Partnerships Flashcards
1
Q
Partnership Act 1890
A
No requirement for written partnership agreement
Automatically dissolve on death or bankruptcy of a partner
No real formalities
Enter into agreements on behalf of the partnership
Liabilities are shared & unlimited
Minimum of 2 remaining partners
No retirement clause - dissolves
All partners have equal rights
2
Q
Partnership Agreement
A
Includes:- Duration of partnership Position on death, sickness or incapacity Retirement terms Remuneration Distribution of assets on dissolution Voting rights on key issues How losses will be borne Sanctions for breach of agreement Methods of calculating interest on current & capital accounts - direct proportion to capital contributions
3
Q
Partnerships
A
Not a separate legal entity
Partners do not benefit from limited liability
Owned & controlled by at least 2 partners with no upper limit on the number of partners
Profits have to be allocated between partners
Need their own capital account - usually have 2 one which is the current account which records appropriations made to the partner’s capital balance over time - flexible capital account
