1. Partnerships
- Created by: KG1999!
- Created on: 16-08-23 17:51
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- 1. Partnerships
- Definition
- Section 1 of the act notes this exists when two or more persons carry on business together to make a profit
- There is not a separate legal personality
- A company can be a partner
- Creation
- Partners are liable for the debts of their firm
- If you want to enforce a right, obligation or duty against a partner then existence needs to be proven
- Pursuing commercial enterprise together through limited liability means a general partnership will not occur
- Section 2 of the Act provides rules on creation. Usually share of profits
- The Agreement
- General rule of Contract formation - expressly stated and in writing
- Sec 19 encourages terms to be negotiated. Act also determines rights and duties if they do not settle terms
- Management - every partner can participate. No limit to the number of members
- Changing the nature of the partnership requires unanimous decison
- 24(1) says partners equally share in capital but unequal shares is inferred as partners can make unequal contributions
- Share in profits, contribute to losses
- Responsibilities to each other
- Conduct themselves with good faith towards co-partners in dealings and transactions
- Helmore v Smith - no stronger fiduciary relationship than one which exists between partners
- Law v Law - not to conceal anything
- s29 and s30 - cannot benefit themselves at each other's expense, account for personal benefits from the partnership, no conflict of interests, duty exists throughout entirety
- s19 - common practice to impose contractual duty of good faith but nothing states they have to
- Restraint of trade - express terms needed. NOT enforceable by courts as they are against public interest. Bridge v Deacons - only to protect legitimate interest
- Dissolution
- Technical or Partial - when partnership continues despite changes in membership
- General or full dissolution - Complete winding up
- Dissolution by agreement of all partners - unanimity (s19)
- Dissolution by agreement in advance - If they want to continue after one dies it will need to be expressly agreed
- Retirement at Will s26, Dissolution by expiration or notice s32, Dissolution by bankruptcy, death or charge s33, Dissolution by illegality s34.
- s41 enables partners to rescind for misrepresentation
- Definition
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