Nature of partnerships

Question 1

s1(1) PA 1890

Answer 1

A partnership is the relation which subsists between persons carrying out a business in common with a view of profit

Question 2

What does a business connote?

Answer 2

A continuing activity involving a series of commercial transactions which, if successful, result in a profit for participants

Question 3

Mann v D’ Arcy 1968

Answer 3

A single transaction or venture can still constitute a business or trade, such as a one-off purchase of goods and services

Question 4

Khan and another v Miah and another

Answer 4

• Partners had to prepare for business by acquiring premises, securing planning consent and putting their affairs in order to enable them to carry on business as restaurateurs
• Court held that even prior to starting trade, the partners were involved in commercial activity with a view to starting profit and so it was a joint venture

Question 5

Christie Owen and Davies plc v Raobgle Trust Corporation 2011

Answer 5

Held that a partnership was in existence when the partners purchased premises for future development as a restaurant

Question 6

Saywell v Pope 1979

Answer 6

The receipt of a share of profits does not automatically make people partners when individuals behave as though they’re not partners

Question 7

Re Fisher and Sons 1912

Answer 7

When defining ‘carried out in common’, it is important to consider the ultimate beneficial interest of the profits generated, like here when executors continued the business of the deceased

Question 8

Does there have to be an intention to share profits between the partners?

Answer 8

No

Question 9

Stekel v Ellice 1973

Answer 9

A person receiving a salary could still be a partner if other factors made such a designation appropriate

Question 10

Cox v Hickman 1860

Answer 10

If other factors suggest that there is no partnership, the receipt of profits can be easily rebutted