Tex.
Bus. Orgs. Code Section 152.052
Rules for Determining if Partnership Is Created
(a)
Factors indicating that persons have created a partnership include the persons’:(1)
receipt or right to receive a share of profits of the business;(2)
expression of an intent to be partners in the business;(3)
participation or right to participate in control of the business;(4)
agreement to share or sharing:(A)
losses of the business; or(B)
liability for claims by third parties against the business; and(5)
agreement to contribute or contributing money or property to the business.(b)
One of the following circumstances, by itself, does not indicate that a person is a partner in the business:(1)
the receipt or right to receive a share of profits as payment:(A)
of a debt, including repayment by installments;(B)
of wages or other compensation to an employee or independent contractor;(C)
of rent;(D)
to a former partner, surviving spouse or representative of a deceased or disabled partner, or transferee of a partnership interest;(E)
of interest or other charge on a loan, regardless of whether the amount varies with the profits of the business, including a direct or indirect present or future ownership interest in collateral or rights to income, proceeds, or increase in value derived from collateral; or(F)
of consideration for the sale of a business or other property, including payment by installments;(2)
co-ownership of property, regardless of whether the co-ownership:(A)
is a joint tenancy, tenancy in common, tenancy by the entirety, joint property, community property, or part ownership; or(B)
is combined with sharing of profits from the property;(3)
the right to share or sharing gross returns or revenues, regardless of whether the persons sharing the gross returns or revenues have a common or joint interest in the property from which the returns or revenues are derived; or(4)
ownership of mineral property under a joint operating agreement.(c)
An agreement by the owners of a business to share losses is not necessary to create a partnership.
Source:
Section 152.052 — Rules for Determining if Partnership Is Created, https://statutes.capitol.texas.gov/Docs/BO/htm/BO.152.htm#152.052 (accessed Jun. 5, 2024).
