Anita is hired to manage an unincorporated dress boutique owned by Betty. The two agree that Anita will receive one-third of the net profits, which amount is to be paid to her on a monthly basis. a. Is Anita a partner? Explain. b. If the boutique has a loss instead of a profit, would Anita have to share the loss? Explain
a.
There are three components essential to the existence of a partnership: an association of two or more persons, conducting a business for profit, which they co-own. Anita is not a partner since she does not have joint ownership of the business. The fact that she shares profits creates a presumption of being a partner, but the right to manage and control the business is also a factor in co-ownership Under RUPA, the existence of a partnership shall not be presumed where profits are received in payment of compensation to an employee.
?
b. Since Anita is not a partner, she is not held to share losses in the business.
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