Robert Flannigan (Saskatchewan) has an interesting article, The Joint Venture Fable, 50 Am. J. Legal Hist. 200 (2010)(SSRN). The article is a survey of, and a commentary on, the development of the concept that “joint ventures” are distinct from partnerships:
It recurrently is assumed that a joint venture is a distinct legal form. That is not a valid assumption. The joint venture claim materialised only aberrantly in the nineteenth century. A remedial distinction within partnership law led to, or was the springboard for, the assertion that the “joint venture” had a legal identity different from every other form of commercial association. That claim was confronted and rejected by most judges and commentators. Others were opposed to equating the joint venture with the partnership, or were hesitant to do so, insisting (or worrying) that there were basic differences. That thin wedge of dissent and hesitation allowed the claim to persist. It did not, however, prosper. Additional arguments offered in justification were easily repelled. Today there remains a stale deadlock between the majority and minority views. The minority claim now appears to be that the joint venture has a legal character that, while largely defined by the law of partnership, differs in certain substantive respects and therefore exists as a distinct form of association. The claim, however, remains fabulous. It is a fabrication or concoction that rightlyhas failed to secure the imprimatur of uniform judicial approbation. There is no historical basis for a distinct law of joint venture.
Id. at 200.
Posted by Gary Rosin
“Check the Box” as Diagnostic
Tuesday, September 22nd, 2009Heather M. Field (UC-Hastings) argues in Checking in on “Check-the-Box,” 42 Loy. L.A. L. Rev. 451 (2009) that
It’s not just the “multi-regime system.” Partnership taxation is built on an extreme aggregate view of partnerships that was not true in 1954 (or before) and still isn’t true. Even under the UPA’s tenancy-in-partnership, partners have no meaning individual rights in, or access to, partnership property. Partnership property is dedicated to partnership purposes; all an individual partner has is the right to distributions (if, as and when approved by the partners). RUPA-based partnership statutes now vest title to partnership property in the entity, and not the partners.
It’s hard to ensure economic substance in partnership allocations when the partnership tax regime itself has no economic substance. Well, apart from the tax regime itself.
Now, if I were the Tax Czar, I’d like to see
That level would the field, both as between entities, and as between debt and equity.
Hat-tip to Paul Caron (Tax Prof blog).
Gary Rosin
Tags: Check-the Box
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