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Business Law and Practice > Partnership > Flashcards

Flashcards in Partnership Deck (16)
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1
Q

When does a partnership occur?

A

When 2 or more persons run and own a business together.

It commences when s1 of PA 1890 is satisfied.

2
Q

S1 of PA 1890

A

A partnership is where 2 or more persons are associated for profit

3
Q

Type of partnerships

A

Oral
In writing
Implied by conduct

4
Q

Rights and responsibilities of partners

A
  1. the right to be involved in making decisions which affect the business.
  2. the right to share in profits of the business.
  3. the right to examine the accounts of business.
  4. the right to insist on openness and honesty.
  5. the right to veto the introduction of a new partner.
  6. the responsibility to share any losses made by the business.
5
Q

Duration of partnership

A

s 26 of PA 1890 - by notice to others (partnership at will)

6
Q

Dissolution of partnership

A
s.32 of PA 1890 defines the basis upon which partnerships are to be disolved
s 27 and s 32 expiry of a fixed term. 
s33 death or bankruptcy
s34 illegality
s35 by court order. 
Retirement not provided under PA.
7
Q

Liability of partners for partnership debts

A
  1. Power of partner to bind the firm s5 of PA 1890
  2. Partners bound by actions on behalf of the firm. s6
  3. Partner using credit from firm for private purposes. s7
  4. Effect of notice that firm will not be bound by acts of partner
8
Q

When will the firm be liable?

A
  1. Actual authority.

2. Apparent (ostensible authority).

9
Q

Actual authority

A
  • actions which were authorised:
    a) partners acting jointly in making the contract.
    b) express actual authority: instructing a partner to represent the firm in a particular transaction.
    c) implied actual authority: as above but implied.
10
Q

Apparent (ostensible authority)

A
  • not authorised, but looks from the outside as if they were authorised.
  • agency law - each partner is an agent
    S 5 - firm is liable if:
    a) the transaction relates to the type of business in which the firm is apparently engaged.
    b) the transaction is one for which a partner in such a firm would usually be expected to have authority to act.
    c) the other party did not know that the partner did not have authority to act.
    d) the other party deals with a person whom he knows/believes to be a partner.
11
Q

Personal liability

A

In instances where the partner acted with apparent authority he is also personally liable.

12
Q

Tortious liability

A

S 10 - liability of the firm for its wrongs.

S12 - jointly and severly.

13
Q

Against whom can the firm’s liability

A
  1. the partners who made the contract
  2. the firm - CPR part 7, PD7
  3. any of the persons who were partners at the time of the transaction.
  4. someone who left before the debt or who arrived after the debt, if:
    holding out
    failure to give proper notice of retirement.
    a novation agreement.
14
Q

Person’s liability for holding out

A

where a creditor has relied on a representation that a particular person was a partner in that firm - s 14

15
Q

Person’s liability for failure to give proper notice of retirement

A

actual notice, advertisment in the London Gazette - s 36

16
Q

Liability under a novation agreement

A

tri-partite contract: creditor, old partnership, new partnership