Section 6 in The Jammu and Kashmir State Partnership Act, 1996
6. Mode of determining existence of partnership.
- In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.Explanation 1. - The sharing of profits or of gross returns arising from properly by persons holding a joint or common interest in that property does not of itself make such persons partners.Explanation 2. - The receipt by a person of a share of the profits of a business, or of payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business:and, in particular, the receipt of such share or payment-(a)by a lender of money to person engaged or about to engage in any business.(b)by a servant or agent as remuneration.(c)by the widow or child of a deceased partner as annuity, or(d)by a previous owner or part owner of the business, as consideration for the sale of the goodwill or share thereof.does not of itself make the receiver a partner with the persons carrying on the business.
