| Definition | 1 | |
| Existence | 2 | Ownership of common property is not a P’ship (e.g. Joint tenancy, tenancy in common, joint property, common property, or part ownership) Sharing of Gross Returns is not a P’ship (occasional or regular payments? Are profits being distributed? If it is profit then there is a P’ship See just below) The share in profits primâ facie suggests a P’ship S.2(3) (But check s.2(3)(a)(b)(c)(d)(e)) |
| P’s Power to bind | 5 | Every P is an agent of the firm and his acts will bind all Ps (acts within the normal course of business) Unless the P had no authority (& the 3rd person either knows that he has no authority, or does not know or believe him to be a partner.) |
| 6 | |
| Firm money | 7 | |
| Liability | 9 | |
| Liability of Incoming & Outgoing Partners | 17 | Incoming P is not liable for anything done by the firm before he becomes a P (s.17(1)) Outgoing P remains liable for debts or obligations incurred before retirement (s.17(2)) Outgoing Ps may be discharged from liabilities expressly or impliedly by course of dealings (s.17(3)) (AKA “agreement to release” or “novation”. Novation has to be agreed upon by all P’s and the relevant creditor (only likely to be accepted by creditor if incoming P accepts liability. If no new P (or new P does not accept) very unlikely that creditor will sign a novation agreement)) |
| Variation | 19 | |
| Partnership property | 20 | |
| Interests of Partners | 24 | Share equally in the capital and profits/losses (s.24(1)) Firm must indemnify every P for liabilities incurred in proper conduct of the business (s.24(2)) Payment beyond capital advanced for partnership, he’s entitled to interest at 5% per annum from date of payment (s.24(3)) P is not entitled to interest on subscribed capital before profits have been ascertained (s.24(4)) No P is not entitled to remuneration (s.24(6)) No person may be introduced as a P without consent of all other Ps (s.24(7)) Most decisions by simple majority (s.24(8)) P’ship books are to be kept at the place of business (s.24(9)) |
| Expulsion | 25 | |
| Retirement | 26 | P@will If No fixed term of P’ship, leaving P just gives notice of intention to all other Ps. Where P’ship constituted by deed, a signed notice in writing, shall be sufficient for retirem |
| Renewal | 27 | |
| Accountability | 29 & 30 | Ps’ duty not to compete with P’ship, unless given consent by other Ps. If no Consent, then P accounts for any private profits made from a transaction concerning the P’ship or a competing business (Competing means: doing the same business as the P’ship) Applies to a post-dissolution P’ship |
| Dissolution | 32 | If P’ship is fixed term (s.32(a)) or single undertaking (s.32(b)) by expiration of term or undertaking If P’ship is undefined term, by notice of intention to dissolve P’ship(s.32(c)) |
| 33 | |
| 34 | |
| 35 | |
| Rights of Person dealing with the Firm | 36 | Outgoing partners “OP” will remain liable to creditors/persons who may want to do business with them unless OP or firm: | Places an advertisement in the London Gazette Gives Actual notice to creditors of retirement/change in P’ship, (Holding out (s.14 PA 1890)) |
| Distribution of Assets | 44 | Liabilities are paid first out of profits, next out of capital, finally out of P’s personal proportion to their capital investment (s.44(a)) -
Assets shall be applied in the following order: (s.44(b)) Pay debts to persons who are not Ps Pay to each P proportionately as to advances made Pay to each P proportionately as to capital investment Residue is divided up equally |
