Amber owns and operates Bistro Café in space leased in a building owned by Ciera. The lease requires a base rent of $1,500, plus 10 percent of Bistro's profits, each month. The term is two years. Amber and Ciera are
A)not partners, because Ciera does not have an ownership interest or management rights in Bistro.
B)not partners, because the lease includes "base rent."
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

A partnership typically involves an agreement where parties share in the profits and losses of a business and have an ownership interest or management rights. In this scenario, Ciera, as the landlord, does not have an ownership interest or management rights in Bistro Café; she merely receives a form of rent that is partially variable, based on the café's profits. This arrangement does not constitute a partnership.

Amber Owns and Operates Bistro Café in Space Leased in a Building