Jane and Joan decide to open a plumbing business.Both contribute money to the business,but because Jane has expertise in plumbing,Joan allows Jane to make all the management decisions.Joan will not participate in much of the day-to-day operations,but could do so if she wanted to.Jane and Joan will split net income equally.Jane and Joan make no filings associated with this business.This enterprise is:

Question

Quizplus · Accepted Answer

This enterprise is a general partnership because both Jane and Joan have contributed money to the business, they have an agreement to split net income equally, and they are carrying on a trade or business. The fact that Jane has expertise in plumbing and makes all management decisions does not change the nature of the partnership.

Jane and Joan Decide to Open a Plumbing Business