Overview A partnership is not a separate legal entity. It consists of its members collectively. They can sue and be sued in the firm name under court rules. However, court orders are made by or against the partners personally and collectively. Partners are ultimately jointly and severally liable for the liabilities of the partnership. In the first instance, they are […]
Principal Type The only general form of limited partnership available in Ireland for trading purposes is that under the Limited Partnership Act 1907. A limited partner may not take part in the management of the firm. He may not bind the firm. In return, and provided that the relevant conditions are complied with, he has limited liability for the partnership […]
Principal Type The only general form of limited partnership available in Ireland for trading purposes is that under the Limited Partnership Act 1907. A limited partner may not take part in the management of the firm. He may not bind the firm. In return, and provided that the relevant conditions are complied with, he has limited liability for the partnership […]
Existence of Partnership A partnership agreement need not be in writing. It may be verbal or implied from the conduct of the parties. The way a partnership is in fact conducted may provide evidence of an agreement which varies the written partnership agreement. A partnership can exist inadvertently. A one-off transaction cannot be a partnership as it will not constitute […]
Written Agreement A partnership is a contract between persons to carry on business in common. The terms of the agreement determine the legal rights and obligations of the partners. The agreement may be as formal or informal as the parties decide. It should be in writing, so as to provide greater certainty. The Partnership Act 1890 determines what rules apply in […]
Agency of Partners I Each partner is the agent of the other partners in relation to matters within the scope of the partnership. The acts of a partner in the course of business are those of the firm. They are legally binding on the other partners unless a third party is actually aware of the specific absence of authority in the […]
Obligation to Account There is no specific obligation in the Partnership legislation which requires partners to keep accounts. Partner are in practice obliged to keep accounts for recording and taxation purposes. Partners must render a true account to each other and give each other full and true information concerning all partnership activities. This requires, in effect that accounts, in the […]
Meaning of Goodwill Goodwill is commonly an important partnership asset. It is usually earned over time in the course of the business and represents the propensity of customers to return to deal with the firm. The value of goodwill is represented by the difference between the total value of the component assets and the total value of the business as a going […]
Rights and Duties The rights and the obligations of the partners to each other are determined by the terms of the partnership agreement, if and to the extent that there is one. There may be a written or verbal agreement or an agreement by conduct. The Partnership Act sets out rules and presumptions which apply in the absence of an agreement to […]
Personal Liability Each partner is liable personally for the debts and obligations of the partnership. Irrespective of the partners’ profit and liabilities sharing ratios, each is ultimately liable to third parties for all partnership debts and obligations. Ultimately, each partner has potentially unlimited liability for the firm’s obligations. Partnership liabilities are payable primarily, from partnership assets. The partnership assets are available to meet […]
Partnerships and Insolvency Partnerships constitute an important mechanism for undertaking business. In certain sectors, such as the legal profession, a business may not be incorporated as a company and must practice as sole traders or partnerships. A partnership will arise automatically, where persons undertake business in common. A partnership is not a separate legal entity. Ultimately, the partners are fully […]
Partnership Assets A partnership is not a separate entity and is simply the aggregate of its members. The interest of an individual partner in the partnership assets is a chose in action. It is a “bundle of rights” which derive from the partnership agreement or the default Partnership Act provisions, which is enforceable between the partners, ultimately, by legal action. […]
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 […]
Court Winding Up A partner may apply to the court to have the affairs of the partnership wound up. Unlike the position with a company, the creditors do not have the right to apply to the court to have the partnership wound up under the Partnership Act. Creditors may apply under the Companies Act to have the partnership wound up […]
Partners’ Interest I Partnership property is not directly owned by the partners. It is available primarily to satisfy partnership debts. A partner who uses partnership property for his own purposes must account to the partnership for the free use of the property. This follows from partner’s duties and obligations of utmost good faith. On a winding, up, partnership property must be […]
Termination Dissolution refers to the termination of the partnership which may be, but may not necessarily be, followed by the winding up of its assets and liabilities. A technical dissolution, without a winding up, may occur on a change in the membership of the partnership. Upon a technical dissolution, the partnership may continue with new or with the continuing partners. The outgoing partner […]
Assignability I The Partnership Act provides that a person may not become a partner without the consent of all other partners.A partnerships agreement may make other provision. For example, it might allow for the admission of a partner with the approval of the majority. A partner may assign his interest in the partnership. However, the assignee cannot be in any […]