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Call Now: 904-383-7448In determining whether a partnership exists, the following rules shall apply:
(Code 1981, §14-8-7, enacted by Ga. L. 1984, p. 1439, § 1; Ga. L. 1994, p. 97, § 14.)
- For annual survey article discussing existence of partnerships, see 46 Mercer L. Rev. 71 (1994).
Note to Uniform Partnership Act This section provides specific rules for determining the existence of partnership. Paragraph (2) distinguishes partnership from various forms of co-ownership of property. Paragraph (4) provides that proof of profit-sharing alone presumptively establishes partnership unless the profits were received in connection with one of the relationships enumerated in subparagraphs (4)(A) through (F). Paragraph (3) clarifies that no such effect is attached to sharing of gross returns as distinguished from the profits of the business. Finally, paragraph (1) provides that the same rules for determination of partnership apply regardless of whether the question arises between purported partners or between purported partners and third parties, except in the partnership-by-estoppel situation governed by § 14-8-16.
Prior Georgia Law Paragraph (1) clearly reverses the implication of prior O.C.G.A. § 14-8-21 that a different test would be applied in cases involving third parties than that in cases among the partners. The Act accords with some case law under the prior Code. See Camp v. Montgomery, 75 Ga. 795 (1885); McCowen v. Aldred, 85 Ga. App. 373, 69 S.E.2d 660 (1952); Gnann v. Cameron, 29 Ga. App. 608, 116 S.E. 338 (1923). Paragraph (2), as well as § 14-8-6, clearly reverses the implication of prior O.C.G.A. § 14-8-20 that partnership can arise from joint ownership of property alone. The Act accords with Borum v. Deese, 196 Ga. 292, 26 S.E.2d 538 (1943). Paragraph (4) reverses the implication of prior O.C.G.A. § 14-8-21 that partnership could not arise out of profit-sharing alone, at least in third-party cases. The Act accords with Callaway v. Waxelbaum Co., 128 Ga. 508, 57 S.E. 763 (1907); and Powell v. Moore, Marsh & Co., 79 Ga. 524, 4 S.E. 383 (1887). Finally, there were no prior Code provisions comparable to the presumptions provided for in paragraph (4).
Official UPA Paragraph (4) differs from the official version in that subparagraph (B) has been expanded to include all compensation in connection with an employment relationship and not just "wages of an employee"; subparagraph (4)(D) refers to "surviving spouse" rather than "widow"; and the last phrase of the lead-in to the Georgia version of paragraph (4) was in the official version of subparagraph (4)(E). With respect to the last change, note that if the amount of profits affects the obligation to repay a debt and not merely the amount of each payment, this may furnish evidence of a partnership rather than a debtor-creditor relationship.
Cross-References See the cross-references to § 14-8-6.
- In light of the similarity of the statutory provisions, decisions under former Code 1910, §§ 2626, 3155, 3158, 3184, former Code 1933, §§ 75-101 and 75-102, and former Code Sections 14-8-20 and 14-8-21, in effect prior to the 1984 repeal and reenactment of this chapter, are included in the annotations to this Code section.
- Generally speaking, a partnership is a voluntary agreement between two or more persons to contribute their money, property, or skill to the operation of a joint business or common enterprise for their common benefit and to divide the profits and bear the losses in certain proportions. Hayes v. Irwin, 541 F. Supp. 397 (N.D. Ga. 1982), aff 'd, 729 F.2d 1466 (11th Cir.), cert. denied, 469 U.S. 857, 105 S. Ct. 185, 83 L. Ed. 2d 119 (1984) (decided under former Code 1933, §§ 75-101 and 75-102).
If two or more persons put into an enterprise property, money, or other things of value, other than mere personal services, upon an agreement that they shall each have an interest in the profits as such - that the earnings on the investment shall determine the extent of the profits, if any, to be received - it is a partnership. It is not necessary to specify as to the liability for the losses in such cases, for if the business venture proves unsuccessful or unprofitable, the loss occurs as the inevitable concomitant. Butler v. Frank, 7 Ga. App. 655, 67 S.E. 884 (1910) (decided under former Code 1910, § 2626).
- The parties to a partnership must put into the enterprise property, money, or other thing of value, other than mere personal services. Escoe v. Johnson, 110 Ga. App. 252, 138 S.E.2d 330 (1964) (decided under former Code 1933, § 75-102).
A partnership may be created for a single venture or enterprise. Corbin v. Collum, 173 Ga. 681, 160 S.E. 771 (1931) (decided under former Civil Code 1910, § 3158); Hayes v. Irwin, 541 F. Supp. 397 (N.D. Ga. 1982), aff 'd, 729 F.2d 1466 (11th Cir.), cert. denied, 469 U.S. 857, 105 S. Ct. 185, 83 L. Ed. 2d 119 (1984) (decided under former Code 1933, §§ 75-101 and 75-102).
