A general partnership, the basic form of
A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, alliance. This relationship may be a contractual, exclus ...
In law, common law (also known as judicial precedent or judge-made law, or case law
Case law is the collection of past legal decisions written by courts and similar tribunal
A tribunal, generally, is any person or institution with authority ...
, is in most countries an association of persons or an unincorporated company with the following major features:
*Must be created by agreement, proof of existence and
Estoppel is a judicial device in common law legal systems whereby a court
A court is any person or institution, often as a government institution, with the authority to Adjudication, adjudicate legal disputes between Party (law), parties and ...
*Formed by two or more persons
*The owners are jointly and severally
Law is a system
A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole.
A system, surrounded and influenced by its environment, is described by ...
for any legal actions and
Debt is an obligation that requires one party, the debtor
A debtor or debitor is a legal entity (legal person) that owes a debt
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to ...
s the company may face, unless otherwise provided by law or in the agreement.
It is a partnership in which partners share equally in both responsibility and liability.
Partnerships have certain default characteristics relating to both (a) the relationship between the individual partners and (b) the relationship between the partnership and the outside world. The former can generally be overridden by express agreement between the partners. Whilst the latter is in general hardly varied, a careful draft would oust certain kinds of third party liability. A clause can contain that only the negligent partners can be sued and it is the wrongdoers that pay damages to victims only.
Subject to contrary agreement, the assets of the business are owned on behalf of all partners, and they are each personally liable, jointly and severally
, for business debts, taxes or
A tort, in common law
In law, common law (also known as judicial precedent or judge-made law, or ) is the body of law created by judges and similar quasi-judicial by virtue of being stated in written opinions. ' is the most-used legal dict ...
ious liability. For example, if a partnership defaults on a payment to a creditor, the partners' personal assets are subject to attachment and liquidation to pay the creditor.
By default, profits are shared in accordance with the proportion of capital contribution amongst the partners. However, a partnership agreement will almost invariably expressly provide for the manner in which profits and losses are to be shared in accordance with that proportion. Liability, on the other hand, will not be shared equally unless express provisions indicate such possibility.
Each general partner is deemed the
Agent may refer to:
Espionage, investigation, and law
*, spies or intelligence officers
* Law of agency
The law of agency is an area of commercial law
Commercial law, also known as mercantile law or trade law, is the body of law that a ...
of the partnership. Therefore, if that partner is apparently carrying on partnership business, all general partners can be held out as partners for his dealings with third persons.
By default a partnership will terminate upon the death, disability, or even withdrawal of any one partner. However, most partnership agreements provide that in these types of events, (1) the share of the departed partner usually remains in the partnership or is given to an identified successor, and (2) the partnership will be dissolved. It is important to exclude duration on fixed term so that dissolution by notice and s.27 of the Partnership Act never apply.
By default, each general partner has an equal right to participate in the management and control of the business. Disagreements in the ordinary course of partnership business are decided by a majority of the partners, and disagreements of extraordinary matters and amendments to the partnership agreement require the consent of all partners. However, in a partnership of any size the partnership agreement will provide for certain electees to manage the partnership along the lines of a company board.
Unless otherwise provided in the partnership agreement, no one can become a member of the partnership without the consent of all partners, though a partner may assign his share of the profits and losses and right to receive distributions ("transferable interest"). A partner's
Judgement (or US spelling judgment) is also known as ''adjudication
Adjudication is the legal process by which an arbitration, arbiter or judge reviews evidence (law), evidence and argumentation, including legal reasoning set forth by opposing ...
creditor may obtain an order charging the partner's "transferable interest" to satisfy a judgment.
Separate legal personality
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
, section 201 of the Revised Uniform Partnership Act
(RUPA) of 1997 provides that "A partnership is an entity distinct from its partners." This is one of the more significant departures of RUPA from the 1917 Uniform Partnership Act, which does not recognize separate legal personality for partnerships; however, the degree to which this theory was actually respected varied by jurisdiction and over time.
England and Wales
England and Wales () is a legal jurisdiction covering England and Wales, two of the four countries of the United Kingdom, parts of the United Kingdom. England and Wales forms the constitutional successor to the former Kingdom of England and follows ...
, a partnership does not have separate legal personality. Although the English & Welsh
A law commission, law reform commission, or law revision commission is an independent body set up by a government to conduct law reform
Law reform or legal reform is the process of examining existing law
Law is a system
A system is a gr ...
proposed to amend the law to create separate personality for all general partnerships, the British government decided not to implement the proposals relating to general partnerships. The ''
Limited Liability Partnerships Act 2000
The Limited Liability Partnerships Act 2000 (c.12) is an Act of Parliament, Act of the Parliament of the United Kingdom which introduced the concept of the limited liability partnership into English and Scots law. It created an LLP as a body with J ...
