The third party, with consent of the general partner, could then become a limited partner.
The partnership agreement also governed the disbursements to be made by Jade. In general, the limited partners were to receive no salary or draw; the general partner was to be reimbursed for expenses incurred on behalf of the partnership along with a "commencement fee" of $68,000.00. The commencement fee was to compensate Finkel for services rendered in connection with the production and sale of the first seventy tons of coal. The payment was to be made within the first thirty days of charter and was not conditioned upon the actual production and sale of coal. Thereafter, the general partner was entitled to "management fees" amounting to ten cents per ton of coal mined fromthe court disagrees with the defendants' conclusion that this case presents the same investment situation as Forman and Sunshine Kitchens.
In Forman, the plaintiffs purchased shares of common stock in a cooperative housing corporation. In holding that the shares were "securities", the Court of Appeals stated that the deductibility, for tax purposes, of the portions of the tenant investor's monthly rental charge which was applied to interest on the mortgage, was "profit" to the investors. The Supreme Court, in reversing the Court of Appeals, held that the shares were not securities within the meaning of the Securities Acts; the tax benefits received by the co-op investors were not within the scope of "profit" as contemplated by the securities laws. The Court held that the plaintiffs invested in a place