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Partnership Act 1908 Public Act Date of assent 1908 No 139 4 August 1908 Contents Title Short Title, etc Interpretation Saving for rules of equity and common law Part 1 The general law relating to partners Nature of partnership Deﬁnition of partnership Rules for determining existence of partnership Rights of person lending or selling in consideration of share of proﬁts in case of bankruptcy Meaning of “ﬁrm” Relations of partners to persons dealing with them Power of partner to bind the ﬁrm Partners bound by acts on behalf of ﬁrm Partner using credit of ﬁrm for private purposes Effect of notice that ﬁrm will not be bound by acts of partner Liability of partners Liability of the ﬁrm for wrongs Misapplication of money received for ﬁrm, etc Joint and several liability Improper employment of trust property for partnership purposes Persons liable by “holding out” Admissions and representations of partners Notice to acting partner to be notice to ﬁrm Liabilities of incoming and outgoing partners Revocation of continuing guaranty by change in ﬁrm Note This Act is administered in the Ministry of Commerce Page 3 3 4 4 4 4 6 6 7 7 7 7 8 8 8 8 9 9 10 10 10 10 1 Partnership Act 1908 Reprinted as at 3 September 2007 Relations of partners to one another Variation by consent of terms of partnership Partnership property Property bought with partnership money Conversion into personal estate of land held as partnership property Procedure against partnership property for partner’s separate judgment debt Rules as to interests and duties of partners Expulsion of partner Retirement from partnership at will Conditions of partnership where term continued over Duty to render accounts, etc Partners to account for private proﬁts Partner not to compete with ﬁrm Rights of assignee of share of partnership Dissolution of partnership and its consequences Dissolution by expiration or notice Dissolution by death, bankruptcy, or charge Dissolution by illegality of partnership Dissolution by the
 Court Rights of persons dealing with ﬁrm against apparent members Right of partners to notify dissolution Continuing authority of partners for purposes of winding up Rights of partners as to application of partnership property Apportionment of premium where partnership prematurely dissolved Rights where partnership dissolved for fraud or misrepresentation Right of outgoing partner to share proﬁts made after dissolution Retiring or deceased partner’s share to be a debt Distribution of assets on ﬁnal settlement of accounts Part 2 Special partnerships Part 1 not to affect special partnerships Special partnerships may be formed, except for banking and insurance General and special partners, and their liabilities Reprinted as at 3 September 2007 Partnership Act 1908 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 Certiﬁcates to be signed by partners Style of partnership When special partner deemed general partner Certiﬁcates to be acknowledged and registered False statement in certiﬁcate: partners liable as general partners Copy of certiﬁcate to be published Duration of partnerships Certiﬁcate to be signed on renewal Capital stock not to be withdrawn When special partners liable to refund capital withdrawn Suits to be by and against general partners Dissolution, how effected Cases not specially provided for Accounting Frauds by partners Books of account to be kept, and to be open to inspection Liability of special partners if books not kept, etc Schedule Enactments consolidated s 1 22 22 22 23 23 23 24 24 24 24 25 25 25 25 25 26 26 26 An Act Assembly relating to the law of partnership to consolidate certain enactments of the General 1 (1) (2) Short Title, etc The Short Title of this Act is the Partnership Act 1908.
This Act is a consolidation of the enactments mentioned in the Schedule hereto.

(3) All matters and proceedings commenced under the said enactments, and pending or in progress on the coming into operation of this Act, may be continued, completed, and enforced under this Act.

This Act is divided into Parts, as follows: • PART 1—The General Law relating to Partners.

(Sections 4 to 47.)

PART 2—Special Partnerships.

(Sections 48 to 67.)


(4) • 3 Partnership Act 1908 Reprinted as at 3 September 2007 Interpretation In this Act, if not inconsistent with the context,— Business includes every trade, occupation, or profession Court includes every Court and Judge having jurisdiction in the case.
Compare: 1891 No 6 s 3; Partnership Act 1890, s 45 (UK) Saving for rules of equity and common law The rules of equity and of common law applicable to partnership shall continue in force except so far as they are inconsistent with the express provisions of this Act.
Compare: 1891 No 6 s 48; Partnership Act 1890, s 46 (UK) Part 1 The general law relating to partners Nature of partnership Deﬁnition of partnership Partnership is the relation which subsists between persons carrying on a business in common with a view to proﬁt.
But the relation between members of any company or associ­ ation registered as a company under the Companies Act 1955 or the Companies Act 1993 or any other Act of the General Assembly for the time being in force and relating to the regis­ tration of joint stock, trading, or mining companies, or formed or incorporated by or in pursuance of any other Act of the Gen­ eral Assembly or letters patent, or Royal Charter, is not a part­ nership within the meaning of this Act.
Compare: 1891 No 6 s 4; Partnership Act 1890, s 1 (UK) Subsection (2) has been amended by substituting the Companies Act 1955 for the repealed Companies Act 1908.

