<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 48-7A-202 - Formation of partnership. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2069814Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2069814SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2069814CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2069814Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2069814DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2069814DefaultParagraphFont-000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2069814Normal-000002 { margin-top: 0; margin-bottom: 0; text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } p.s2069814Normal-000003 { margin-top: 0; margin-bottom: 0; margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-right: 0; } p.s2069814Normal-000004 { margin-top: 0; margin-bottom: 0; margin-left: 1.14in; text-indent: -0.44in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-right: 0; } span.s2069814000005 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2069814SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2069814SCL-000006 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2069814Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=48-7A-202"><span class="s2069814SENU">48-7A-202</span></a><span xml:space="preserve" class="s2069814SENU">. </span><span class="s2069814CL">Formation of partnership.</span></p><p dir="ltr" class="s2069814Normal-000000"><span class="s2069814DefaultParagraphFont">(a) Except as otherwise provided in subsection (b), the association of two or more persons to carry on as co</span><span class="s2069814DefaultParagraphFont-000001">-</span><span class="s2069814DefaultParagraphFont">owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.</span></p><p dir="ltr" class="s2069814Normal-000002"><span class="s2069814DefaultParagraphFont">(b) An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.</span></p><p dir="ltr" class="s2069814Normal-000002"><span class="s2069814DefaultParagraphFont">(c) In determining whether a partnership is formed, the following rules apply:</span></p><p dir="ltr" class="s2069814Normal-000003"><span class="s2069814DefaultParagraphFont">(1)    Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co</span><span class="s2069814DefaultParagraphFont-000001">-</span><span class="s2069814DefaultParagraphFont">owners share profits made by the use of the property.</span></p><p dir="ltr" class="s2069814Normal-000003"><span class="s2069814DefaultParagraphFont">(2)    The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.</span></p><p dir="ltr" class="s2069814Normal-000003"><span class="s2069814DefaultParagraphFont">(3)    A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(i)    Of a debt by installments or otherwise;</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(ii)    For services as an independent contractor or of wages or other compensation to an employee;</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(iii)    Of rent;</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(iv)    Of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(v)    Of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or</span></p><p dir="ltr" class="s2069814Normal-000004"><span class="s2069814DefaultParagraphFont">(vi)    For the sale of the goodwill of a business or other property by installments or otherwise.</span></p><p dir="ltr" class="s2069814Normal"><span xml:space="preserve" class="s2069814000005"> </span></p><p dir="ltr" class="s2069814Normal"><span class="s2069814SCL">Source:</span><span xml:space="preserve" class="s2069814SCL-000006"> SL 2001, ch 249, § 202.</span></p></div></body></html>