Partnerships

Question 1

Outgoing partners - liability for debts incurred whilst partner at the firm

Answer 1

Liable for debts incurred whilst they were a partner at the firm

If Indemnity agreement - outgoing partner is liable for debts incurred whilst a parter at the firm, can claim indemnity from other partners

Not liable for debts incurred whilst they were a partner at the firm;
- Novation agreement - the new incoming partner takes on the debts of the outgoing partner
- Deed of release

Question 2

Partnerships definition

Answer 2

Two or more people carry on a business in the common view of profit - s.1 PA 1890

Question 3

Outgoing partners liability for future debts

Answer 3

Notice in London Gazette or individual notice to creditors

Must avoid being held out;
- doing something which suggests they were a partner
- relief on by a third party
- third party gives credit to the firm as a result

If they hold out - outgoing partner is liable for debts incurred as a result of this

Question 4

Death or bankruptcy of partner

Answer 4

Automatic dissolution of partnership unless the remaining partners buy out the outgoing partner’s share

Question 5

Decisions of partners

Answer 5

Simple majority

Unanimous agreement;
- Change nature of business
- Change terms of Partnership agreement
- Appointment or exclusion of partner