Subsection (2) was amended, as from 1 July 1994, by section 2 Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16) by inserting the words “or the Companies Act 1993”.
Rules for determining existence of partnership In determining whether a partnership does or does not exist regard shall be had to the following rules: s 2 2 3 4 (1) (2) 5 4 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 5 (a) (b) (c) Joint tenancy, tenancy in common, joint property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any proﬁts made by the use thereof: The sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived: The receipt by a person of a share of the proﬁts of a busi­ ness is prima facie evidence that he is a partner in the business, but the receipt of such a share or of a payment contingent on or varying with the proﬁts of a business does not of itself make him a partner in the business and, in particular,— (i) The receipt by a person of a debt or other liqui­ dated amount, by instalments or otherwise, out of the accruing proﬁts of a business does not of itself make him a partner in the business or liable as such: (ii) A contract for the remuneration of a servant or agent of a person engaged in a business by a share of the proﬁts of the business does not of itself make the servant or agent a partner in the busi­ ness or liable as such: (iii) A person being the widow, widower, surviving civil union partner, surviving de facto partner, or child of a deceased partner, and receiving by way of annuity a portion of the proﬁts made in the business in which the deceased person was a partner, is not by reason only of such receipt a partner in the business or liable as such: (iv) The advance of money by way of loan to a person engaged or about to engage in any business on a contract with that person that the lender shall receive a rate of interest varying with the proﬁts, or shall receive a share of the proﬁts arising from
 carrying on the business, does not of itself make 5 Part 1 s 6 Partnership Act 1908 Reprinted as at 3 September 2007 the lender a partner with the person or persons carrying on the business, or liable as such: Provided that the contract is in writing, and signed by or on behalf of all the parties thereto: (v) A person receiving by way of annuity or other­ wise a portion of the proﬁts of a business in con­ sideration of the sale by him of the goodwill of the business is not, by reason only of such receipt, a partner in the business or liable as such.
Compare: 1891 No 6 s 5; Partnership Act 1890, s 2 (UK) Paragraph (c)(iii) was amended, as from 26 April 2005, by section 7 Relation­ ships (Statutory References) Act 2005 (2005 No 3) by inserting the words “, widower, surviving civil union partner, surviving de facto partner,” after the word “widow”.
Rights of person lending or selling in consideration of share of proﬁts in case of bankruptcy In the event of any person to whom money has been advanced by way of loan upon such a contract as is mentioned in the last preceding section, or of any buyer of a goodwill in consider­ ation of a share of the proﬁts of the business, being adjudged a bankrupt, entering into an arrangement to pay his creditors less than 100 cents in the dollar, or dying in insolvent circum­ stances, the lender of the loan shall not be entitled to recover anything in respect of his loan, and the seller of the goodwill shall not be entitled to recover anything in respect of the share of proﬁts contracted for, until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money’s worth have been satisﬁed.
Compare: 1891 No 6 s 6; Partnership Act 1890, s 3 (UK) Section 6 was amended, as from 10 July 1967, by section 14(1) Decimal Cur­ rency Amendment Act 1965 (1965 No 124) by substituting the words “100 cents in the dollar” for the words “twenty shillings in the pound”.

