Section 10-8-20

(Repealed effective January 1, 2001) Determination of whether partnership exists.

In determining whether a partnership exists, these rules shall apply:

(1) Except as provided by Section 10-8-55, 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 widow or representative of a deceased partner;

d. As interest or other payment on a loan, though the amount of payment varies with the profits of the business; or

e. As the consideration for the sale of the goodwill of a business or other property by installments or otherwise.

(5) An express agreement among the partners, or between business associates, that a person, who would otherwise be deemed a partner under this chapter, will not be personally liable for partnership obligations is not, in itself, evidence that such person is not a partner; provided, that such agreement shall not be effective as against third parties unless such person is a limited partner under the laws of Alabama governing limited partnerships.

(Acts 1971, No. 1513, p. 2609, §7.)