Chapter 2: Law of Partnership

1. Elements

1.1. more than one

1.2. business in common

1.3. business for profit

2. Capacity of Partner

2.1. two criteria: - x minor - must have a sound mind

3. Dissolution

3.1. Court's Intervention Sec. 37. - lunatic - permanently incapable - guilty - breach pf partnership - loss - just and equitable

3.2. No Court's Intervention Sec. 36 ILLEGALITY Sec. 35 - DEATH - BANKRUPT - CHARGE Sec. 34 - FIXED TERM - SINGLE ADVENTURE - NOTICE

4. Types of Partner

4.1. - active - quasi - dormant - salaried

5. Rules for Determining the Existence of a Partnership

5.1. Section 4 Circumstances not prima facie a partnership

5.2. Sec. 4(a) Joint ownership/tenancy - Joint ownership of the property whereby a person GET PROFIT FROM THE USE OF PROPERTY does not necessarily means that there is partnership. Case Law: Davis v Davis

5.3. Sec. 4(b) Sharing of gross returns Gross Returns/Profit - Events during Raya - not necessarily partners - not the same marketing strategies Case Law: Cox v Coulson

5.4. Sec. 4(c) – Sharing of Profit General rule: prima facie a partner

5.4.1. Exceptions: Sec. 4(c)(i) Payment of debt by installment Case law: Badely v Consolidated Bank Sec. 4(c)(ii) Remuneration Case law: Chua Ka Seng v Boonchai Sompolpong Sec. 4(c)(iii) Annuity Case law: IRC v Lebus's Trustee Sec. 4(c)(iv) Payment of loan or interest out of loan Case law: Re Young ex parte Jones Sec. 4(c)(v) Sale of goodwill Case law: Pratt v Strick

6. Definition

6.1. WHAT IS A PARTNERSHIP? The RELATION which subsists between PERSONS carrying on business IN COMMON with a view of PROFIT Section 3(1) WHAT IS NOT A PARTNERSHIP? Clubs, societies, building association is NOT partnership Section 3(2)

6.2. Governed under Partnership Act, 1961

7. Illegality

7.1. Illegal purposes Exceed number of partners

7.2. Effect: No rights = 3rd party can sue

8. Nature

8.1. Legal Status: NOT A SEPARATE LEGAL ENTITY Number: 2-20 GENERAL PARTNERSHIP 2-200 PROFESSIONAL PARTNERSHIP (M-E-A-L) medical engineering architecture/accountancy legal Management: PARTNER'S RESPONSIBILITY

9. Relationship of Partners and 3rd Parties

9.1. Sec. 7 All acts done by a partner bind another

9.2. Conditions - Purpose of the business of the partnership - Firm’s ordinary course of business - Done by the partner as a partner

9.3. Purpose of the partnership Case law: Chan Kin Yue v Lee & Wong In the firm ordinary course of business Case law: Merchantile Credit v Garrod Done by the partner as a partner Case law: Re Briggs & Co Ex parte Wright

10. Liability of Partners

10.1. 4 TYPES Section 11 Contractual - listed in the agreement - breach of contract Section 12 Tortious - tort law - derived from English law - standardised benchmark Criminal liability - not a joint liability - etc fraud/embezzlement - unless conspiracy Holding Out - not authorised to hold information