Two or more people involved in the ownership and control of a business. This form of organization is governed by the Partnership Act 1890. The relationship between partners and their individual rights and duties are governed by the agreement that they draw up. In the absence of an agreement all partners are equal as regards profits and losses: each partner may act on behalf of the firm and bind the firm, providing that he is acting within his apparent authority, and each partner must indemnify every other partner doing so. (This obviously does not apply to matters outside the normal business of the firm.) A partner is not entitled to interest on his capital nor to remuneration (in addition to his share nor to remuneration (in addition to his share in the management and differences are decided by a majority. No changes may be made in the nature of the partnership without the consent of all the existing partners. A partnership contract is a contract uberrimaie fide partners must account for private profit and must not compete with the firm. Subject to agreement, partnership is automatically dissolved on the death or bankruptcy of any partner.
Partnership may be construed where it does not officially exist, when persons act together so as to give an impression that they are in partnership.
|Reference: The Penguin Business Dictionary , 3rd edt.|