NYS Laws / Partnerships - Existence of a Partnership & Partnership Property

New York State Laws / Partnerships:


PTR Partnership / Article 2 - Nature of a Partnership

Existence of a Partnership:

 §  11.  Rules  for  determining  the  existence of a partnership.   In
  determining whether a partnership exists, these rules shall apply:
    1. Except as provided by section  twenty-seven  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 he is a partner in the business, but  no  such
  inference shall be drawn if such profits were received in payment:
    (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  surviving  spouse  or representative of a
  deceased partner,
    (d) As interest on a loan, though the amount of payment vary with  the
  profits of the business,
    (e)  As  the consideration for the sale of the good-will of a business
  or other property by installments or otherwise.

Partnership Property:

§  12.  Partnership property.  1. All property originally brought into
  the  partnership  stock  or  subsequently  acquired,  by   purchase   or
  otherwise, on account of the partnership is partnership property.
    2.  Unless  the  contrary  intention  appears,  property acquired with
  partnership funds is partnership property.
    3. Any estate in real property may  be  acquired  in  the  partnership
  name. Title so acquired can be conveyed only in the partnership name.
    4.  A  conveyance  to  a  partnership  in the partnership name, though
  without words of inheritance, passes the entire estate  of  the  grantor
  unless a contrary intent appears.



Note:  Citation as of Read Date 1/20/12 - ALL NYS Laws must be confirmed for current validity as relying or implementing and are best covered with the support of an Attorney. That Stated the Accounting Basis of Partnerships is rooted in Tax and other Laws so it is helpful to understand the Legal Basis Definition of a Partnership as generally defined starting point for Partnership Accounting.



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