Any number of persons from two could form

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Any number of persons from two could form partnerships; and these include natural persons and incorporated bodies. • There are three types of partnerships – the traditional or general partnership, the limited partnership, and the limited liability partnership. • The traditional partnership is the normal or default form of partnership. Every partnership will be assumed to be traditional except it is registered as a limited partnership or a limited liability partnership. General partnerships are governed by the Partnership Act 1890 unless the partners draw up their own agreement and exclude its provisions. • The general partnership is based on the equality of the partners on matters like contribution of capital, share of profit and liability for losses. If a different state of affairs is desired, the partners must state this in their partnership agreement. • General partners have no separate legal personality. Accordingly, the partners are responsible for all the liabilities of the firm and for the wrongdoings of each other in the course of or in connection with the firm’s business. For the same reason the departure or incapacity of one partner could dissolve the partnership. • Partners have rights and duties which each of them is expected to benefit from and fulfil. • The structure, simplicity, flexibility and privacy of a partnership confer on it some advantages over a company. There are however disadvantages, especially those relating and incidental to lack of legal personality. • The limited partnership is a modified partnership by which one or more partners have limited liability as long as there is at least one general partner with unlimited liability; and as long as the rules relating to limited partnerships are maintained. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY PARTNERSHIPS 355 The limited liability partnership is a hybrid organisation which combines the attributes of a normal partnership with those of an incorporated company. It must be formally incorporated and wound up and is regulated largely as companies are. However, the inner workings of an LLP and the relationship of its members are similar to those of normal partnerships. The LLP is a useful medium for businesses where there are many partners or partners with different skills, or where the business is a complex one, yet the members do not wish to, or cannot, form a fully-fledged limited liability company. 18.7 PRACTICE QUESTIONS 1. State and explain the main advantages and disadvantages of a general partnership 2. State and explain the main duties of partners 3. Distinguish actual and ostensible authority of partners 4. State and explain the main advantages and disadvantages of limited partnerships 5. State and explain the main advantages and disadvantages of Limited Liability partnerships Download free eBooks at bookboon.com Click on the ad to read more MASTER IN MANAGEMENT [email protected] Follow us on IE MIM Experience
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