John and Peter purchased a joint interest in a five-acre campground with a variety store and mini-golf course and retained the existing manager to handle day-to-day operations.From time to time they made improvements to the site and each year they divided the profits (or losses)from the campground equally between the two of them.
-If Peter takes over operational management and John assumes the administrative tasks associated with the campground,a partnership exists in respect of the business.

Question

Quizplus · Accepted Answer

A partnership is formed when two or more individuals come together to carry on a business for profit, with the intention of sharing the profits and losses between them. In this case, John and Peter have joint ownership and share the profits and losses equally. By taking on different roles within the business, they are still operating as partners.

John and Peter Purchased a Joint Interest in a Five-Acre