Fact Pattern 37-1
Ann starts up Bowls Bistro to serve and sell soups and salads. Ann leases space in an office building owned by Carly. The lease requires a base rent of $1,250, plus 10 percent of Bowls Bistro's profits, each month. The term is two years. Ann hires Demi to take and fill customers' orders at an hourly wage of $15.00, plus tips.
-Refer to Fact Pattern 37-1. Ann and Carly are
A) not partners, because Carly does not have an ownership interest or management rights in Bowls 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

Fact Pattern 37-1
Ann starts up Bowls Bistro to serve and sell soups and salads. Ann leases space in an office building owned by Carly. The lease requires a base rent of $1,250, plus 10 percent of Bowls Bistro's profits, each month. The term is two years. Ann hires Demi to take and fill customers' orders at an hourly wage of $15.00, plus tips.
-Refer to Fact Pattern 37-1. Ann and Carly are
A) ​not partners, because Carly does not have an ownership interest or management rights in Bowls 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.

Quizplus · Accepted Answer

Ann and Carly are not partners because Carly does not have an ownership interest or management rights in Bowls Bistro. The lease agreement only entitles Carly to receive a percentage of the profits as rent, and does not create a partnership between the two parties.

Fact Pattern 37-1 Ann Starts Up Bowls Bistro to Serve and Sell Soups