Australian Capital Territory Consolidated Acts

PARTNERSHIP ACT 1963 - SECT 7

    (1)     In determining whether a partnership does or does not exist, regard shall be had to subsections (2) to (4).

    (2)     Joint tenancy, tenancy in common, joint 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 of the thing so held or owned.

    (3)     The sharing of gross returns does not, of itself, create a partnership, whether the persons sharing the 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.

    (4)     The receipt by a person of a share of the profits of a business is evidence that the person is a partner with respect to 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 the person a partner with respect to the business and, in particular—

        (a)     the receipt by a person of a debt or other liquidated demand by instalments or otherwise out of the accruing profits of a business does not, of itself, make the person a partner with respect to the business or liable as a partner with respect to the business; and

        (b)     a contract for the remuneration of an employee or agent of a person engaged in a business by a share of the profits of the business does not, of itself, make the employee or agent a partner in relation to the business or liable as a partner in relation to the business; and

        (c)     a domestic partner or child of a deceased partner who receives, by way of periodical payment, a part of the profits made in a business is not, only because the domestic partner or child receives part of the profits, a partner in relation to the business or liable as a partner in relation to the business; and

        (d)     the lending of money to a person engaged or about to engage in a business under a contract, made in writing with that person and signed by or on behalf of all the parties to the contract, by virtue of which the lender is entitled to receive a rate of interest varying with, or a share of, the profits arising from carrying on the business, does not, of itself, make the lender a partner with the person carrying on the business or liable as a partner with that person; and

        (e)     a person who receives by way of periodical payment a portion of the profits of a business in consideration of the sale by the person of the goodwill of the business is not, by reason only of the receipt of that portion, a partner with respect to the business or liable as a partner with respect to the business.

    (5)     This section does not apply in relation to an incorporated limited partnership.