Meaning of “ﬁrm” Persons who have entered into partnership with one another are for the purposes of this Act called collectively a “ﬁrm”, and the name under which their business is carried on is called the “ﬁrm name”.
Compare: 1891 No 6 s 7; Partnership Act 1890, s 4 (UK) 6 7 6 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 11 8 9 Relations of partners to persons dealing with them Power of partner to bind the ﬁrm Every partner is an agent of the ﬁrm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the ﬁrm of which he is a member bind the ﬁrm and his partners, unless the partner so acting has in fact no authority to act for the ﬁrm in the par­ ticular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner.
Compare: 1891 No 6 s 8; Partnership Act 1890, s 5 (UK) Partners bound by acts on behalf of ﬁrm An act or instrument relating to the business of the ﬁrm, and done or executed in the ﬁrm name, or in any other manner showing an intention to bind the ﬁrm, by any person thereto authorised, whether a partner or not, is binding on the ﬁrm and all the partners: Provided that this section shall not affect any general rule of law relating to the execution of deeds or negotiable instruments.
Compare: 1891 No 6 s 9; Partnership Act 1890, s 6 (UK) 10 11 Partner using credit of ﬁrm for private purposes Where one partner pledges the credit of the ﬁrm for a purpose apparently not connected with the ﬁrm’s ordinary course of business, the ﬁrm is not bound unless he is in fact specially authorised by the other partners; but this section does not affect any personal liability incurred by an individual partner.
Compare: 1891 No 6 s 10; Partnership Act 1890, s 7 (UK) Effect of notice that ﬁrm will not be bound by acts of partner If it has been agreed between the partners that any restriction shall be placed on the power of any one or more of them to bind the ﬁrm, no act done in contravention of the agreement 7 Part 1 s 12 Partnership Act 1908 Reprinted as at 3 September 2007 12 13 is binding on the ﬁrm with respect to persons having notice of the agreement.
Compare: 1891 No 6 s 11; Partnership Act 1890, s 8 (UK) Liability of partners Every partner in a ﬁrm is liable jointly with the other partners for all debts and obligations of the ﬁrm incurred while he is a partner; and after his death his estate is also severally liable in a due course of administration for such debts and obligations as far as they remain unsatisﬁed, but subject to the prior payment of his separate debts.
Compare: 1891 No 6 s 12; Partnership Act 1890, s 9 (UK) Liability of the ﬁrm for wrongs Where by the wrongful act or omission of any partner acting in the ordinary course of the business of the ﬁrm, or with the authority of his co­partners, loss or injury is caused to any per­ son not being a partner in the ﬁrm, or any penalty is incurred, the ﬁrm is liable therefor to the same extent as the partner so acting or omitting to act.
Compare: 1891 No 6 s 13; Partnership Act 1890, s 10 (UK) 14 Misapplication of money received for ﬁrm, etc In the following cases, namely,— (a) Where one partner acting within the scope of his appar­ ent authority receives the money or property of a third person and misapplies it; and (b) Where a ﬁrm in the course of its business receives money or property of a third person, and the money or property so received is misapplied by one or more of the partners while it is in the custody of the ﬁrm,— the ﬁrm is liable to make good the loss.
Compare: 1891 No 6 s 14; Partnership Act 1890, s 11 (UK) Joint and several liability Every partner is liable jointly with his co­partners and also sev­ erally for everything for which the ﬁrm, while he is a partner 15 8 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 17 therein, becomes liable under either of the 2 last preceding sec­ tions.
Compare: 1891 No 6 s 15; Partnership Act 1890, s 12 (UK) 16 Improper employment of trust property for partnership purposes If a partner, being a trustee, improperly employs trust property in the business or on the account of the partnership, no other partner is liable for the trust property to the persons beneﬁ­ cially interested therein: Provided that— (a) This section shall not affect any liability incurred by any partner by reason of his having notice of a breach of trust; and (b) Nothing in this section shall prevent trust money from being followed and recovered from the ﬁrm if still in its possession or under its control.
Compare: 1891 No 6 s 16; Partnership Act 1890, s 13 (UK) 17 (1) (2) Persons liable by “holding out” Every one who, by words spoken or written, or by conduct, represents himself, or who knowingly suffers himself to be represented, as a partner in a particular ﬁrm is liable as a part­ ner to any one who has, on the faith of any such representation, given credit to the ﬁrm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made.
Provided that where after a partner’s death the partnership business is continued in the old ﬁrm name, the continued use of that name or of the deceased partner’s name as part thereof shall not of itself make his executors’ or administrators’ estate or effects liable for any partnership debts contracted after his death.
Compare: 1891 No 6 s 17; Partnership Act 1890, s 14 (UK) 9 Part 1 s 18 Partnership Act 1908 Reprinted as at 3 September 2007 18 19 Admissions and representations of partners An admission or representation made by any partner concern­ ing the partnership affairs, and in the ordinary course of its business, is evidence against the ﬁrm.
Compare: 1891 No 6 s 18; Partnership Act 1890, s 15 (UK) Notice to acting partner to be notice to ﬁrm Notice to any partner who habitually acts in the partnership business of any matter relating to partnership affairs operates as notice to the ﬁrm, except in the case of a fraud on the ﬁrm committed by or with the consent of that partner.
Compare: 1891 No 6 s 19; Partnership Act 1890, s 16 (UK) Liabilities of incoming and outgoing partners 20 (1) A person who is admitted as a partner into an existing ﬁrm does not thereby become liable to the creditors of the ﬁrm for anything done before he became a partner.