- Though a firm or partnership is not a person, it is a legal entity, and for some purposes is recognized as a quasi-person, having powers and functions exercisable by one of the partners severally or all of them jointly. Borum v. Deese, 196 Ga. 292, 26 S.E.2d 538 (1943) (decided under former Code 1933, § 75-101).
- Although it has been held that common law joint-stock companies are regarded as partnerships, such companies are not entirely controlled by the legal rules and principles which govern ordinary partnerships. Hammond v. Otwell, 170 Ga. 832, 154 S.E. 357 (1930) (decided under former Civil Code 1910).
- Actual contract by which partnership is formed is not always essential to support liability of one person as partner of another; as to third persons, one may assume such liability by inducing them to extend credit upon faith of representations made by that person, either express or implied, to effect that the person was a partner and, as such, liable. Pope v. Triangle Chem. Co., 157 Ga. App. 386, 277 S.E.2d 758 (1981) (decided under former Code 1933, § 75-101).
Partnership or no partnership is generally a mixed question of law and fact, and cannot be resolved as a matter of law unless verdict one way or the other is demanded by the evidence. Pope v. Triangle Chem. Co., 157 Ga. App. 386, 277 S.E.2d 758 (1981) (decided under former Code 1933, §§ 75-101 and 75-102); Flatau v. Tribble's Shoes, Inc. (In re Lawrence), 82 Bankr. 157 (Bankr. M.D. Ga. 1988); Harris v. Escoe (In re Woolston), 147 Bankr. 279 (Bankr. M.D. Ga. 1992).
Whether a person has held oneself out as a partner is a question of fact. Pope v. Triangle Chem. Co., 157 Ga. App. 386, 277 S.E.2d 758 (1981) (decided under former Code 1933, §§ 75-101 and 75-102).
Whether third party relied upon acts of ostensible partner is a question of fact. Pope v. Triangle Chem. Co., 157 Ga. App. 386, 277 S.E.2d 758 (1981) (decided under former Code 1933, §§ 75-101 and 75-102).
- Under the general rule established in paragraph (1) of O.C.G.A. § 14-8-9, a partner's actions in furtherance of the business of the partnership bind the partnership, and arbitration agreements mentioned in paragraph (3)(E) of O.C.G.A. § 14-8-9 constitute a specific exception to this general rule only in the absence of authorization from the remaining partners, and nothing in O.C.G.A. Ch. 8, T. 14 mandates that such authorization must be express rather than implied. Eassa Properties v. Shearson Lehman Bros., 851 F.2d 1301 (11th Cir. 1988).
- Evidence compelled conclusion that partnership existed between plaintiff and defendant for the purpose of soliciting clients and transacting their investments. Hayes v. Irwin, 541 F. Supp. 397 (N.D. Ga. 1982), aff 'd, 729 F.2d 1466 (11th Cir.), cert. denied, 469 U.S. 857, 105 S. Ct. 185, 83 L. Ed. 2d 119 (1984) (decided under former Code 1933, §§ 75-101 and 75-102).
- Parties who agreed to make equal contributions, agreed to share the profits of the mobile home park, and met to discuss development and the business affairs of the mobile home park, were partners. Harris v. Escoe (In re Woolston), 147 Bankr. 279 (Bankr. M.D. Ga. 1992).
- See Falk v. LaGrange Cigar Co., 15 Ga. App. 564, 84 S.E. 93 (1915) (receipt of profits as compensation for services) (decided under former Civil Code 1910, § 3158); Allgood v. Feckoury, 36 Ga. App. 42, 135 S.E. 314 (1926) (receipt of profits as compensation for services) (decided under former Civil Code 1910, § 3158); Sauls v. Scott, 46 Ga. App. 243, 167 S.E. 311 (1933) (receipt of profits as compensation for services) (decided under former Civil Code 1910, § 3158); West Lumber Co. v. Chandler, 46 Ga. App. 408, 167 S.E. 766 (1933) (impoundment of profits as security for loan) (decided under former Civil Code 1910, § 3158); Smith v. City of Atlanta, 51 Ga. App. 17, 179 S.E. 558 (1935) (placement of slot machines in stores in return for part of gross amount taken in) (decided under former Code 1933, §§ 75-101 and 75-102); Beard v. Oliver, 52 Ga. App. 229, 182 S.E. 921 (1935) (interest in profits as compensation for services) (decided under former Code 1933, §§ 75-101 and 75-102); Hannifin v. Wolpert, 56 Ga. App. 466, 193 S.E. 81 (1937) (interest in profits as compensation for services) (decided under former Code 1933, §§ 75-101 and 75-102); Benton v. White, 185 Ga. 286, 194 S.E. 179 (1937) (agreement to do business in concert) (decided under former Code 1933, §§ 75-101 and 75-102); Borum v. Deese, 196 Ga. 292, 26 S.E.2d 538 (1943) (property-holding arrangement) (decided under former Code 1933, §§ 75-101 and 75-102); Evans Motors of Ga., Inc. v. Hamilton, 82 Ga. App. 735, 62 S.E.2d 390 (1950) (interest in profits but no liability) (decided under former Code 1933, §§ 75-101 and 75-102); Threads, Inc. v. Williams, 84 Ga. App. 804, 67 S.E.2d 591 (1951) (receipt of profits as compensation for services) (decided under former Code 1933, §§ 75-101 and 75-102); Escoe v. Johnson, 110 Ga. App. 252, 138 S.E.2d 330 (1964) (payment of debts despite nonliability) (decided under former Code 1933, §§ 75-101 and 75-102); Andrews v. Messina, 206 Ga. App. 742, 426 S.E.2d 641 (1992) (deposit and withdrawal of partnership funds); Lane v. Spragg, 224 Ga. App. 606, 481 S.E.2d 592 (1997) ;(interest as father and co-signor of loans to purchase business).
