Indiana § 23-4-1-7 - Rules for determining existence of partnership

§ 23-4-1-7. Rules for determining existence of partnership

Sec. 7. In determining whether a partnership exists, these rules shall apply:

(1) Except as provided by section 16 of this chapter, persons who are not partners as to each other are not partners as to third persons.

(2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property.

(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.

(4) The receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, but no such inference shall be drawn if such profits were received in payment for the following:

(a) As a debt by installments or otherwise.

(b) As wages of an employee or rent to a landlord.

(c) As an annuity to a widow or representative of a deceased partner.

(d) As interest on a loan though the amount of payment varies with the profits of the business.

(e) As the consideration for the sale of a goodwill of a business or other property by installments or otherwise.

(5) The existence of a partnership is not affected by the following:

(a) The filing or failure or omission to file an original or renewal registration as a limited liability partnership under section 45 of this chapter.

(b) The expiration of a partnership's status as a limited liability partnership.

(c) The filing of a notice of withdrawal under section 45 of this chapter.

Formerly: Acts 1949, c.114, s.7. As amended by P.L.34-1987, SEC.292; P.L.230-1995, SEC.3; P.L.34-1997, SEC.7.