§ 50-73.88 Formation of partnership
A. Except as otherwise provided in subsection B, 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.
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: 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 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; or f. For the sale of the goodwill of a business or other property by installments or otherwise.
D. Each person to be admitted as a partner to a partnership formed under subsection A may be admitted as a partner and may receive a partnership interest in the partnership without making a contribution or being obligated to make a contribution to the partnership. Each person to be admitted as a partner to a partnership formed under subsection A may be admitted as a partner without acquiring a transferable interest in the partnership. Nothing contained in this subsection shall affect a partner’s liability under § 50-73.96.
History
This law was first created in 1996. The record of its establishment is cataloged in chapter 292 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 1 time. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. That modification is as follows: in 2015, chapter 616.
1996, c. 292; 2015, c. 616.