1832 formation of partnerships any number of

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18.3.2 FORMATION OF PARTNERSHIPS Any number of individuals could form a partnership. A partnership is relatively easy to form, there being no formal legal requirements for registration. It may be formed by deed, in writing, orally or by conduct. Partnerships are normally formed by the contractual agreement (articles of partnership) entered into by the partners as such, but which would be supplemented by implied terms under the PA 1890 , unless excluded by the agreement. The contract (articles) of partnership will normally make provisions for things like: • The name of the firm and the names of the partners • The location of the business • The contributions of each partner to the business • How the profits of the business would be shared • How decisions would be reached • The power of the partners to bind or not bind the firm • Management of the firm, and the right of the partners with respect thereto • The firm’s account and the signatories thereto • The admission and expulsion of partners • The settlement of disputes • The value of the firm’s good will • The obligation of the partners not to compete with the firm • The death and retirement of partners • The dissolution of the partnership Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 339 PARTNERSHIPS 18.3.3 RIGHTS OF PARTNERS Under s. 24 PA 1890 , unless the partnership agreement expressly or impliedly provides otherwise, partners have the: • Right to share equally in the capital, profits and losses of the business. However, there is no right to remuneration for acting in the partnership business. • Right to participate in management. Right to indemnity in respect of payments made or liabilities incurred in the normal conduct of the firm’s business or for the preservation of the business or its property Right to interest on any money advanced to the firm beyond the agreed contribution from the firm’s profits. • The right to consent before the introduction of another partner. • Right not to have any changes made in the nature of the partnership without the consent of all partners. • Right to settle differences by a majority decision. • Right of access to and a copy of the books of the firm. In addition, s. 25 provides that no partner may be expelled from the firm by others unless the power to do so is included in the partnership agreement. Under s. 20(1) all partnership property – i.e. properties brought in or acquired on account or for the purposes of the partnership and in the course of the business – are to be held and applied exclusively for the partnership business and in accordance with the partnership agreement. What is partnership property may be the subject of disputation where the agreement did not make express provisions. In that kind of situation, the court will determine what partnership property included by reference to what is necessary to give the partnership agreement business efficacy.
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