(2) A partner who retires from a ﬁrm does not thereby cease to be liable for partnership debts or obligations incurred before his retirement.
(3) A retiring partner may be discharged from any existing liabil­ ities by an agreement to that effect between himself and the members of the ﬁrm as newly constituted and the creditors, and this agreement may be either express or inferred as a fact from the course of dealing between the creditors and the ﬁrm as newly constituted.
Compare: 1891 No 6 s 20; Partnership Act 1890, s 17 (UK) Revocation of continuing guaranty by change in ﬁrm A continuing guaranty given either to a ﬁrm or to a third person in respect of the transactions of a ﬁrm is, in the absence of agreement to the contrary, revoked as to future transactions by any change in the constitution of the ﬁrm to which, or of the ﬁrm in respect of the transactions of which, the guaranty was given.
Compare: 1891 No 6 s 21; Partnership Act 1890, s 18 (UK) 21 10 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 24 Relations of partners to one another 22 Variation by consent of terms of partnership The mutual rights and duties of partners, whether ascertained by agreement or deﬁned by this Act, may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing.
Compare: 1891 No 6 s 22; Partnership Act 1890, s 19 (UK) Partnership property 23 (1) All property and rights and interests in property originally brought into the partnership stock, or acquired (whether by purchase or otherwise) on account of the ﬁrm or for the pur­ poses and in the course of the partnership business, are called in this Act partnership property, and must be held and ap­ plied by the partners exclusively for the purposes of the part­ nership and in accordance with the partnership agreement.
Provided that the legal estate or interest in any land which be­ longs to the partnership shall devolve according to the nature and tenure thereof and the general rules of law thereto applic­ able, but in trust, so far as necessary, for the persons beneﬁ­ cially interested in the land under this section.
(2) (3) Where co­owners of an estate or interest in any land not being itself partnership property are partners as to proﬁts made by the use of that land or estate, and purchase other land or estate out of the proﬁts to be used in like manner, the land or estate so purchased belongs to them, in the absence of an agreement to the contrary, not as partners, but as co­owners for the same respective estates and interests as are held by them in the land or estate ﬁrst mentioned at the date of the purchase.
Compare: 1891 No 6 s 23; Partnership Act 1890, s 20 (UK) 24 Property bought with partnership money Unless the contrary intention appears, property bought with money belonging to the ﬁrm is deemed to have been bought on account of the ﬁrm.
Compare: 1891 No 6 s 24; Partnership Act 1890, s 21 (UK) 11 Part 1 s 25 Partnership Act 1908 Reprinted as at 3 September 2007 25 Conversion into personal estate of land held as partnership property Where land has become partnership property it shall, unless the contrary intention appears, be treated as between the part­ ners (including the representatives of a deceased partner), and also as between the heirs of a deceased partner and his execu­ tors or administrators, as personal and not real estate.
Compare: 1891 No 6 s 25; Partnership Act 1890, s 22 (UK) 26 Procedure against partnership property for partner’s separate judgment debt (1) A writ of execution shall not issue against any partnership (2) property except on a judgment against the ﬁrm.
The High Court or a Judge thereof may, on the application by summons of any judgment creditor of a partner, make an order charging that partner’s interest in the partnership property and proﬁts with payment of the amount of the judgment debt and interest thereon; and may by the same or a subsequent order appoint a receiver of that partner’s share of proﬁts (whether already declared or accruing), and of any other money coming to him in respect of the partnership, and direct all accounts and inquiries and give all other orders and directions which might have been directed or given if the charge had been made in favour of the judgment creditor by the partner, or which the circumstances of the case require.
(2A) On the application of any judgment creditor who has obtained in, or removed into, the District Court a judgment, order, or decree for the payment of a sum of money, a District Court may make any order that may be made by the High Court under this section.

The other partner or partners shall be at liberty at any time to redeem the interest charged or, in case of a sale being directed, to purchase the same.
Compare: 1891 No 6 s 26; Partnership Act 1890, s 23(1)­(3) (UK) (3) Subsection (2A) was inserted, as from 27 November 1947, by section 46 Statutes Amendment Act 1947 (1947 No 60).

The words “District Court” were substituted for the words “Magistrates’ Court”, as from 1 April 1980, pursuant to section 18(2) District Courts Amendment Act 1979 (1979 No 125).
12 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 27 The words “High Court” were substituted for the words “Supreme Court”, as from 1 April 1980, pursuant to section 12 Judicature Amendment Act 1979 (1979 No 124).
27 Rules as to interests and duties of partners The interests of partners in the partnership property, and their rights and duties in relation to the partnership, shall be deter­ mined, subject to any agreement (express or implied) between the partners, by the following rules: (a) (b) (c) All the partners are entitled to share equally in the cap­ ital and proﬁts of the business, and must contribute equally towards the losses, whether of capital or other­ wise, sustained by the ﬁrm: The ﬁrm must indemnify every partner in respect of payments made and personal liabilities incurred by him— (i) In the ordinary and proper conduct of the busi­ ness of the ﬁrm; or In or about anything necessarily done for the preservation of the business or property of the ﬁrm: (ii) A partner making, for the purpose of the partnership, any actual payment or advance beyond the amount of capital which he has agreed to subscribe is entitled to interest at the rate of 5 percent per annum from the date of the payment or advance: (d) A partner is not entitled, before the ascertainment of (e) (f) proﬁts, to interest on the capital subscribed by him: Every partner may take part in the management of the partnership business: No partner shall be entitled to remuneration for acting in the partnership business: (g) No person may be introduced as a partner without the consent of all existing partners: (h) Any difference arising as to ordinary matters connected with the partnership business may be decided by a ma­ jority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners: 13 Part 1 s 28 Partnership Act 1908 Reprinted as at 3 September 2007 (i) The partnership books are to be kept at the place of busi­ ness of the partnership (or the principal place if there is more than one), and every partner may when he thinks ﬁt have access to and inspect and copy any of them.
Compare: 1891 No 6 s 27; Partnership Act 1890, s 24 (UK) 28 Expulsion of partner A majority of the partners cannot expel any partner unless a power to do so has been conferred by express agreement be­ tween the partners.
Compare: 1891 No 6 s 28; Partnership Act 1890, s 25 (UK) Retirement from partnership at will 29 (1) Where no ﬁxed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of his intention so to do to all the other partners.

