Abby starts up Bowls Bistro to serve and sell soups for workday lunches. Abby leases space in an office building owned by Carmen. The lease requires Abby to pay Carmen a base rental of $1,250,plus 10 percent of Bowls Bistro's profits,each month. The term is two years. Abby hires Devin to take and fill customers' orders at an hourly wage of $15.00,plus tips.
-Abby and Carmen are
A)not partners,because Carmen does not have an ownership interest or management rights in Bowls Bistro.
B)not partners,because the lease includes a "base rental."
C)not partners,because the rent includes only 10 percent of the profits.
D)partners in a partnership for two years.

Question

Quizplus · Accepted Answer

Abby and Carmen are landlord and tenant, respectively. The lease agreement indicates that Carmen does not have an ownership interest or management rights in Bowls Bistro, but is only entitled to a base rental fee and a percentage of the profits. Therefore, they are not partners in a partnership.

Abby Starts Up Bowls Bistro to Serve and Sell Soups