There was evidence that spouses had no partnership as to a leasing business in case in which the husband testified that there was no partnership and that he never intended to form a commercial partnership with the wife, there were no documents indicating that there was a partnership, proceeds from the business were transferred to the parties' joint checking account without any portion going to either spouse individually, and neither the parties' accountant nor their banker heard of a partnership. Rosenfeld v. Rosenfeld, 286 Ga. App. 61, 648 S.E.2d 399 (2007), cert. denied, 2007 Ga. LEXIS 613 (Ga. 2007).
In a separate suit arising out of a divorce action in which a wife sued the husband for breach of fiduciary duty and other claims based on an alleged commercial partnership involving a leasing business between the couple, the trial court did not abuse its discretion in denying the wife's motion for a new trial because some evidence showed that no partnership existed between the parties; the evidence included: the husband unequivocally testifying that there was no partnership and that the husband never intended to form a commercial partnership with the wife; and no documents reflected that a partnership existed as there was no written partnership agreement, no correspondence referencing a partnership, no partnership tax returns, no checking account in the name of a partnership, no tax identification number issued to a partnership, and no documents showing that any real or personal property was owned by a partnership entity. Rosenfeld v. Rosenfeld, 286 Ga. App. 61, 648 S.E.2d 399 (2007), cert. denied, 2007 Ga. LEXIS 613 (Ga. 2007).
Cited in Historic Macon Station Ltd. Partnership v. Piedmont-Forrest Corp., 152 Bankr. 358 (Bankr. M.D. Ga. 1993); Peacock v. Chegwidden, 238 Ga. App. 328, 518 S.E.2d 760 (1999).
- As between themselves, "the intent of the parties is the true test of a partnership, which may be created by a contract giving rights or imposing liabilities differing from those from which the law ordinarily infers a partnership." Allgood v. Feckoury, 36 Ga. App. 42, 135 S.E. 314 (1926) (decided under former Code 1910, §§ 3155 and 3158).
- A partnership may be proved by evidence that each of the alleged partners admitted its existence and the partner's membership. Clarke v. Woodward, 76 Ga. App. 181, 45 S.E.2d 473 (1947) (decided under former Code 1933, §§ 75-101 and 75-102).
- The existence of a partnership cannot, as against one denying it, be lawfully shown by declarations of another alleged member of the firm. Zerounis v. Berry, 199 Ga. 410, 34 S.E.2d 275 (1945) (decided under former Code 1933).
Neither partnership nor agency relationship is created by franchise contract under which one operates type of business on royalty basis. Whitco Produce Co. v. Bonanza Int'l, Inc., 154 Ga. App. 92, 267 S.E.2d 627 (1980) (decided under former law).
- Third party, transacting business under a trade name, introduced defendant as a partner to the plaintiff, and represented that defendant was backing the third party in said business; because defendant made no denial of these affirmations believed this and sustained a loss by endorsing a check for such third party, verdict holding defendant liable was supported by the evidence. Clarke v. Woodward, 76 Ga. App. 181, 45 S.E.2d 473 (1947) (decided under former Code 1933, §§ 75-101 and 75-102).
Mere tenancy in common does not create partnership, and partnership will not be implied from joint ownership or joint purchase of land, even when accompanied by agreement to share profits and losses of selling it; yet tenants in common may become partners, like other persons, if they agree to assume that relation towards each other. Borum v. Deese, 196 Ga. 292, 26 S.E.2d 538 (1943) (decided under former Code 1933, § 75-101).
