[go: up one dir, main page]
Scribd
Upload
60 views23 pages

PARTNERSHIP

This lecture discusses partnerships under Malaysian law. Key points covered include the definition of a partnership, elements that constitute a partnership, types of partners, liabilities of partners to each other and third parties, and ways a partnership can be terminated. The lecture defines a partnership as the relation between persons carrying on business in common with a view of profit. It outlines circumstances that do not prima facie indicate a partnership and explains rules for determining the existence of a partnership.

Uploaded by

evierolando
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
60 views23 pages

PARTNERSHIP

This lecture discusses partnerships under Malaysian law. Key points covered include the definition of a partnership, elements that constitute a partnership, types of partners, liabilities of partners to each other and third parties, and ways a partnership can be terminated. The lecture defines a partnership as the relation between persons carrying on business in common with a view of profit. It outlines circumstances that do not prima facie indicate a partnership and explains rules for determining the existence of a partnership.

Uploaded by

evierolando
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 23

Lecture 2

PARTNERSHIP
Learning Outcomes
At the end of this lecture, students should
able to:

• Discuss the formation of a partnership.


• Explain liabilities of a partner inter se
and against third parties.
• Describe types of partner.
• Discuss ways of termination for a
partnership.
Topic Outline

Not
Definition Elements
partnership

Partners and Partners Types of


3rd parties inter se partner

Capacity Illegality Dissolution


Introduction

Success

Trust

Understanding
Definition

Section 3(1)

• The RELATION which subsists between


PERSONS carrying on business IN COMMON
with a view of PROFIT.

Section 3(2)

• Clubs, societies, building association is NOT


partnership.
Elements

More than Business in


one common

Business
for profit
Nature

•NOT a separate legal


Legal status entity.

•2-20 partners EXCEPT


Number for professional
partnership.

Management •Partners responsibility.


Alagappa Chettiar v Coliseum
Café
• The Coliseum Café and Hotel
is NOT A LEGAL PERSONA.
• When an action is brought
against the firm name, it is in
fact AN ACTION AGAINST
ALL THE PARTNERS.
Rules for Determining the Existence
of a Partnership
Section 4
Circumstances not prima facie a
partnership

Sec. 4(a) Sec. 4(b)


Sec. 4(c)
Joint Sharing of gross
Sharing of profits
ownership/tenancy returns
Section 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.

Davis v Davis
Sec. 4(b) – Sharing of Gross Returns

•Gross returns
•Profit

Cox v Coulson
Sec. 4(c) – Sharing of Profit

General • Prima facie


rule a partner

• Sec. 4(c)(i)
Exceptions to (v)
Sec. 4(c)(i) •Badely v
Payment of debt Consolidated
by installment Bank.

Sec. 4(c)(ii) •Chua Ka Seng v


Boonchai
Remuneration Sompolpong.

Sec. 4(c)(iii) •IRC v Lebus's


Annuity Trustee.

Sec. 4(c)(iv)
Payment of loan •Re Young ex parte
or interest out of Jones.
loan

Sec. 4(c)(v)
•Pratt v Strick.
Sale of goodwill
rd
Relationship of Partners and 3
Parties
Sec. 7 – All acts done by a partner bind
another

Conditions

Purpose of the Firm’s ordinary Done by the


business of the course of partner as a
partnership business partner
Purpose of the partnership
•Chan Kin Yue v Lee & Wong

In the firm ordinary course of


business
•Merchantile Credit v Garrod

Done by the partner as a partner


•Re Briggs & Co Ex parte Wright
Liability of Partners

•Contractual – sec. 11.


•Tortious – sec. 12.
•Criminal – not jointly liable.
•Holding out – not authorised.
Incoming
partner – sec.
19(1).

Retiring
partner – sec.
19(2) and (3).
Types of Partner

Active Dormant

Quasi Salaried
Capacity of Partner

Minor

Sound
mind
Illegal Partnership

•Illegal purposes
•Exceed number of partners
Effect of Illegality

No rights

3rd party can sue


Dissolution.

Court’s intervention. Without Court’s intervention.

Section 34. Section 35. Section 36.

Fixed Single Notice. Death. Bankrupt. Charge. Illegality.


term. adventure.

Section 37.

Lunatic. Permanently Guilty. Breach of Loss. Just and


incapable. partnership. equitable.
Summary
• The advantage of setting up a business in
partnership is the higher volume of capital
than sole trader.

• Less procedure is required to set up a


partnership firm than company.

You might also like