• Part 3: Part 3: Provisions Relating to Partnerships in General

    • Article 13 - The carrying on of the Partnership Business

      (1) The Partners carry on the Partnership Business.
      (2) The Partners are agents of each other for the purpose of the Partnership Business.
      (3) It is a Default Rule that a change in the nature of the Partnership Business (whether or not it involves a change in the Partnership Agreement) requires the agreement of all the Partners.

    • Article 14 - Overriding duty of good faith

      (1) A Partner must act in good faith towards:
      (A) the Partnership; and
      (B) each of the other Partners, in relation to any matter affecting the Partnership.
      (2) In particular, a Partner must:
      (A) keep each of the other Partners fully informed of Partnership matters;
      (B) account to the Partnership for any Secret Profit; and
      (C) account to the Partnership for any Profits of a competing Business.
      (3) The mutual rights and duties of the Partners, and the mutual rights and duties of the Partnership and the Partners, (whether arising under these Regulations or the Partnership Agreement) are subject to the duty imposed by subsection (1)

    • Article 15 - Duties of disclosure on forming or joining Partnership

      (1) If two or more persons are about to form a Partnership, each prospective Partner must disclose to the other prospective Partners anything known to him which a prudent prospective Partner would reasonably expect to be disclosed in order to decide whether or not to form the Partnership.
      (2) Subsections (3) and (4) apply if a person ("the prospective Partner") is about to become a Partner in an existing Partnership.
      (3) The Partners must disclose to the prospective Partner anything known to them which a prudent prospective Partner would reasonably expect to be disclosed in order to decide whether or not to become a Partner.
      (4) The prospective Partner must disclose to the Partners anything known to him which prudent Partners would reasonably expect to be disclosed in order to decide whether or not to admit him as a Partner.
      (5) The duties under this Article may be waived (in whole or in part) by agreement between the prospective Partners (or between the prospective Partner and the Partners).
      (6) For the purposes of this Article, anything which a person reasonably ought to know is to be treated as known to him.

    • Article 16 - Partner's share of Profits and Losses

      (1) This Article contains a Default Rule.
      (2) The Partners are entitled to share any Partnership Profits, and are liable to bear any Partnership Losses, in equal proportions.

    • Article 17 - Remuneration, expenses, personal liabilities etc

      (1) This Article contains Default Rules.
      (2) A Partner is not entitled to remuneration from the Partnership for acting in the Partnership Business.
      (3) But a Partner is entitled to be indemnified by the Partnership in respect of a payment made by him:
      (A) in the proper conduct of the Partnership Business or in connection with anything necessarily done for the preservation of the Partnership Business or Property; or
      (B) to discharge the whole or a part of his personal liability for a Partnership Obligation or in reasonable settlement of an alleged personal liability for a Partnership Obligation.
      (4) The indemnity does not affect any claim which another Partner may have against the Partner.
      (5) If the Partnership wrongly fails to pay to a Partner any amount for which it is liable to account to him, he is entitled to contribution from the other Partners in the same proportions as if the amount were a Partnership Loss.

    • Article 18 - Capital contribution etc. by Partner

      (1) This Article contains Default Rules.
      (2) No Partner is entitled, or may be required, to:
      (A) contribute capital to the Partnership; or
      (B) vary the amount of his capital contribution to the Partnership, unless he and all the other Partners agree.
      (3) If a Partner contributes capital to the Partnership, he is not entitled to interest on it.
      (4) If a Partner makes an advance to the Partnership beyond the amount (if any) of the capital he has agreed to contribute, he is entitled to receive interest from the Partnership at the Prescribed Form from the date of the advance.

