Code Section

Corporations Code - CORP

TITLE 2. PARTNERSHIPS [15800 - 16962]

  ( Title 2 added by Stats. 1949, Ch. 383. )

CHAPTER 5. Uniform Partnership Act of 1994 [16100 - 16962]

  ( Chapter 5 added by Stats. 1996, Ch. 1003, Sec. 2. )

ARTICLE 2. Nature of Partnership [16201 - 16204]
  ( Article 2 added by Stats. 1996, Ch. 1003, Sec. 2. )


(a) Except as otherwise provided in subdivision (b), the association of two or more persons to carry on as coowners 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 coowners 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.

(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 for any of the following reasons:

(A) In payment of a debt by installments or otherwise.

(B) In payment for services as an independent contractor or of wages or other compensation to an employee.

(C) In payment of rent.

(D) In payment of an annuity or other retirement benefit to a beneficiary, representative, or designee of a deceased or retired partner.

(E) In payment 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.

(F) In payment for the sale of the goodwill of a business or other property by installments or otherwise.

(Added by Stats. 1996, Ch. 1003, Sec. 2. Effective January 1, 1997.)