United Kingdom partnership law
Encyclopedia
United Kingdom partnership law refers to the rules under which partnership
s are governed in the United Kingdom
. Partnerships are a form of business association, which arises automatically when people carry on business with a view to a profit. (Partnership Act 1890
s 1). Partners are jointly and severally liable, just as they own the property in common. A limited partnership, under the Limited Partnerships Act 1907 may have sleeping partners, who if they do not partake in any business management will not be liable beyond their investments (s 6). A ‘partnership’ under the Limited Liability Partnerships Act 2000
is now considered a separate legal person (s 11) with limited liability (ss 1 and 14), though it is treated as a partnership for tax, and is not subject to so much regulation as would be a company. There must, however, be at least two partners.
institution of a societas universorum quae ex quaestu veniunt, or a trade partnership.
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
s are governed in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. Partnerships are a form of business association, which arises automatically when people carry on business with a view to a profit. (Partnership Act 1890
Partnership Act 1890
The Partnership Act 1890 is a Act of the Parliament of the United Kingdom, which governs the rights and duties of people who carry on business in common with a view to profit.-Main provisions:...
s 1). Partners are jointly and severally liable, just as they own the property in common. A limited partnership, under the Limited Partnerships Act 1907 may have sleeping partners, who if they do not partake in any business management will not be liable beyond their investments (s 6). A ‘partnership’ under the Limited Liability Partnerships Act 2000
Limited Liability Partnerships Act 2000
The Limited Liability Partnerships Act 2000 is an Act of the Parliament of the United Kingdom which introduced the concept of the limited liability partnership into English and Scots law...
is now considered a separate legal person (s 11) with limited liability (ss 1 and 14), though it is treated as a partnership for tax, and is not subject to so much regulation as would be a company. There must, however, be at least two partners.
Common law
Partnerships were a common law phenomenon, dating back to the Roman lawRoman law
Roman law is the legal system of ancient Rome, and the legal developments which occurred before the 7th century AD — when the Roman–Byzantine state adopted Greek as the language of government. The development of Roman law comprises more than a thousand years of jurisprudence — from the Twelve...
institution of a societas universorum quae ex quaestu veniunt, or a trade partnership.
- Waugh v Carver (1793) 126 ER 525, 2 HBI 235, held that receipt of profits of partnership made the recipient a partner. Mr JG Phillimore later opined that this was 'one indeed of the most absurd decisions ever come to by a court of law'.
Partnership Act 1890
Section one of the 1890 Act states ‘the relationship which subsists between persons carrying on a business in common with a view of profit.’ This can come about by oral agreement, written document or conduct. The minimum membership is two and the maximum since 2002 is unlimited. Unless a partnership expressly excludes the Act it applies. Each partner is entitled to participate in management, get an equal share of profit, an indemnity in respect of liabilities assumed in the course of business and the right to not be expelled by other partners. A partnership ends on the death of a partner. A partner is jointly and severally liable for others debts, so there is no limited liability, unless under…Limited Partnership Act 1907
Only sleeping partners may have limited liability, and it is not possible to have a partnership made up all of limited partners.Limited Liability Partnerships Act 2000
Under the 2000 Act, such partnerships are deemed to have legal personality. It allows limited liability for general trading debts, but individual partners cannot limit personal liability for negligence. It was introduced to allow some protection against large negligence actions, where the risks were felt to be excessive.See also
- United Kingdom company lawUnited Kingdom company lawUnited Kingdom company law is the body of rules that concern corporations formed under the Companies Act 2006. Also regulated by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal vehicle to organise and run business...
- Limited Partnerships in England and Wales
- Limited Liability Partnerships Act 2000Limited Liability Partnerships Act 2000The Limited Liability Partnerships Act 2000 is an Act of the Parliament of the United Kingdom which introduced the concept of the limited liability partnership into English and Scots law...
- Limited Liability Partnerships Act (Northern Ireland) 2002Limited Liability Partnerships Act (Northern Ireland) 2002The Limited Liability Partnerships Act 2002 is an Act of the Northern Ireland Assembly which introduced the concept of the limited liability partnership into Northern Irish law, passed two years after the Limited Liability Partnerships Act 2000 introduced the concept into the law of England and...