    • Article 19 - Management etc, of Partnership Business and affairs

      (1) This Article contains Default Rules.
      (2) A Partner is entitled to take part in the management of the Partnership Business and affairs.
      (3) Differences about ordinary matters connected with the Partnership Business or affairs may be decided by a majority of the Partners.
      (4) But differences about other matters connected with the Partnership Business or affairs must be decided by all the Partners.
      (5) The question whether a Partnership should take legal or arbitral proceedings against, or defend such proceedings brought by, another person (whether or not a Partner) is an ordinary matter.
      (6) The Partnership Agreement cannot be varied under subsection (3).

    • Article 20 - Accounting and Partnership Records

      (1) This Article contains Default Rules.
      (2) A Partner must:
      (A) ensure that proper accounting Records are kept of transactions affecting the Partnership in which he is involved and of which the other Partners would reasonably expect such Records to be kept; and
      (B) ensure that the Records are made available, on request, to the Partnership or any other Partner.
      (3) A Partner must cooperate with any person who is keeping Partnership Records or drawing up Partnership accounts on behalf of the Partnership.

    • Article 21 - Partnership bound by acts of Partners carrying on Business in usual way

      (1) A Partnership is bound by anything done by a Partner for carrying on in the usual way Business of the kind carried on by the Partners.
      (2) But the Partnership is not bound if:
      (A) the Partner has no authority to do the thing on behalf of the Partnership; and
      (B) the person with whom the Partner is dealing:
      (i) has notice that the Partner has no authority, or
      (ii) does not know or believe him to be a Partner in the Partnership.

    • Article 22 - Partnership Property

      (1) Partnership Property must be held and applied by the Partners exclusively for the purposes of the Partnership and in accordance with the Partnership Agreement.

    • Article 23 - Vicarious Liability of Partnership for loss or injury caused by Partner

      (1) A Partnership is liable for loss or injury to another person caused by a Partner's wrongful act or omission if the act or omission:
      (A) occurs in the ordinary course of the Partnership Business; or
      (B) is authorised by the Partnership.

    • Article 24 - Unlimited Liability of Partners

      (1) Each of the Partners in a General Partnership has unlimited liability and is personally liable jointly and severally with the other Partners for the whole amount of any Partnership Obligation incurred while he is a Partner.
      (2) But a Partner ("A") is not personally liable under subsection (1) for a Partnership Obligation owed to a Partner or former Partner ("B") if:
      (A) the Partnership Agreement (including any Default Rules); or
      (B) another agreement to which A and B are parties,
      makes provision about whether or not B is entitled to indemnity or contribution from A in respect of the obligation.
      (3) In these Regulations "Partnership Obligation" includes:
      (A) any Partnership debt; and
      (B) any other liability of the Partnership.
      (4) For the purposes of these Regulations, a Partnership Obligation which results from:
      (A) breach of a duty in tort;
      (B) breach of trust; or
      (C) breach of a fiduciary duty,
      is to be treated as having been incurred at the time of the act or omission that gave rise to the breach.

    • Article 25 - Partner's secondary Liability: supplementary

      (1) The periods of limitation and prescription applicable to a Partner's personal liability for Partnership Obligations are as for any other debt owed by the Partner incurred on the date when the personal liability was incurred.

    • Article 26 - Non-Partners who are liable by "holding out"

      (1) If
      (A) a person {"A") who is not a Partner in a Partnership represents himself, or knowingly allows himself to be represented, as a Partner; and
      (B) a person ("B") deals with the Partnership in reliance on the representation,
      A is personally liable for the whole amount of any Partnership Obligation incurred by B as a result.
      (2) Subsection (1) also applies if A:
      (A) is a Partner at the time the representation is made or communicated to B; but
      (B) is no longer a Partner at the time B deals with the Partnership in reliance on the representation.
      (3) Subsection (1) applies:
      (A) even if A does not know that the representation has been made or communicated to B in particular; and
      (B) whether the representation is made or communicated in writing, by conduct or otherwise.
      (4) Article 24(2) applies in relation to A's personal liability under subsection (1) as if it were a personal liability of a Partner under Article 24(1).
      (5) A is entitled to be indemnified by the Partnership in respect of a payment made by him to discharge the whole or a part of his personal liability under subsection (1) for a Partnership Obligation or in reasonable settlement of an alleged personal liability of his under subsection (1).
      (6) The indemnity does not affect any claim which a Partner may have against A.
      (7) This Article is subject to Article 28.