(2) Where the partnership has originally been constituted by deed, a notice in writing, signed by the partner giving it, shall be sufﬁcient for this purpose.
Compare: 1891 No 6 s 29; Partnership Act 1890, s 26 (UK) Conditions of partnership where term continued over 30 (1) Where a partnership entered into for a ﬁxed term is continued after the term has expired, and without any expressed new agreement, the rights and duties of the partners remain the same as they were at the expiration of the term, so far as is consistent with the incidents of a partnership at will.
(2) A continuance of the business by the partners, or such of them as habitually acted therein during the term, without any settle­ ment or liquidation of the partnership affairs is presumed to be a continuance of the partnership.

Compare: 1891 No 6 s 30; Partnership Act 1890, s 27 (UK) Duty to render accounts, etc Partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his legal representatives.
Compare: 1891 No 6 s 31; Partnership Act 1890, s 28 (UK) 31 14 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 34 32 (1) (2) 33 Partners to account for private proﬁts Every partner must account to the ﬁrm for any beneﬁt derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him of the partnership property, name, or business connection.
This section applies also to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs thereof have been completely wound up, ei­ ther by any surviving partner or by the representatives of the deceased partner.
Compare: 1891 No 6 s 32; Partnership Act 1890, s 29 (UK) Partner not to compete with ﬁrm If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the ﬁrm, he must account for and pay over to the ﬁrm all proﬁts made by him in that business.
Compare: 1891 No 6 s 33; Partnership Act 1890, s 30 (UK) Rights of assignee of share of partnership 34 (1) An assignment by any partner of his share in the partnership, either absolute or by way of mortgage, does not, as against the other partners, entitle the assignee, during the continuance of the partnership, to interfere in the management or admin­ istration of the partnership business or affairs, or to require any account of the partnership transactions, or to inspect the partnership books, but entitles the assignee only to receive the share of proﬁts to which the assigning partner would otherwise be entitled, and the assignee must accept the account of proﬁts agreed to by the partners.
In case of a dissolution of the partnership, whether as respects all the partners or as respects the assigning partner, the as­ signee is entitled to receive the share of the partnership assets to which the assigning partner is entitled as between himself and the other partners, and, for the purpose of ascertaining that share, to an account as from the date of the dissolution.
Compare: 1891 No 6 s 34; Partnership Act 1890, s 31 (UK) (2) 15 Part 1 s 35 Partnership Act 1908 Reprinted as at 3 September 2007 Dissolution of partnership and its consequences 35 (1) (2) 36 (1) Dissolution by expiration or notice Subject to any agreement between the partners, a partnership is dissolved,— (a) If entered into for a ﬁxed term, by the expiration of that term: If entered into for a single adventure or undertaking, by the termination of that adventure or undertaking: If entered into for an undeﬁned time, by any partner giving notice to the other or others of his intention to dissolve the partnership.
(b) (c) In the last­mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice.

Compare: 1891 No 6 s 35; Partnership Act 1890, s 32 (UK) Dissolution by death, bankruptcy, or charge Subject to any agreement between the partners, every partner­ ship is dissolved as regards all the partners by the death or bankruptcy of any partner.
(2) A partnership may, at the option of the other partners, be dis­ solved if any partner suffers his share of the partnership prop­ erty to be charged under this Act for his separate debt.

Compare: 1891 No 6 s 36; Partnership Act 1890, s 33 (UK) Dissolution by illegality of partnership A partnership is in every case dissolved by the happening of any event which makes it unlawful for the business of the ﬁrm to be carried on or for the members of the ﬁrm to carry it on in partnership.
Compare: 1891 No 6 s 37; Partnership Act 1890, s 34 (UK) Dissolution by the Court On application by a partner the Court may declare a dissolution of the partnership in any of the following cases: (a) Where a partner is found lunatic by inquisition, or is shown to the satisfaction of the Court to be of perman­ 37 38 16 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 39 ently unsound mind, in either of which cases the appli­ cation may be made as well on behalf of that partner by his committee or next friend or person having title to intervene as by any other partner: (b) Where a partner, other than the partner suing, becomes in any other way permanently incapable of performing his part of the partnership contract: (c) Where a partner, other than the partner suing, has been guilty of such conduct as in the opinion of the Court, regard being had to the nature of the business, is calcu­ lated to prejudicially affect the carrying on of the busi­ ness: (d) Where a partner, other than the partner suing, wilfully or persistently commits a breach of the partnership agree­ ment, or otherwise so conducts himself in matters relat­ ing to the partnership business that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with him: (e) Where the business of the partnership can only be car­ ried on at a loss: (f) Where circumstances have arisen which, in the opinion of the Court, render it just and equitable that the part­ nership be dissolved.
Compare: 1891 No 6 s 38; Partnership Act 1890, s 35 (UK) 39 Rights of persons dealing with ﬁrm against apparent members (1) Where a person deals with a ﬁrm after a change in its consti­ tution, he is entitled to treat all apparent members of the old ﬁrm as still being members of the ﬁrm until he has notice of the change.

