1912_PARTNERSHIPS_ORDINANCE__1897 — Page 2

PARTNERSHIP.

No. 1 of 1897.

831

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2. In determining whether a partnership does or does not exist, Rules for regard shall be had to the following rules -

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(1) joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof;

(2) the sharing of gross returns does not of itself create a partner- ship, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived;

(3) the receipt by a person of a share of the profits of a business is primâ facie evidence that he is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make him a partner in the business; and in particular

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(a) the receipt by a person of a debt or other liquidated amount, by instalments or otherwise, out of the accruing profits of a busi- ness does not of itself make him a partner in the business or liable as such;

(b) a contract for the remuneration of a servant or agent of a per- son engaged in a business by a share of the profits of the business does not of itself make the servant or agent a partner in the business or liable as such;

(c) a person being the widow or child of a deceased partner, and receiving by way of annuity a portion of the profits made in the business in which the deceased person was a partner, is not, by reason only of such receipt, a partner in the business or liable as such;

(d) the advance of money by way of loan to a person engaged or about to engage in any business on a contract with that person that the lender shall receive a rate of interest varying with the profits, or shall receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person or persons carrying on the business or liable as such : Provided that the contract is in writing and signed by or on behalf of all the parties thereto; and

(e) a person receiving, by way of annuity or otherwise, a portion of the profits of a business in consideration of the sale by him of

* As amended by No. 8 of 1912.

determining existence of partnership.

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