Arizona § 29-1012 - Formation of partnership

§ 29-1012. Formation of partnership

A. Except as otherwise provided in subsections B and C, the association of two 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, except that the ownership establishes a partnership if the persons have declared in a written partnership agreement that the property is partnership property subject to the provisions of the partnership agreement and this chapter.

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 in payment either:

(a) Of a debt by installments or otherwise.

(b) For services as an independent contractor or of wages or other compensation to an employee.

(c) Of rent.

(d) Of an annuity or any other retirement benefit to a beneficiary, representative or designee of a deceased or retired partner.

(e) 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) For the sale of the goodwill of any business or other property by installments or otherwise.