Partnerships

Question 1

When does a Partnership exist?

Answer 1

When two or more persons agree that they will run a business together with a view to profit.

Agreements can be oral or in writing or may be implied by conduct.

Question 2

Who can be a partner?

Answer 2

Any legally capable person.

Companies as well as individuals may be partners with other companies/individuals.

Question 3

Partnership name

Answer 3

No restrictions apply if the names consists only of the surname of all partners, with or without forenames or initials.

In any other event, the CA will apply and certain words or expressions will require prior approval. These include words and expressions contained in the Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014.

Question 4

Usual clauses in a partnership agreement

Answer 4

The Parties.

Commencement Date.

Nature and Place of Business.

Partnership Name.

Duration.

Capital.

Income.

Partnership property.

Management.

Retirement.

Death and bankruptcy.

Expulsion.

Payment for outgoing partner’s share.

Restrictive Covenants.

Question 5

The Parties

Answer 5

No new partner may be admitted without the consent of all of the partners.

Question 6

Commencement Date

Answer 6

Partnership will exist from the date the s.1 PA criteria are satisfied. An agreement subsequent to that date will only govern rights and responsibilities from that date.

Question 7

Nature and Place of Business

Answer 7

The nature of the business is important to the question of a partner’s authority and the extent to which a partner may bind the partnership.

Unanimity is required by the partners in order to change the nature of the business.

Question 8

Duration

Answer 8

A partnership may run for a specific venture or a fixed term. A fixed term partnership that continues after expiry will be presumed to continue in terms that are consistent with a partnership at will.

Question 9

Partnership at will

Answer 9

Where no specific duration or fixed term is set.
- any partner may determine the partnership (bring it to an end) at any time on giving notice to the other partners. No requirement for written notice unless agreement was by deed.

• partnership shall be dissolved from the date specified in the notice, or, if none is specified, the date of communication of the notice.