    • Article 27 - Liability of former Partner for obligations incurred while a Partner

      (1) A person who ceases to be a Partner does not by doing so cease to be personally liable under Article 24(1) for Partnership Obligations incurred while he was a Partner.
      (2) Article 24(2) applies to a former Partner as it applies to a Partner.
      (3) An agreement between a former Partner, the Partnership and a creditor to discharge the former Partner from his personal liability for a Partnership Obligation does not require valuable consideration.

    • Article 28 - Restrictions on Liability of former Partners or employees by "holding out"

      (1) This Article limits the circumstances in which a person ("A") who has ceased to be a Partner in a Partnership may be held personally liable under Article 26(1) for a Partnership Obligation incurred by a person ("B") who dealt with the Partnership in reliance on a representation made while A was a Partner.
      (2) A is not liable if the representation was made or communicated to B:
      (A) while A was still a Partner, but
      (B) more than one year before B dealt with the Partnership in reliance on it.
      (3) A is not liable if:
      (A) the representation was made or communicated to B while A was still a Partner; and
      (B) before B dealt with the Partnership in reliance on the representation, notice that A was ceasing, or had ceased, to be a Partner was given to B (or sent to B's last known Address).
      (4) A is not liable if the representation consists merely in:
      (A) the Partnership Business continuing to be carried on in the same Partnership Name; or
      (B) the Partnership Name continuing to include A's Name, after A has ceased to be a Partner.
      (5) In this Article, references to a Partner in a Partnership include an employee of the Partnership.

    • Article 29 - Disclosure of Names and Addresses of Partners

      (1) A person dealing with a Partnership is entitled, on request to the Partnership or a Partner, to be informed of:
      (A) the full Name of each Partner; and
      (B) an Address for service of each Partner.
      (2) A person who has a complaint against a Partnership connected with dealings he has had with the Partnership is entitled, on request to the Partnership, a Partner or a former Partner, to be given such information as the person requested is reasonably able to provide (or to obtain) as to:
      (A) the full Name of each person who was a Partner at the time of the act or omission to which the complaint relates; and
      (B) an Address for service, or the last known Address, of each such person.
      (3) The Tribunal may make provision enabling a person who is considering:
      (A) making a claim against a Partnership; or
      (B) making a claim against a Partner or former Partner in respect of a Partnership Obligation, to apply to the Tribunal, before bringing proceedings in respect of the claim, for an order for the disclosure of the information mentioned in subsection (1) or (2).
      (4) This Article does not apply in relation to a Limited Partner or former Limited Partner of a Limited Partnership that is a Collective Investment Fund registered by the Regulatory Authority.

    • Article 30 - Position of assignees etc. of Partner's share

      (1) This Article applies if the whole or a part of the share in a Partnership of a Partner ("A") is assigned (whether voluntarily or as a result of death, insolvency or otherwise) to another person ("B").
      (2) B may not:
      (A) take part in the management or administration of the Partnership Business or affairs; or
      (B) inspect any Partnership Records.
      (3) But that does not affect any of B's rights to receive amounts in respect of the whole (or part) of:
      (A) A's share in the Partnership Profits; or
      (B) A's entitlement on ceasing to be a Partner or on the winding up of the Partnership.
      (4) Nothing in this Article prevents a person to whom a Partner has assigned the whole of his share absolutely from becoming a Partner in place of the assignor if:
      (A) all the Partners agree to the substitution; or
      (B) the substitution is made in accordance with the Partnership Agreement.

