Partnership bus law

• mere failure to register does not mean that the partners cannot enforce their rights against each other : Gulazam 's case
• Partners’ duties to each other governed by:

  The terms of the partnership agreement / contract (deed)

  Partnership Act 1961

  s26 – default rules (where not contained in partnership agreement

  ss30-32  - fiduciary duties
• Every partner has the right to manage the partnership s.26(e)

  Partners can not be added or changed without the consent of the other partners; s26 (g)

  Changes to the type of business engaged in by the partnership, must receive the consent of all the partners s26 (h)

  Any additional “advance”  payment by a partner beyond  the amount of capital which he has agreed to subscribe, is entitled to 8% interest per annum s.26(c)

  Partnership books are to be kept at the place of business & available to all partners s.26 (i)
• To render accounts - s. 30 PA

  •Each ‘partner’ must make full disclosure of all things/matters affecting the partnership to other partners or their legal representatives.• •Accountability to private profits - s. 31 (1)

  Each partner must account for ‘benefits’ derived without consent.

  Not to compete with firm - s.32

  If a partner carries on the “same” type of business without consent, they must account to the firm all the profit.
• Section 7

  ‘Every partner  is an agent of the firm
• Section 16

  If a partner/s ‘hold out’ to third parties that a non-partner is a partner then due to the rules of ostensible authority, the firm will be held liable as if that person was a partner.

  The elements of estoppel will have to be established to bring a case within the purview of section 16.
• Section 11

  •Every partner jointly liable for whole debt while a partner•That is, all partners can be sued, but one partner might end up paying the whole debt (if others are bankrupt)•Unlimited personal liability
• Section 12 and 13

  If a partner:

  commits a wrongful act (tort)

  while acting in the ordinary course of the firm’s business OR while acting with co-partners’ authority

  And causes loss or injury to a third party

  Then the partnership (= all partners) will be just as liable as that partner

  Section 14

  Joint & several liability... Can sue each partner separately until damages satisfied OR sue firm jointly
• •Although partners are jointly liable in civil cases, they are not jointly liable in criminal cases• Chung Shin Kian's case
• •A new partner is not liable for the debts of the partnership at the time of his admission• Section 19
• •Section 26(g), A person cannot be introduced as a partner of the firm without the consent of all the partners• Section 27 •A majority of the partners in the firm cannot expel any partner, unless the power to do so has been conferred by express agreement between the partners
• 
  

  Section 22(1) defines ‘partnership property’

  items brought into the partnership as partnership property

  Items acquired on behalf of the partnership

  Items acquired in the course of the partnership business

  must be for exclusive use of partnership
• Dissolution is the ‘break up’ of the particular partnership.

  When a partner leaves[for any reason]  what happens ?

  •old partnership dissolves; •new partnership is born.
• s 26(a) all partners should share profits and capital and contribute to losses equally
• s. 28 (2) PA – actual notice to existing clients: s. 38 (2) PA notice in government gazette and local newspaper
• s23. Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm