RECOGNISE AND ADVISE ON THE EXISTENCE OF A PARTNERSHIP, AND THE TERMS THAT
REGULATE THE RUNNING OF THE PARTNERSHIP BUSINESS.
DEFINITION – Two or more persons agree; Carry out a business in common and with a
view to profit.
No formalities are required to start a partnership. A formal agreement does not need to
exist, however, it is good practice for a Partnership Agreement to be drafted.
CHARACTERISTING OF A PARTNERSHIP
- Share the right to take part in decision making
- Share the ownership of the assets of the business
- Share the profits and losses of the business – if one does not pay his debt, the
others must pay for him.
ADVANTAGES
- Very easy to form
- Freedom to run as owners see fit
- Support of joint decision-making
- All profits belong to partners.
DISADVANTAGES
- Unlimited liability for business debts
- Decision making can be cumbersome
- Lack of written agreement can lead to uncertainty
- Last status of incorporated forms of business.
CHARACTERISTICS OF A LIMITED PARTNERSHIP
- Established under the Limited Partnership Act 1907.
- Must be at least one general partner who has unlimited liability for all the debts of
the partnership.
- LP is permitted to have a limited partner, whose liability is limited to his
investment.
- Limited liability is conditional upon; (a) not controlling or managing the LP; (b) not
having the power to take binding decisions on behalf of the LP; (c) not removing
his contribution to the LP for as long as it’s in business.
- Must be registered with the Registrar of Companies – acc with s8 of LPA 1907.
, CHARACTERISTICS OF A LIMITED LIABILITY PARTNERSHIP
- Formed under Limited Liability Partnership Act 2000.
- Has a separate legal personality distinct from its owners like a company, and offers
its owners protection from liability of a limited company.
- Run with the informality and flexibility of a partnership.
- Cannot be set up by individual or non-profit organisation.
- Formed by filing series of documents with the Registrar of Companies.
ADVANTAGES
- Limited liability for business debts.
- Freedom to run as owners sees fit.
- Support of joint decision-making.
DISADVANTAGES
- Must register to set up.
- Information made public.
- Some extra formality and costs to run.
KEY PROVISIONS OF THE PA 1980, EXPLAINING THE EXISTENCE AND DURATION OF A
PARTNERSHIP, PROFIT SHARING, DECISION-MAKING, RETIREMENT, EXPULSION AND
DISSOLUTION.
PARTNERSHIP ACT
What is the duration of the partnership? SECTION 32
What share of profits is a partner entitled SECTION 24(1)
to? Income; Capital?
How are decisions made in relation to; SECTION 24(8) – NATURE
- Changing the nature of the SECTION 24(7) – NEW PARTNER
partnership; SECTION 24(8) – DAY TO DAY DECISIONS.
- A new partner joining;
- Changing the terms of the
partnership and;
- Other day-to-day decisions?
How much time must be devoted to the SECTION 24(5)
business?
What happens if a partner; SECTION 33 – DEATH OR BANKRUPTCY
- Wants to leave; SECTION 32 – EXPIRATION OR NOTICE
- Dies; or SECTION 37 – RIGHT TO NOTIFY
- Bankrupt? DISSOLUTION
SECTION 26- RETIREMENT OF PARTNERSHIP
AT WILL
SECTION 17 – LIABILITY OF INCOMING AND
OUTGOING PARTNERS.
What happens if the partners want to expel SECTION 25 – EXPULSION
one of the other partners?
REGULATE THE RUNNING OF THE PARTNERSHIP BUSINESS.
DEFINITION – Two or more persons agree; Carry out a business in common and with a
view to profit.
No formalities are required to start a partnership. A formal agreement does not need to
exist, however, it is good practice for a Partnership Agreement to be drafted.
CHARACTERISTING OF A PARTNERSHIP
- Share the right to take part in decision making
- Share the ownership of the assets of the business
- Share the profits and losses of the business – if one does not pay his debt, the
others must pay for him.
ADVANTAGES
- Very easy to form
- Freedom to run as owners see fit
- Support of joint decision-making
- All profits belong to partners.
DISADVANTAGES
- Unlimited liability for business debts
- Decision making can be cumbersome
- Lack of written agreement can lead to uncertainty
- Last status of incorporated forms of business.
CHARACTERISTICS OF A LIMITED PARTNERSHIP
- Established under the Limited Partnership Act 1907.
- Must be at least one general partner who has unlimited liability for all the debts of
the partnership.
- LP is permitted to have a limited partner, whose liability is limited to his
investment.
- Limited liability is conditional upon; (a) not controlling or managing the LP; (b) not
having the power to take binding decisions on behalf of the LP; (c) not removing
his contribution to the LP for as long as it’s in business.
- Must be registered with the Registrar of Companies – acc with s8 of LPA 1907.
, CHARACTERISTICS OF A LIMITED LIABILITY PARTNERSHIP
- Formed under Limited Liability Partnership Act 2000.
- Has a separate legal personality distinct from its owners like a company, and offers
its owners protection from liability of a limited company.
- Run with the informality and flexibility of a partnership.
- Cannot be set up by individual or non-profit organisation.
- Formed by filing series of documents with the Registrar of Companies.
ADVANTAGES
- Limited liability for business debts.
- Freedom to run as owners sees fit.
- Support of joint decision-making.
DISADVANTAGES
- Must register to set up.
- Information made public.
- Some extra formality and costs to run.
KEY PROVISIONS OF THE PA 1980, EXPLAINING THE EXISTENCE AND DURATION OF A
PARTNERSHIP, PROFIT SHARING, DECISION-MAKING, RETIREMENT, EXPULSION AND
DISSOLUTION.
PARTNERSHIP ACT
What is the duration of the partnership? SECTION 32
What share of profits is a partner entitled SECTION 24(1)
to? Income; Capital?
How are decisions made in relation to; SECTION 24(8) – NATURE
- Changing the nature of the SECTION 24(7) – NEW PARTNER
partnership; SECTION 24(8) – DAY TO DAY DECISIONS.
- A new partner joining;
- Changing the terms of the
partnership and;
- Other day-to-day decisions?
How much time must be devoted to the SECTION 24(5)
business?
What happens if a partner; SECTION 33 – DEATH OR BANKRUPTCY
- Wants to leave; SECTION 32 – EXPIRATION OR NOTICE
- Dies; or SECTION 37 – RIGHT TO NOTIFY
- Bankrupt? DISSOLUTION
SECTION 26- RETIREMENT OF PARTNERSHIP
AT WILL
SECTION 17 – LIABILITY OF INCOMING AND
OUTGOING PARTNERS.
What happens if the partners want to expel SECTION 25 – EXPULSION
one of the other partners?
