Professional Documents
Culture Documents
Law of Partnership
Law of Partnership
Law of Partnership
Held:
The plaintiff could claim because the relationship
between the individuals had the business
character of a partnership within the scope.
ELEMENTS OF PARTNERSHIP
Present
More than one Agreement
transaction of
person between partners
business activities
Each partner is
Purpose to profit
an agent
1. More than one person
Must have more than one person.
Held:
The action against Defendant fail because
the numbers of partners in the firm
concerned was 25.
Since the firm was void, any legal action taken
could not be allowed.
• Shim Fatt v Leyland Road Bus Co.
Held:
To constitute a partnership, the parties must
have agreed to carry on business or to
share profits in some way in common.
CARRIED ON COMMON ?
Formality
Can be formed with or without written
agreement
• Capacity
Any one of sound mind can be a partner.
A minor partner cannot be held liable and
responsible for any contracts made
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Documents
Partnership Agreement Or Articles of
partnership which provides for all rights and
duties of a partner
• Duration
Depends on the intention of the partners
whether to fix the duration of the
partnership or otherwise
S. 28 (1) :
no condition as partnership duration: may
dissolve by giving notice.
Section 29(1):
if the duration of partnership has expired but all
partners wishes to proceed with the partnership
without having to make a new agreement, the
rights and duties of the partners are still the
same.
RELATIONS OF PARTNERS TO
OUTSIDERS
Examples:
Sleeping partner-bounds by the contract made by
active partners.
Implied Authority
Every partner has implied authority to BIND the
firm.
Depend on the circumstances, nature of business
& practice of the person engaged .
Examples:
A partner sells the firm’s goods & chattels (Dore
v Wilkinson (18177))
Purchasing on the firm’s behalf goods (Bond v
Gibson (1800) 1 Camp 185)
Implied Authority
However,
HOWEVER,
When a partner dies and the partnership business is
continued in the old firm name,
the continued use of that name
Incoming Partners
Retiring Partners
INCOMING PARTNER
S.19(1)
Person that admitted as a partner into an existing
firm will NOT be LIABLE for anything done
BEFORE he became a partner.
RETIRING PARTNER
S.19(2)
A partner retires , he REMAIN LIABLE for
the partnership debts incurred BEFORE his
retirement.
S. 38 (1)
…He IS still LIABLE UNLESS he has given an
express NOTICE that HE IS NO LONGER A
PARTNER to the person he is dealing with
PARTNERSHIP PROPERTY
It must be used EXCLUSIVELY for the purpose
of the firm.
Purchased with partnership money.
It must be stated in the agreement OTHERWISE
It is separate property of partner although it may be
used for or even important to the partnership
business.
(see case Ponnukon v Jebaratnam [1980] 1 MLJ
283)
PARTNERSHIP PROPERTY
Ponnukon v Jebaratnam [1980] 1 MLJ 283
Court held :
The land was not paid with the funds of the
partnership but the fund that raised by the J
himself which is independently of P and the
partnership as well.
PARTNERSHIP PROPERTY
S. 25 (1)
A creditor who obtained judgment against the firm may
SEIZE the partnership property in execution of the
judgment.
HOWEVER,
S. 25(2)
A creditor who obtained judgment against AN
INDIVIDUAL PARTNER, CANNOT seize all the
partnership property but only on the partner’s interest
in the partnership property including profits etc.
RELATION OF PARTNERS TO ONE
ANOTHER
Via agreement
Via agreement
Without
Order of the
Court’s
Court
intervention
1. DISSOLUTION WITHOUT
COURT’S INTERVENTION
By agreement
Partnerships articles may fix the duration of
partnership, and the partnership is terminated
on the expiry of the period.
The partners may mutually agree to dissolve
the partnership at any time.
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• By operation of law
By expiration
If a partnership is entered into a fixed term
(section 34(1)(a)) or for a single adventure or
undertaking section 34(1)(b), the partnership is
dissolved on the expiration of the fixed term or
termination of the adventure or undertaking
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Notice
Section 34(1)(c)
If the partnership is entered into for an
undefined time, any partner may determine
the partnership at any time by notice to the
other partners.
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• By death or bankruptcy
Section 35(1)
Subject to any agreement between the
partners, every partnership is dissolved as
regards all the partners by the death or
bankruptcy of any partner
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• By charging on shares
Section 35(2)
when a partner suffers his share of a partnership
property to be charged with payment of his
personal debt, the other partner has an option of
dissolving the partnership.