BLAW211: Partnerships
Partnership Law Act
2019
Limited Partnerships Act
2008
Partnership Definition s8
The Relationship that exists between persons carrying on a business in common with a view to profit
Carrying on a Business s7
includes every trade, occuptation or profession
With a View to Profit
sharing gross returns does not necessarily amount to partnership.
Net Profits have to be shared (expenses)
In Common
if operated by or on behalf of people, they are in common
(people carrying on business on behalf of sole proprietor, not partnership)
Requirements for Partnership s9, s11-15
- no restriction on number of partners
- companies may be partners
- agreement in writing is not required
Rights and Duties Between Partners s35
- rights and duties may be varied by the consent of all partners
Profits of the Partnership s82-84
- divided equally unless agreement
- loss paid first out of undistributed profits, then capital, then by partners
- On dissolution of assets: advances and capital distributed equally to profit share
Management of the Partnership, s48 - 51
- partners all have the right to participate in management
- no right to remuneration (paid for the work)
- admission of new partners needs consent of others
- ordinary matters decided by majority
- change in nature of business decided by ALL partners
Termination of Partnership
dissolve on the death of a partner unless provided otherwise in a deed
Expulsion
Majority cannot expel any partner without specific right
Restraint of Trade Clause
- Restricition on partner's ability to leave partnership and set up similar business within 3 years
Fudiciary Duty of Partners
- must act in good faith
e.g not compete with firm or make a private profit at the expense of the firm
Conflicts of Interest
where info gained by one partner in one branch is of use to another partner in another branch
Fiduciary must disclose all information in their possession to their client
"Chinese Walls" = Information Barriers
Partners and Outsiders, s17
Every partner is an agent of the firm and of the other partners for the purpose of the business of the partnership
An act of a partner, s80
An act of a partner binds the firm and the other partners IF the act is done for carrying on in the usual way business of the kind carried out by the firm
- Not if the partner has no authority and the person with whom that partner is dealing knows this
Duration of Liability, s31 and s32
- New partner not liable for old debts and neither is retiring partner after they leave
- Agreement between partners on liability has no effect on third party (unless they are also a party)
- Death or bankruptcy of a partner terminates liaiblity from that date
Tort Liability
- Partners liable for torts of other partners committed during course of business, or with authority of others
- Tort: act that arise in injury or harm and requires civil action
General Partners
- Manage the partnership property and business
- Are jointly and severally liable with the limited partnership for debts and liabilities
Limited Partners
- not liable for debts and liabilities (if not apart of general management)
- Financial risk limited to their investments made
- income and loss flow to partners personally
- confidential identity
- A seperate legal entity