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Partnership Presentation - Partnership Def s 3(1 PA a...

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Partnership Def: s. 3(1) PA: a relation wh. subsits between persons carrying on a business in common with a view of profit s.3(2) excludes: registered company, co-operative society, company or association formed under the law that has effect in Malaysia, or by Acts of the UK parliament, Royal charter
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Important elements of a partnership 1- members s. 3(1), s. 14 and s. 47(2) maximum members = 20; professional partnership = 30. ( s.14(3)(a)(b)) Tan Teck Hee v Cheng Tian Peng Carrying business with 25 members was not a valid partnership. Cannot take legalaction. Shim Fatt v Leila Road Bus & Co , P paid deposit to D, a firm with more than wo partners. P cannot sue D because a legal action cannot be taken again Illegal firm.
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2- Agreement bet the partners to carry business in common s. 2 Business includes trades, occupation or profession. Soh Hood Beng v Khoo Chye Neo, several people established a body which advanced money to its members. The money were obtained from the members and every member can take the loan one after the other. Held: not a business that constitute a partnership. Smith v Anderson Business refers to repetitive activities.
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In common – together or some partners carry the business for the other partners 3- profit s. 3(1) – did not define profit Re Spanish Prospecting Co . Ltd. " The word 'profits' has...a well-defined legal meaning, and this meaning coincides with the fundamental conception of profits in general parlance, although in mercantile phraseology the word may at times bear meanings indicated by the special context which deviate in some respects from this fundamental signification. 'Profits' implies a comparison between the state of a business at two specific dates usually separated by an interval of a year. The fundamental meaning is the amount of gain made by the business during the year. This can only be ascertained by a comparison of the assets of the business at the two dates.
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In Soh Hood Beng (See above) No intention to gain profits. One of the reason why the court held that the firm was not a partnership. 4-other statutory elements that affects the existence of a partnership a) s. 4(a) Co-ownership of a property Joint tenancy , joint property, part-ownership etc, not necessarily proof of a partnership Example: French v Strying Joint owners of a horse was not partners in a partnership
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b) s. 4(b)-Sharing gross profits Whether parties have common interest or joint right in any property – not necessarily partners Burnard v Aaron and Sharpley One of joint owners of a ship took over exclusive management of the ship bearing all expenses and pays 1/3 of the gross earning to the other joint- owner, they were not partners
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c) Sharing of profits s. 4(c)- sharing of profit – evidence of partnership. But not in all c/stances: i-A loaned RM20,000 to a firm, B. B paid by installment from its profits. A not necessarily a partner to the firm.
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