'' confers separate personality on limited liability partnerships—separating them almost entirely from general partnerships and limited partnerships, despite the naming similarities. In
Scotland ( sco, Scotland, gd, Alba
Alba (Scottish Gaelic
Scottish Gaelic ( gd, Gàidhlig or Scots Gaelic, sometimes referred to simply as Gaelic) is a Goidelic language (in the Celtic languages, Celtic branch of the Indo-European ...
partnerships do have some degree of legal personality.
France (), officially the French Republic (french: link=no, République française), is a transcontinental country
This is a list of countries located on more than one continent
A continent is one of several large landmasses ...
Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a landlocked ...
Norway, officially the Kingdom of Norway,Names in the official and recognised languages: Bokmål
Bokmål (, ; literally "book tongue") is an official written standard for the Norwegian language
Norwegian (Norwegian: ''norsk'') is a Nort ...
The Czech Republic, also known by its short-form name Czechia and formerly known as Bohemia, is a landlocked country in Central Europe. It is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to ...
Sweden ( sv, Sverige ), officially the Kingdom of Sweden ( sv, links=no, Konungariket Sverige ), is a Nordic country
The Nordic countries, or the Nordics, are a geographical and cultural region
In geography, regions are areas that ...
also grant some degree of legal personality to business partnerships, other countries such as
Belgium ( nl, België ; french: Belgique ; german: Belgien ), officially the Kingdom of Belgium, is a country in Western Europe
Western Europe is the western region of Europe. The region's countries and territories vary depending on cont ...
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Berlin (; ) is the Capital city, capital and List of cities in Germany by population, largest city of Germany by both area and population. Its 3,769,495 inh ...
Italy ( it, Italia ), officially the Italian Republic ( it, Repubblica Italiana, links=no ), is a country consisting of a peninsula delimited by the Alps
The Alps ; german: Alpen ; it, Alpi ; rm, Alps; sl, Alpe ) are the highest ...
, french: Suisse(sse), it, svizzero/svizzera or , rm, Svizzer/Svizra
, government_type = Federalism, Federal semi-direct democracy under an assembly-independent Directorial system, directorial republic
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Poland, officially the Republic of Poland, is a country located in Central Europe. It is divided into 16 Voivodeships of Poland, administrative provinces, covering an area of , and has a largely Temperate climate, temperate seasonal cli ...
do not allow partnerships to acquire a separate legal personality, but permit partnerships the rights to sue and be sued, to hold property, and to postpone a creditor's
A lawsuit is a proceeding by a party or parties against another in the civil
Civil may refer to:
*Civic virtue, or civility
*Civil action, or lawsuit
*Civil and political rights
against the partners until he or she has exhausted all remedies
against the partnership assets.
In December 2002 the
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proposed to replace their general partnership, which does not have legal personality, with a public partnership which allows the partners to opt for legal personality.
Japan ( ja, 日本, or , and formally ) is an island country
An island country or an island nation is a country
A country is a distinct territory, territorial body
or political entity. It is often referred to as the land of an in ...
ese law provides for Civil Code , which have no legal personality, and Commercial Code which have full corporate personhood but otherwise function similarly to partnerships.
Bangladesh (, bn, বাংলাদেশ, ), officially the People's Republic of Bangladesh, is a country in South Asia
South Asia is the southern region of Asia, which is defined in both geography, geographical and culture, ethno-c ...
, the relevant law for regulating partnership is the Partnership Act 1932.
A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The law does not require written partnership agreement between the partners to form a partnership. A partnership does not also required to be registered, however an unregistered partnership has a number of limitation regarding enforcing its rights in any court.
[ A partnership is considered as a separate legal identity (i.e. separate from its owners) in Bangladesh only if the partnership is registered. There must be a minimum of 2 partners and maximum of 20 partners.]
The two main consequences of allowing separate personality are that one partnership will be able to become a partner in another partnership in the same way that a registered company can, and a partnership will not be bound by the doctrine of '' ultra vires
('beyond the powers') is a Latin phrase
This is a list of Wikipedia articles of Latin phrases and their translation into English.
To view all phrases on a single, lengthy document, see:
* List of Latin phrases (full)
The list also ...'' but will have unlimited legal capacity like any other natural person
Jurisprudence, or legal theory, is the theoretical study of the propriety of law
Law is a system
A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to ....
* Articles of partnership
An investment club is a group of individuals who meet for the purpose of pooling money and investing; members typically meet on a periodic basis to make investment decisions as a group through a voting process and recording of minutes, or gather i ...s
* Types of business entity
Type may refer to:
Science and technology Computing
Typing is the process of writing or inputting text by pressing keys on a typewriter
A typewriter is a or machine for characters. Typically, a typewriter has an array of , a ... (listed by country)
*DeMott, Deborah A. (2001)
“Transatlantic Perspectives on Partnership Law: Risk and Instability”
''Journal of Corporation Law'', 26, 879–895.
Types of business entity
Legal entitiesThis category contains articles related to juristic or natural person
Jurisprudence, or legal theory, is the theoretical study of law. Scholars of jurisprudence seek to explain the nature of law in its most general form and ...