    • Article 31 - Events which break up a Partnership

      (1) Subject to any agreement between the Partners, a Partnership breaks up if:
      (A) in the case of a Partnership of defined duration:
      (i) the specified period expires; or
      (ii) the venture is accomplished; or
      (B) in the case of any other Partnership, a Partner gives notice to the other Partners of his intention to break up the Partnership.
      (2) Subject to any agreement between the Partners, a Partnership breaks up if a Partner dies or (if not an individual) is dissolved.
      (3) A Partnership breaks up if an order under Article 89 has effect in relation to it.

    • Article 32 - Effects of break up

      (1) Once a Partnership breaks up, the Partnership Business may be carried on only in so far as permitted under Article 93.

    • Article 33 - Publicity for departure of Partner or break up of Partnership

      (1) If a person ceases to be a Partner in a Partnership, he or any Partner:
      (A) is entitled to publish notice of the fact; and
      (B) may require the Partnership or any other Partner to give any Necessary Consent for such purpose.
      (2) If a Partnership breaks up, any Partner or any person who ceased to be a Partner on or after the break up:
      (A) is entitled to publish notice of the break up; and
      (B) may require the Partnership or any other Partner to give any Necessary Consent for such purpose.
      (3) This Article does not apply in relation to a Limited Partner or former Limited Partner of a Limited Partnership that is a Collective Investment Fund registered by the Regulatory Authority.

    • Article 34 - Winding up by Partners

      (1) if a Partnership breaks up, it may be wound up under this Article by one or more of the Partners.
      (2) Subsection (3) applies if, after the break up, there are two or more Partners.
      (3) The Partnership Business may be carried on:
      (A) if the Partners agree that it should be carried on; and
      (B) so far as is necessary for the beneficial winding up of the Partnership.
      (4) Otherwise, the authority of a Partner to bind the Partnership continues so far as is necessary to:
      (A) wind up the Partnership; and
      (B) complete any transactions begun but unfinished at the time of the break up.
      (5) It is a Default Rule that differences about other matters connected with the winding up of the Partnership under this Article may be decided by a majority of the Partners.
      (6) An agreement under subsection (3) may confer authority on one or more of the Partners for the purpose of carrying on the Partnership Business in accordance with that subsection.

    • Article 35 - Distribution of Partnership's assets on winding up

      (1) This Article contains Default Rules about:
      (A) the way in which a Partnership's assets must be dealt with after its break up; and
      (B) the settlement of accounts between the Partners.
      (2) In this Article "Partner" includes a person who ceased to be a Partner on or after the break up.
      (3) The Partnership's assets must be dealt with as follows:

      Step 1

      Each Partner must pay to the Partnership any amount which he owes to it.

      Step 2

      The Partnership must pay its debts and discharge its Liabilities to persons other than Partners.

      If the Partnership does not have sufficient assets to do this in full, the Partners must contribute amounts, in the same proportions as they would be liable to bear any Partnership Losses, in order to make up the shortfall.

      Step 3

      The Partnership must pay to each Partner any amount (other than in respect of capital) which it owes to him.

      If the Partnership does not have sufficient assets to do this in full, the Partners must contribute amounts, in the same proportions as they would be liable to bear any Partnership Losses, in order to make up the shortfall.

      Step 4

      The Partnership must pay to each Partner any amount which it owes to him in respect of capital.

      If the Partnership does not have sufficient assets to do this in full, it must pay the remaining assets to the Partners in proportion to their respective capital contributions.

      Step 5

      The Partnership must distribute any surplus among the Partners in the same proportions as they would be entitled to share any Partnership Profits.
      (4) If a Partner is unable, as a result of his insolvency, to contribute an amount required under Step 2 or 3, the other Partners must contribute that amount according to the proportions in which they are liable (as between themselves only) to contribute under that Step.

    • Article 36 - Optional Registration of a General Partnership

      (1) A General Partnership may register with the CRO, in which case Parts 5 to 7 of these Regulations will apply mutatis mutandis to the registration process and consequential rights and duties of the registered General Partnership.