                                 CODE OF VIRGINIA

FORMATION OF PARTNERSHIP (§ 50-73.88)

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&#8217;s liability under &#xA7; 50-73.96.

HISTORY: 1996, c. 292; 2015, c. 616.