A PARTNERSHIP CANNOT OPERATE THROUGH AN EXISTING CORPORATE STRUCTURE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, noted that a partnership cannot operate through an existing corporate structure:

Plaintiffs operated a court reporting partnership from 1975 to 1999. Upon dissolution of the partnership, they agreed to consolidate their business with defendant, an existing court reporting corporation … . * * *

… [A] party “cannot recover on a claim that he [or she] and [another individual] entered into a joint venture to be set up and run through the corporate . . . structure” … . “[A]s a general rule, a partnership may not exist where the business is conducted in a corporate form, as each is governed by a separate body of law . . . Parties may not be partners between themselves while using the corporate shield to protect themselves against personal liability” … . Although that rule has been qualified “so as not to preclude members of a preexisting joint venture from acting as partners between themselves and as a corporation to the rest of the world,’ ” that qualification is inapplicable here because defendant [corporation]  was formed before the partnership was allegedly created by an oral agreement … . In other words, “there was no preexisting joint venture that later spawned the creation of a corporation in which aspects of the joint venture could survive” … . Bianchi v Midtown Reporting Serv., Inc., 2018 NY Slip Op 04895, Fourth Dept 6-28-18

​PARTNERSHIP LAW (A PARTNERSHIP CANNOT OPERATE THROUGH AN EXISTING CORPORATE STRUCTURE (FOURTH DEPT))/CORPORATION LAW (A PARTNERSHIP CANNOT OPERATE THROUGH AN EXISTING CORPORATE STRUCTURE (FOURTH DEPT))/JOINT VENTURES (A PARTNERSHIP CANNOT OPERATE THROUGH AN EXISTING CORPORATE STRUCTURE (FOURTH DEPT))