Business Law and Practice Flashcards
General partnerships
What are the three requirements for a general partnership under the Partnerships Act 1890?
- Two or more persons
- Carrying on a business in common
- With the intention to make a profit
Persons includes corporate bodies as well as people
General partnerships
Is it material if a business never actually realises a profit?
No, as long as they intend to
General partnerships
What is a party receiving a share of the profits of a business prima facie evidence of?
That a partnership exists
Agreement to or sharing of losses is some evidence of a partnership, but not prima facie evidence
General partnerships
What is the general rule for a partner’s ability to bind the partnership and other partners?
A partner in a partnership is an agent of the partnership and the other partners, and can bind both as long as he has authority
General partnerships
What are the two ways a partner can be bestowed with actual authority?
- Expressly authorised by the partners, either in the partneship agreement or through a vote
- Impliedly authorised by the partners’ failure to object to past conduct of this nature
General partnerships
What type of act must a partner make to bind the firm through apparent/ostensible authority?
An act carrying on the business of the firm in the usual way
Would a reasonable person think a business of this kind would usually do this act? What authority would a reasonable person expect a partner in such a business to have?
General partnerships
What two things must be true for apparent authority to not bind the firm?
- Partner had no authority to act, and
- The person with whom the partner was dealing either knew the partner had no authority to act, or did not think the person with whom they were dealing was a partner
General partnerships
If it turns out that there was neither actual nor apparent authority, who is bound?
Only the partner who entered into the dealing, in their personal capacity
General partnerships
What is a general partner’s liability for debts of the partnership?
What does it mean that partnership liability is joint and several?
Unlimited
A creditor can pursue one or all of the partners for partnership debts
General partnerships
When will the partners be jointly and severally liable for torts committed by another partner?
When the tort is committed in the course of business, or with authority of the partners
What topics does the full Business Law deck contain, and how do I access it?
The full deck contains over 350 flashcards dealing with the SRA syllabus:
- General Partnerships;
- LLPs;
- Formation of Companies
- Directors, Officers, Members, and Joint Decision-Making in a Company;
- Raising Finance;
- Recordkeeping and Filing;
- Insolvency.
Access is currently £25 per full subject, e.g. Business, or £250 for access to all 16 SQE1 decks / £200 for 13 SQE2 decks. Visit www.cleverprep.co.uk to arrange full access.
