Partnership

Partnership: commonly referred to as a general partnership, occurs where two or more people agree to carry on a business in common with a view of profit (section 1 of the Partnership Act (1890)). This partnership agreement may be oral, in writing or implied by conduct. To form a partnership, no formal steps, such as a registration with a public body, are required. The partners have the option to enter into a written partnership agreement. If they do not wish to do so, several provisions of the Partnership Act (1890) will be implied by default. For example, that partners will share income profit and losses of the partnership equally (s24(1) of the Partnership Act 1890). It is therefore common for partners to enter into a written partnership agreement, disapplying provisions of the Partnership Act (1890), which they do not wish to apply to their partnership. Unlike a limited company, a general partnership does not have a separate legal personality and its partners have unlimited liability for the debts of the partnership. A partnership under the Partnership Act 1890 differs to a Limited Partnership and a Limited Liability Partnership.