- The terms of contract granting a party the right to profits is not evidence, however, that a partnership, as opposed to a debtor/creditor relationship, existed between the parties. Barton v. Marubeni Am. Corp., 204 Ga. App. 346, 419 S.E.2d 342 (1992).
- O.C.G.A. § 14-8-7 deals with partnership formation in the absence of an express agreement and is inapplicable when a statement of partnership is publicly filed. Accolades Apts., L.P. v. Fulton County, 279 Ga. 257, 612 S.E.2d 284 (2005).
A written contract of partnership need not be attached to the petition. Bone v. Faircloth, 52 Ga. App. 23, 182 S.E. 400 (1935) (decided under former Code 1933, § 75-101).
The petition need not set out the actual terms and conditions of the parties in the business. Bone v. Faircloth, 52 Ga. App. 23, 182 S.E. 400 (1935) (decided under former Code 1933, § 75-101).
Contract of partnership is not required to be in writing, even though land and timber thereon is to become part of its assets to be used in operation of sawmill business. Bone v. Faircloth, 52 Ga. App. 23, 182 S.E. 400 (1935) (decided under former Code 1933, § 75-101).
An agreement to form a partnership need not be in writing, for the true determinant of a partnership is the objective intent of the parties involved. Hayes v. Irwin, 541 F. Supp. 397 (N.D. Ga. 1982), aff 'd, 729 F.2d 1466 (11th Cir.), cert. denied, 469 U.S. 857, 105 S. Ct. 185, 83 L. Ed. 2d 119 (1984) (decided under former Code 1933, §§ 75-101 and 75-102).
- Contract between the parties was held to constitute a partnership. Smith v. Hancock, 163 Ga. 222, 136 S.E. 52 (1926). (decided under former Civil Code 1910, § 3158). See also Barrow v. Georgia Chem. Works, 34 Ga. App. 31, 128 S.E. 14 (1925) (decided under former Civil Code 1910, § 3158); Nellis & Co. v. Green & Stallworth, 36 Ga. App. 684, 137 S.E. 843 (1927) (decided under former Civil Code 1910, § 3184).
Trial court was authorized to give a charge on partnership since there was evidence that a parol contract of partnership had been executed by the parties to the lawsuit with regard to the completion of the construction. Combined Contractors v. Welch, 160 Ga. App. 790, 288 S.E.2d 229 (1982) (decided under former Code 1933, §§ 75-101 and 75-102).
- 59A Am. Jur. 2d, Partnership, § 131 et seq.
- 68 C.J.S., Partnership, §§ 1, 31 et seq.
- Noncompliance with statute requiring filing of certificate of partnership as affecting right to maintain action arising out of tort, 2 A.L.R. 119.
Law of infant's contract as applied to contract of or by partnership, 58 A.L.R. 1366.
Liability of former partners as such in respect of transactions subsequent to incorporation of their business, 89 A.L.R. 986.
Lease or tenancy agreement as creating partnership relationship between lessor and lessee, 131 A.L.R. 508.
What amounts to joint adventure, 138 A.L.R. 986.
What creates partnership relation between cotenants of property, 150 A.L.R. 1003.
Validity of partnership agreement between husband and wife, 157 A.L.R. 652.
Lessee interest of individual as becoming partnership asset of firm subsequently formed, 37 A.L.R.2d 1076.
Mining grubstake contracts, 70 A.L.R.2d 904.
Construction of agreement between real-estate agents to share commissions, 71 A.L.R.3d 586.
Total Results: 4
Court: Supreme Court of Georgia | Date Filed: 2017-08-28
Citation: 301 Ga. 852, 804 S.E.2d 377, 2017 Ga. LEXIS 712
Snippet: corroboration to sustain a conviction. OCGA § 24-14-8.7 The totality of the circum*857stances in this case
Court: Supreme Court of Georgia | Date Filed: 2014-06-16
Citation: 295 Ga. 343, 760 S.E.2d 170, 2014 Fulton County D. Rep. 1547, 2014 WL 2702697, 2014 Ga. LEXIS 500
Snippet: accomplice testimony is now codifiedat OCGA § 24-14-8. 7 It should also he noted that the State
Court: Supreme Court of Georgia | Date Filed: 2005-04-26
Citation: 612 S.E.2d 284, 279 Ga. 257, 2005 Fulton County D. Rep. 1377, 2005 Ga. LEXIS 291
Snippet: For these reasons, appellees' reliance on OCGA § 14-8-7, which deals with partnership formation in the
Court: Supreme Court of Georgia | Date Filed: 2001-07-02
Citation: 549 S.E.2d 348, 274 Ga. 28, 2001 Fulton County D. Rep. 2056, 2001 Ga. LEXIS 538
Snippet: in actuality a partnership, see OCGA §§ 14-8-6 & 14-8-7, real property acquired in the name of the "joint