A brother demanded that his brother register him as a shareholder in companies he owned, contending that the two had a partnership relationship. This, despite the lack of a registered partnership and despite the fact that apart from an internal document signed between the two, the brother did not sign any official document related to the partnership with third parties, the partnership was never presented to official factors, he did not invest money in the companies he contended were ventures of the partnership, or bore any financial risk in relation to them.
The Court held that no partnership relationship was formed between the brothers. In order to create partnership relations three conditions are to be met: A relationship between people; Conducting a joint business; Yielding revenues as a goal for the joint management of the business. A partnership being registered is not a prerequisite for its existence. However, in the absence of such a registration, one must examine the parties’ intention by reviewing their right to conduct the business and to obligate each other, their participation in business revenues, the way they have been represented to the public, etc. Here, no partnership was ever registered. In addition, all circumstances indicate that therer is no partnership relations between parties: The companies which the brother contended that were the result of the partnership were incorporated before the internal document was signed between the parties and no external expression except for that partial document was ever given to the alleged partnership. Therefore, partnership relations between the brothers have never existed.