(2) An advertisement in the Gazette shall be notice as to persons who had not dealings with the ﬁrm before the date of the dis­ solution or change so advertised.
The estate of a partner who dies or who becomes bankrupt, or of a partner who, not having been known to the person dealing with the ﬁrm to be a partner, retires from the ﬁrm, is not liable (3) 17 Part 1 s 40 Partnership Act 1908 Reprinted as at 3 September 2007 for partnership debts contracted after the date of the death, bankruptcy, or retirement respectively.
Compare: 1891 No 6 s 39; Partnership Act 1890, s 36 (UK) 40 41 Right of partners to notify dissolution On the dissolution of a partnership or retirement of a partner any partner may publicly notify the same, and may require the other partner or partners to concur for that purpose in all necessary or proper acts, if any, which cannot be done without his or their concurrence.
Compare: 1891 No 6 s 40; Partnership Act 1890, s 37 (UK) Continuing authority of partners for purposes of winding up After the dissolution of a partnership the authority of each part­ ner to bind the ﬁrm, and the other rights and obligations of the partners, continue (notwithstanding the dissolution) so far as may be necessary to wind up the affairs of the partnership and to complete transactions begun but unﬁnished at the time of the dissolution, but not otherwise: Provided that the ﬁrm is in no case bound by the acts of a partner who has become bankrupt; but this proviso does not affect the liabil­ ity of any person who has after the bankruptcy represented himself, or knowingly suffered himself to be represented, as a partner of the bankrupt.
Compare: 1891 No 6 s 41; Partnership Act 1890, s 38 (UK) Rights of partners as to application of partnership property On the dissolution of a partnership every partner is entitled as against the other partners in the ﬁrm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the ﬁrm, and to have the surplus assets after such payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners of the ﬁrm; and for that purpose any partner or his representatives may, on the termination of the partnership, 42 18 Reprinted as at 3 September 2007 Partnership Act 1908 Part 1 s 44 apply to the Court to wind up the business and affairs of the ﬁrm.
Compare: 1891 No 6 s 42; Partnership Act 1890, s 39 (UK) 43 44 Apportionment of premium where partnership prematurely dissolved Where one partner has paid a premium to another on entering into a partnership for a ﬁxed term, and the partnership is dis­ solved before the expiration of that term otherwise than by the death of a partner, the Court may order the repayment of the premium or of such part thereof as it thinks just, having regard to the terms of the partnership contract and to the length of time during which the partnership has continued, unless— (a) The dissolution is, in the judgment of the Court, wholly or chieﬂy due to the misconduct of the partner who paid the premium; or The partnership has been dissolved by an agreement containing no provision for a return of any part of the premium.
(b) Compare: 1891 No 6 s 43; Partnership Act 1890, s 40 (UK) Rights where partnership dissolved for fraud or misrepresentation Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitled— (a) To a lien on or right of retention of the surplus of the partnership assets, after satisfying the partnership liabil­ ities, for any sum of money paid by him for the purchase of a share in the partnership and for any capital con­ tributed by him; and To stand in the place of the creditors of the ﬁrm for any payments made by him in respect of the partnership liabilities; and To be indemniﬁed, by the person guilty of the fraud or making the representation, against all the debts and liabilities of the ﬁrm.
(b) (c) Compare: 1891 No 6 s 44; Partnership Act 1890, s 41 (UK) 19 Part 1 s 45 Partnership Act 1908 Reprinted as at 3 September 2007 45 Right of outgoing partner to share proﬁts made after dissolution (1) Where any member of a ﬁrm dies or otherwise ceases to be a partner, and the surviving or continuing partners carry on the business of the ﬁrm with its capital or assets without any ﬁnal settlement of accounts as between the ﬁrm and the outgoing partner or his estate, then, in the absence of any agreement to the contrary, the outgoing partner or his estate is entitled, at the option of himself or his representative, to such share of the proﬁts made since the dissolution as the Court may ﬁnd to be attributable to the use of his share of the partnership assets, or to interest at the rate of 5 percent per annum on the amount of his share of the partnership assets.
Provided that where by the partnership contract an option is given to surviving or continuing partners to purchase the inter­ est of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner or the outgoing partner, or his estate, as the case may be, is not entitled to any further or other share of proﬁts; but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof he is liable to account under the foregoing provisions of this section.
Compare: 1891 No 6 s 45; Partnership Act 1890, s 42 (UK) (2) Retiring or deceased partner’s share to be a debt Subject to any agreement between the partners, the amount due from surviving or continuing partners to an outgoing partner or the representatives of a deceased partner, in respect of the outgoing or deceased partner’s share, is a debt accruing at the date of the dissolution or death.
Compare: 1891 No 6 s 46; Partnership Act 1890, s 43 (UK) Distribution of assets on ﬁnal settlement of accounts In settling accounts between the partners after a dissolution of partnership the following rules shall, subject to any agreement, be observed: (a) Losses, including losses and deﬁciencies of capital, shall be paid ﬁrst out of proﬁts, next out of capital, and 46 47 20 Reprinted as at 3 September 2007 Partnership Act 1908 Part 2 s 49 (b) lastly, if necessary, by the partners individually in the proportion in which they were entitled to share proﬁts: The assets of the ﬁrm, including the sums (if any) con­ tributed by the partners to make up losses or deﬁciencies of capital, shall be applied in the following manner and order: (i) In paying the debts and liabilities of the ﬁrm to persons who are not partners therein: In paying to each partner rateably what is due from the ﬁrm to him for advances as distin­ guished from capital: In paying to each partner rateably what is due from the ﬁrm to him in respect of capital: (iv) The ultimate residue, if any, shall be divided among the partners in the proportion in which proﬁts are divisible.
Compare: 1891 No 6 s 47; Partnership Act 1890, s 44 (UK) (iii) (ii) Part 2 Special partnerships 48 Part 1 not to affect special partnerships Part 1 of this Act shall not affect special partnerships except in so far as the general law relating to partners is declared by the succeeding provisions hereof to be applicable to special partnerships.
Compare: 1891 No 6 s 49; Limited Partnerships Act 1907, s 7 (UK) 49 Special partnerships may be formed, except for banking and insurance Special partnerships may be formed for the transaction of agri­ cultural, mining, mercantile, mechanical, manufacturing, or other business, by any number of persons, upon the terms and subject to the conditions and liabilities hereinafter prescribed: Provided that nothing herein shall authorise any such partnership for the purpose either of banking or insurance.
Compare: 1880 No 12 s 59; Limited Partnerships Act 1907, s 4(1) (UK) 21 Part 2 s 50 Partnership Act 1908 Reprinted as at 3 September 2007 50 51 General and special partners, and their liabilities Every special partnership may consist of general partners, who shall be jointly and severally responsible as general partners are now by law, and of persons, to be called special partners, who shall contribute to the common stock speciﬁc sums in money as capital, beyond which they shall not be responsi­ ble for any debt of the partnership except in cases hereinafter provided for.
Compare: 1880 No 12 s 60; Limited Partnerships Act 1907, s 4(2) (UK) Certiﬁcates to be signed by partners All the persons forming any special partnership shall, before commencing business, sign a certiﬁcate containing— (a) The style of the ﬁrm under which the partnership is to be conducted; The names and places of residence of all the partners, distinguishing the general from the special partners; The amount of capital which each special partner con­ tributes, and also (if any) the amount contributed by the general partners to the common stock; The general nature of the business to be transacted; The principal or only place at which it is to be trans­ acted; and The time when such partnership is to commence and when it is to terminate.
(b) (c) (d) (e) (f) Compare: 1880 No 12 s 61; Limited Partnerships Act 1907, s 8 (UK) 52 Style of partnership Such style or ﬁrm shall contain the names of general partners only, or the name of one such partner, with (in either case) the addition of the words “and Company”, and the general partners only shall transact the business of the partnership.
Compare: 1880 No 12 s 62 53 When special partner deemed general partner If in carrying on such business or in any contract connected therewith the name of any special partner is used with his con­ sent or privity, or if he personally makes any contract respect­ ing the concerns of the partnership, he shall be deemed to be a 22 Reprinted as at 3 September 2007 Partnership Act 1908 Part 2 s 56 general partner with respect to the contract or matter in which his name has been so used or as to which he so contracted.
Compare: 1880 No 12 s 63; Limited Partnerships Act 1907, s 6(1) (UK) Certiﬁcates to be acknowledged and registered 54 (1) A special partnership shall not be deemed formed until such certiﬁcate as aforesaid is acknowledged by each partner before some Justice, and registered in the ofﬁce of the High Court in a book to be kept for that purpose by the Registrar of such Court, open to public inspection.
Every such certiﬁcate shall be so registered at the High Court ofﬁce at or nearest to the principal or only place at which the business of the partnership is to be transacted.
Compare: 1880 No 12 s 64; Limited Partnerships Act 1907, ss 5, 8 (UK) (2) 55 False statement in certiﬁcate: partners liable as general partners If any false statement is made in any such certiﬁcate, all the persons interested in the special partnership shall be liable for all the engagements thereof as general partners: Provided that no clerical error or matter not of substance shall be deemed false within the meaning of this section unless some person is prejudiced thereby, in which case the special partners shall be liable to the person so prejudiced.
Compare: 1880 No 12 s 65 Copy of certiﬁcate to be published 56 (1) A copy of such certiﬁcate shall be published once at least in the Gazette and twice in some newspaper published at the in­ tended principal place of business of the special partnership, or at the nearest place to such place of business where a news­ paper is published.

