N.Y. Laws » CHAPTER Partnership / ARTICLE Nature of a Partnership
New York Consolidated Laws

N.Y. Partnership Law § 11 (2026)

Rules for determining the existence of a partnership

✓ current as of May 2026
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§ 11. Rules for determining the existence of a partnership.  In
determining whether a partnership exists, these rules shall apply:
  1. Except as provided by section twenty-seven persons who are not
partners as to each other are not partners as to third persons.
  2. Joint tenancy, tenancy in common, tenancy by the entireties, joint
property, common property, or part ownership does not of itself
establish a partnership, whether such co-owners do or do not share any
profits made by the use of the property.
  3. The sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them have a joint or
common right or interest in any property from which the returns are
derived.
  4. 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 no such
inference shall be drawn if such profits were received in payment:
  (a) As a debt by installments or otherwise,
  (b) As wages of an employee or rent to a landlord,
  (c) As an annuity to a surviving spouse or representative of a
deceased partner,
  (d) As interest on a loan, though the amount of payment vary with the
profits of the business,
  (e) As the consideration for the sale of the good-will of a business
or other property by installments or otherwise.
Notes of Decisions
Cited in 17 cases (1 in the last 5 years), 1986–2024 · leading case: Hammond v. Smith, 2017 NY Slip Op 5337 (N.Y. App. Div. 2017).
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Hammond v. Smith, 2017 NY Slip Op 5337 (N.Y. App. Div. 2017). · cites it 2× “Although a person's receipt of a share of profits is prima facie evidence that he or she is a partner ( see Partnership Law § 11 [4]), there is no allegation or evidence that plaintiff received a share of profits.”
Bickhardt v. Ratner, 871 F. Supp. 613 (S.D.N.Y. 1994). · cites it 2× “’”) (quoting N.Y. Partnership Law § 11 (4)(d) (McKinney 1988)).”
Brodsky v. Lewis J. Stadlen, 138 A.D.2d 662 (N.Y. App. Div. 1988). “No one characteristic of a business relationship is determinative in finding the existence of a partnership in fact (see, Partnership Law § 11; Reuschlein & Gregory, Agency and Partnership § 262).”
Joachim v. Flanzig, 3 Misc. 3d 371 (N.Y. Sup. Ct. 2004). · cites it 3× “Partnership Law § 11 (4) creates a statutory inference that receipt of a share of the profits in a business is prima facie evidence that one is a partner.”
Fasolo, Michael v. Scarafile, Joseph a., 120 A.D.3d 929 (N.Y. App. Div. 2014). “Although the sharing of business profits constitutes prima facie evidence of the existence of a partnership (see Partnership Law § 11 [4]), it is not dispositive; rather, “all of the elements of the relationship must be considered” (Blaustein, 161 AD2d at 508 ; see Boyarsky v…”
Scharf v. Crosby, 120 A.D.2d 971 (N.Y. App. Div. 1986). · cites it 2× “Thus, plaintiffs’ argument that they are entitled to the statutory presumption of a partnership between defendants because of a sharing of profits (Partnership Law § 11 [4]) is without merit.”
Boyarsky v. Froccaro, 131 A.D.2d 710 (N.Y. App. Div. 1987). “While it is true that a sharing of the profits generally constitutes prima facie evidence of the existence of a partnership (see, Partnership Law § 11), the fact that an individual is to receive a share of the profits is not dispositive, since all of the elements of the…”
ACLI Gov't Sec., Inc. v. Rhoades, 813 F. Supp. 255 (S.D.N.Y. 1993). “N.Y. Partnership Law § 11 (2) (McKinney 1988).”
Olson v. Smithtown Med. Specialists, 197 A.D.2d 564 (N.Y. App. Div. 1993). “If an individual receives a share of the profits of a business, it is prima facie evidence that he is a partner in the business, as long as these profits were not received by an employee as wage payments (see, Partnership Law § 11 [4] [b]). We find that the plaintiff…”
Weil v. Chu, 120 A.D.2d 781 (N.Y. App. Div. 1986). “A partnership is defined as "an association of two or more persons to carry on as co-owners a business for profit” (Partnership Law § 10 [1]). In determining the existence of a partnership, "[t]he receipt by a person of a share of the profits of a business is prima facie…”
In Re Matis, 74 B.R. 363 (Bankr. N.D.N.Y. 1987). · cites it 2× “” Partnership Law § 11, subd. 1, makes clear that “persons who are not partners as to each other are not partners as to third persons.”
Farmer v. State Tax Comm'n, 144 A.D.2d 720 (N.Y. App. Div. 1988). “, 94 AD2d 211, 214 , affd 60 NY2d 936 ) and the sharing of profits and losses (Matter of Steinbeck v Gerosa, 4 NY2d 302, 317 , appeal dismissed 358 US 39 ; see also, Partnership Law § 11 [4]; Scharf v Crosby, 120 AD2d 971, 972 ; Matter of Wells, 36 AD2d 471, 475 , affd 29 NY2d…”
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