Notes: Company Law Fundamentals
Key:
Legislation
Cases
Resources
1. The sole trader contract in their own name and have personal liability for all the
debts of the business. If a business goes badly the sole trader can be liable for the
business debts. There is no need for a formal organisational structure.
• The hypothetical sole trader is considering a partnership to expand his business. The
Partnership Act 1890, s 1 defines a partnership as a relationship between persons
carrying on a business in common with a view of profit. A partnership can be formed
by oral agreement, it can be inferred by conduct, or it can be a formal written
agreement specifying the terms and conditions of the partnership. There is no formal
process of becoming partners.
See Caselaw and Legislation:
The Partnership Act 1890, s 1 "‘the relationship which subsists between persons carrying on
a business in common with a view of profit"
See Khan v Miah (2000) - 50% of the profits were to be shared by the first three persons and
the remaining 50% was to be received by the 5th partner. Before the new restaurant opened, a
disagreement arose between the partners after money had been spent on fitting out the new
restaurant.
Partnership
• A partnership which does not expressly exclude the Partnership Act 1890 will be
governed by it.
• The Act of a partnership is complex and often needs to be drafted by those who are
aware they are entering such an association.
• each partner is entitled to: participate in management, an equal share of profit, an
indemnity in respect of liabilities assumed in the course of the partnership business,
Key:
Legislation
Cases
Resources
1. The sole trader contract in their own name and have personal liability for all the
debts of the business. If a business goes badly the sole trader can be liable for the
business debts. There is no need for a formal organisational structure.
• The hypothetical sole trader is considering a partnership to expand his business. The
Partnership Act 1890, s 1 defines a partnership as a relationship between persons
carrying on a business in common with a view of profit. A partnership can be formed
by oral agreement, it can be inferred by conduct, or it can be a formal written
agreement specifying the terms and conditions of the partnership. There is no formal
process of becoming partners.
See Caselaw and Legislation:
The Partnership Act 1890, s 1 "‘the relationship which subsists between persons carrying on
a business in common with a view of profit"
See Khan v Miah (2000) - 50% of the profits were to be shared by the first three persons and
the remaining 50% was to be received by the 5th partner. Before the new restaurant opened, a
disagreement arose between the partners after money had been spent on fitting out the new
restaurant.
Partnership
• A partnership which does not expressly exclude the Partnership Act 1890 will be
governed by it.
• The Act of a partnership is complex and often needs to be drafted by those who are
aware they are entering such an association.
• each partner is entitled to: participate in management, an equal share of profit, an
indemnity in respect of liabilities assumed in the course of the partnership business,