If such publication is not so made, the partnership shall be deemed general.
Compare: 1880 No 12 s 66 (2) 23 Part 2 s 57 Partnership Act 1908 Reprinted as at 3 September 2007 57 Duration of partnerships A special partnership shall not be entered into for a longer period than 7 years, but any such partnership may be renewed at the end of that period or at the termination of any shorter period for which it was formed.
Compare: 1880 No 12 s 67 Certiﬁcate to be signed on renewal 58 (1) Upon every renewal or continuation beyond the time origin­ ally agreed on for the duration of a special partnership a cer­ tiﬁcate thereof shall be signed, acknowledged, registered, and published in like manner as the original certiﬁcate.

Every partnership renewed or continued otherwise than in con­ formity with the provisions of this section shall be deemed general.
Compare: 1880 No 12 s 68 (2) 59 Capital stock not to be withdrawn During the continuance of any special partnership no part of the certiﬁed capital thereof shall be withdrawn, nor shall any division of interest or proﬁt be made so as to reduce such cap­ ital below the aggregate amount stated in the certiﬁcate.
Compare: 1880 No 12 s 69; Limited Partnerships Act 1907, s 4(3) (UK) 60 When special partners liable to refund capital withdrawn If any part of such capital is withdrawn, or any such division is (1) made, so that at any time during the continuance or at the ter­ mination of the special partnership the assets are insufﬁcient to pay the partnership debts, the special partners shall be sev­ erally liable to refund every sum received by them respect­ ively in diminution of such capital or by way of such interest or proﬁt.
(2) All such sums may be recovered as money had and received by them respectively to the use of the general partners; and may in the case of any judgment being obtained against the general partners, be recovered by the plaintiff against the spe­ cial partners, or any of them, by process of execution issued under such judgment by leave of the High Court.
Compare: 1880 No 12 s 70 24 Reprinted as at 3 September 2007 Partnership Act 1908 Part 2 s 65 61 62 63 64 65 The words “High Court” were substituted for the words “Supreme Court”, as from 1 April 1980, pursuant to section 12 Judicature Amendment Act 1979 (1979 No 124).
Suits to be by and against general partners All suits respecting the business of any special partnership shall be prosecuted by and against the general partners only, except in the cases in which it is provided by this Act that special partners shall or may be deemed general partners, in which cases every special partner who beomes liable as a gen­ eral partner may be joined or not in the action as a defendant, at the discretion of the party suing.
Compare: 1880 No 12 s 71 Dissolution, how effected A dissolution of a special partnership shall not take place, ex­ cept by operation of law, before the time speciﬁed in the cer­ tiﬁcate, unless a notice of such dissolution is signed, acknow­ ledged, registered, and published in like manner as the original certiﬁcate.
Compare: 1880 No 12 s 72 Cases not specially provided for In all cases not hereinbefore otherwise provided for all the members of a special partnership shall be subject to the liabil­ ities and entitled to the rights of general partners.

Compare: 1880 No 12 s 73 Accounting The general partners shall be liable to account to each other and to the special partners for their management of the part­ nership concerns as other partners are by law.
Compare: 1880 No 12 s 74 Frauds by partners Every partner guilty of any fraud in the affairs of the partner­ ship shall be liable civilly to the party injured to the extent of his damage, and shall also be liable to an indictment for a crime 25 Part 2 s 66 Partnership Act 1908 Reprinted as at 3 September 2007 66 67 punishable by ﬁne or imprisonment, or both, at the discretion of the Court by which he is tried.
Compare: 1880 No 12 s 75 Books of account to be kept, and to be open to inspection If the general partners do not at all times cause regular books of account to be kept, or do not have the same open at all reasonable times to the inspection of the special partners, such special partners shall be entitled to have the special partnership dissolved and the accounts thereof taken by the High Court.
Compare: 1880 No 12 s 76 Liability of special partners if books not kept, etc If the books of any special partnership are, with the know­ ledge or privity of the special partners or any of them, kept incorrectly, or contain any false or deceptive entries, whereby the ascertainment of the matters mentioned in sections 59 and 60 hereof are or may be affected, the certiﬁed capital of such special partners or such one or more of them having such knowledge or privity shall as against creditors be deemed to have been withdrawn, and they or he shall be liable accord­ ingly under the provisions of the said section 60.
Compare: 1880 No 12 s 77 Schedule Enactments consolidated Section 1(2) • • 1880, No 12—The Mercantile Law Act 1880: Sections 59 to 77.

1891, No 6—The Partnership Act 1891.

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