Hong Kong Ordinances

PARTNERSHIP ORDINANCE - SECT 4

Rules for determining existence of partnership

In determining whether a partnership does or does not exist, regard shall be
had to the following rules-

   (a)  joint tenancy, tenancy in common, joint property, common 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 thereof;

   (b)  the sharing of gross returns does not of itself create a partnership,
        whether the persons sharing such 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;

   (c)  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 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 him a partner in
        the business; and in particular-

        (i)    the receipt by a person of a debt or other liquidated amount,
               by instalments or otherwise, out of the accruing profits of a
               business does not of itself make him a partner in the business
               or liable as such;

        (ii)   a contract for the remuneration of a servant or agent of a
               person engaged in a business by a share of the profits of the
               business does not of itself make the servant or agent a partner
               in the business or liable as such;

        (iii)  a person being the widow or child of a deceased partner, and
               receiving by way of annuity a portion of the profits made in
               the business in which the deceased person was a partner, is
               not, by reason only of such receipt, a partner in the business
               or liable as such;

        (iv)   the advance of money by way of loan to a person engaged or
               about to engage in any business on a contract with that person
               that the lender shall receive a rate of interest varying with
               the profits, or shall receive a share of the profits arising
               from carrying on the business, does not of itself make the
               lender a partner with the person or persons carrying on the
               business or liable as such: Provided that the contract is in
               writing and signed by or on behalf of all the parties thereto;
               and

        (v)    a person receiving, by way of annuity or otherwise, a portion
               of the profits of a business in consideration of the sale by
               him of the goodwill of the business is not, by reason only of
               such receipt, a partner in the business or liable as such.