What laws govern the formation of partnerships?
In California, partnerships are governed by the Uniform Partnership Act (UPA) of 1994 and the Revised Uniform Partnership Act (RUPA) of 2008. The UPA provides the basic framework for the establishment of partnerships in the state, while RUPA contains more specific rules and regulations relating to specific types of partnerships and their governance. The UPA outlines four fundamental elements that must be present when forming a partnership: (1) a written or oral agreement between two or more individuals or organizations; (2) an intention to pool resources, labor, and capital to make a profit; (3) an agreement to share profits, losses, and control of the business; and (4) a mutual obligation to pay creditors, file taxes, and otherwise comply with state and federal laws. RUPA builds on the UPA by providing more guidance on issues related to formation, governance, and dissolution of partnerships. This includes provisions relating to the rights of partners, liability for partnership debts, and the division of profits and losses. It also outlines the procedures for dissolution of a partnership, such as how to divide the assets, how to handle debts, and how to make a final distribution of income to the partners. In conclusion, partnerships are governed by the UPA and RUPA of California. These laws provide the framework for the formation and governance of a partnership in the state, as well as the procedures for dissolution.
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