Partnership

Transfer and Death

The Partnership Act provides that partner admission requires unanimous consent, though partnership agreements may specify otherwise. Partners can assign their interests, subject to terms outlined in the act or agreements. Assignees assume all associated rights and obligations.… Read the rest

Termination

Dissolution marks the end of a partnership, potentially followed by asset winding up, with technical dissolution possible upon partner changes. Termination rights vary, with notice often required unless specified otherwise in agreements. Grounds for dissolution include partner death, bankruptcy, or unlawful business conduct.… Read the rest

Partnership Property

Partnership property, distinct from individually owned property, is available to settle debts and liabilities. Partners hold a “chose in action,” with their interest defined upon winding up. Identifying partnership assets requires understanding intentions and agreements. Assets purchased with partnership funds are presumed partnership property, reflected in accounts.… Read the rest

Partnership Insolvency

Partnerships serve as vital structures for conducting business, especially in sectors like law where incorporation isn’t an option. Partnerships lack legal entity status, leaving partners fully liable for debts. Insolvency proceedings for partnerships involve winding up and dissolution by the High Court, often triggered by failure to pay debts or satisfy judgments.… Read the rest

Partnership Agreements

A partnership is a contractual agreement between individuals to conduct business together, with terms governing their rights and responsibilities. While a partnership agreement need not be in writing, having one ensures clarity and certainty. The Partnership Act of 1890 sets default rules if not specified in the agreement, though some fundamental rules remain unalterable.… Read the rest

Partner’s Liability

Partners bear personal liability for partnership debts and obligations, regardless of profit-sharing arrangements, potentially facing unlimited liability. Jointly liable, they can claim contributions if payments are disproportionate. Unlike company shareholders, partners have no limited liability, being liable for partnership debts.… Read the rest

Non-Court Dissolution

Waiving Winding Up Following dissolution, either with or without a court order, the partnership must be wound up. The strict position, in the absence of an agreement to the contrary, is that upon the dissolution of the partnership, the partners are entitled to have the property of the partnership applied towards payment of the debts and liabilities of the firm and have the surplus applied towards whatever sums may be due to them as partners.… Read the rest

Nature of Partnership

A partnership is formed by individuals collectively, lacking a separate legal identity. Partners share joint and several liability for partnership debts, with recourse to personal assets if necessary. Partners act as agents for each other in partnership contracts, with authority implied unless otherwise stated.… Read the rest

Mutual Duties

Partnerships may operate under agreements that determine rights and duties among partners. The Partnership Act applies if no specific terms exist. Agreements may establish structures akin to limited companies. Payment for management isn’t automatic. Profits and drawings are subject to agreement.… Read the rest

Goodwill

Goodwill in partnerships is a crucial asset reflecting customers’ loyalty and future business prospects. While not explicitly defined by the Partnership Act, its ownership and treatment are typically outlined in partnership agreements. Goodwill is usually considered separate from the firm’s capital and may be distributed among partners based on various criteria. … Read the rest