Question

Zara owns a piece of land that she agrees to rent to Susan. Susan plans to grow fruits and vegetables on the land to serve at Susan's, the restaurant she owns with her brothers, of which she is the general partner. Zara and Susan agree that Susan will pay Zara 5% of her net profits from the restaurant in exchange for using her land. Susan defaults on a loan to one of her restaurant's meat suppliers, and the supplier wants to recover from both Susan and Zara as partners. Can the meat supplier recover from both Susan and Zara

Answer 1

The correct option is A. No, because Susan and Zara have not formed a partnership.

Step-by-step explanation:

A partnership is an agreement between two or more people to manage a business and share earnings and liabilities. This implies that at least two people must plan to run a business for profit as co-owners in order to form a partnership.

It is also possible that if the partners do not plan to form a partnership, one can be formed. But some business activities, such as paying rent to another, may not constitute a partnership in and of themselves.

In the question, Susan and Zara have not formed a partnership because their main relationship appears to be that Susan rents land from Zara.

Therefore, the correct option is A. No, because Susan and Zara have not formed a partnership.