expenses related to the house. There is no partnership deed between them and also their is no particular ratio in which the rent will be allocated to husband and wife. The house is given for rent while they mare away from home for only 6 months

so all these factors confirm that there is no partnership formed between them.