Which statement best describes how a partnership comes into existence? The partners must sign a written partnership agreement. The partners must register the partnership. Two or more people carry on business together with a view to profit. Two or more people purchase property together.

1. Which statement best describes how a partnership comes into existence?
2. The partners must register the partnership.

Partnerships are governed by state laws and every new partnership must be registered. The other partners also have to register separately after the partnership has been registered. It is not a must for the partners to sign a written agreement.

1. Ray and Mohammed are forming a general partnership but have not yet discussed how profits

will be shared between them. Which statement best describes their legal situation?

1. They are automatically entitled to a share proportional their relative contributions to the

capital of the partnership.

Partnership contracts details various things such as how profits and losses are to be divided. If no contract is written, the sharing of profits is dependent upon individual contributions towards the general partnership.