Illinois Compiled Statutes 805 ILCS 206/202 – Formation of partnership
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(a) Except as otherwise provided in subsection (b), the association of 2 or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.
(b) An association formed under a statute other than this Act, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this Act.
(c) In determining whether a partnership is formed, the following rules apply:
(1) Joint tenancy, tenancy in common, tenancy by the
(b) An association formed under a statute other than this Act, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this Act.
Terms Used In Illinois Compiled Statutes 805 ILCS 206/202
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Joint tenancy: A form of property ownership in which two or more parties hold an undivided interest in the same property that was conveyed under the same instrument at the same time. A joint tenant can sell his (her) interest but not dispose of it by will. Upon the death of a joint tenant, his (her) undivided interest is distributed among the surviving joint tenants.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Statute: A law passed by a legislature.
- Tenancy in common: A type of property ownership in which two or more individuals have an undivided interest in property. At the death of one tenant in common, his (her) fractional percentage of ownership in the property passes to the decedent
(c) In determining whether a partnership is formed, the following rules apply:
(1) Joint tenancy, tenancy in common, tenancy by the
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entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.
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(2) The sharing of gross returns does not by itself
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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.
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(3) A person who receives a share of the profits of a
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business is presumed to be a partner in the business, unless the profits were received in payment:
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(i) of a debt by installments or otherwise;
(ii) for services as an independent contractor or
(ii) for services as an independent contractor or
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of wages or other compensation to an employee;
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(iii) of rent;
(iv) of an annuity or other retirement or health
(iv) of an annuity or other retirement or health
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benefit to a beneficiary, representative, or designee of a deceased or retired partner;
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(v) of interest or other charge on a loan, even
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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
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(vi) for the sale of the goodwill of a business
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or other property by installments or otherwise.
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