7-12.1-202. Formation of partnership.
(a) Except as otherwise provided in subsection (b) of this section, the association of
two (2) or more persons to carry on as co-owners a business for profit forms a partnership,
whether or not the persons intend to form a partnership.
(b) An association formed under a statute other than this chapter, a predecessor statute,
or a comparable statute of another jurisdiction is not a partnership under this chapter.
(c) In determining whether a partnership is formed, the following rules apply:
(1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common
property, or part ownership does not by itself establish a partnership, even if the
co-owners share profits made by the use of the property;
(2) The sharing of gross returns does not by itself establish a partnership, even if the
persons sharing them have a joint or common right or interest in property from which
the returns are derived; and
(3) A person who receives a share of the profits of a business is presumed to be a partner
in the business, unless the profits were received in payment:
(i) Of a debt by installments or otherwise;
(ii) For services as an independent contractor or of wages or other compensation to an
employee;
(iii) Of rent;
(iv) Of an annuity or other retirement or health benefit to a deceased or retired partner
or a beneficiary, representative, or designee of a deceased or retired partner;
(v) Of interest or other charge on a loan, even if the amount of payment varies with the
profits of the business, including a direct or indirect present or future ownership
of the collateral, or rights to income, proceeds, or increase in value derived from
the collateral; or
(vi) For the sale of the goodwill of a business or other property by installments or otherwise.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective
January 1, 2023.
