The Northern Daily Times.
Liverpool, Merseyside, England, 1856-02-25 00:00:00

LAW OF PARTNERSHIP.

Commerce—court, 21st Feb. 1856.
Dear Sir,—We have looked over the bill which purports
to be one to " amend the law of partnership." We think
the first clause of it is fraught with mischief. It would
enable men to set up in business under cover of another
name. If it succeeded, they would pocket the profits ; if
a failure, they would withdraw their capital, and leave
their creditors only the man of straw. It would be impos-
sible, by any vigilance, to ascertain whether any concern
was genuine, or a sham. At present this fraud is imprac-
ticable, because the fact of sharing profits, attaches the
indefinite liabilities of partnership. With respect to the
second clause, the law at present is, that .a servant, or
agent, if he is to be paid by a share of the profits,
as such, incurs all the responsibilities of a partner,
but he escapes such liabilities if he is to be paid a sum of
money as a salary which will be equal in amount to a
given share of the profits. The pecuniary emoluments in
both cases are precisely the same. For the above reasons
we think the first clause a very dangerous one, and the
second an unnecessary one.—We are, &e.,

EVANS AND SON

To the Chairman of the Committee
of the Liverpool Guardian Society,
Mr. Torr moved the following resolution :—" That it is
the opinion of this chamber that the bill introduced into
parliament entitled a Bill to amend the law of partner-
ship,' is fraught with evil of the greatest magnitude to the
true interests of commerce, and to the credit of this
country. He said that the bill they were met to discuss
contained but three clauses, one of which was explanatory
of one of the preceding ones, and therefore he thought
they would not have any difficulty at arriving at some-
thing like the meaning of what the two substantive
clauses were. He coincided in what had fallen from the
chairman in the regret he expressed as to the difference
of opinion that arose in the chamber on the more general
question of limited liability, but although the discussion
on it had extended to a very great length, and had occu-
pied the chamber not less than three days,
.yet he held
that the discussion had not been useless, nor the time so
occupied misspent. (Hear, hear.) The principle of
limited liability had received the sanetion'of the legisla.
ture in a certain form, and it was the ditty of the chamber
to bow to that decision. But now came the addenda, for
in this, the very next, session of parliament, they were
asked to sanction a further extension of the measure,
which, at first, it was thought only applied to joint-stock
companies and to bodies, the shares of which should be
of a certain value. They were now asked to sanction
its extension in one of its provisions to private
individuals, and to undertakings in which the capital
was not a bona Ms subscription by shares, but in which a
party might advance to another a sum of money either in
his own name or in the name of another, to share in his
profits without himself taking any risk whatever. He,
therefore, would ground his first objection to the measure
on this point—That there was no publicity or registration
required as to who the party was who advanced the
money, what was the' amount of money he so advanced,
and for how long such sum of money was to be'advanced ;
and that, consequently, he was playing fast and loose with
the party to whom the money was so advanced. With
that money, the party who received it would obtain a
certain amount of credit ; and, so long as • the concern
went on profitably, all was well:; but when adversities
befell it, who would be the first to be informed of the
change in their circumstances ? The party who advanced
the money, and he naturally looking to self-interest, as all
men would do, would secure himself by obtaining back the
loan he made. (Hear, hoar.) He thought there would be
no difference of opinion as to that objection to the pre-
sent bill, because, on the discussion of the general question
of limited liability, they had been told by the various
gentlemen who spoke in favour of it that it would be hedged
round by safeguards in every form of publicity. He would
read an extract from the speech of one of those gentle-
men :—" Gentlemen are really frightening themselves in
the anticipation of evils which would have no existence,
for the provisions of the law would of themselves be ade-
quate to guard against the occurrence; of such dangers.
This is not the place to enter into details, but it may be
stated, that in any law regulating limited liability part-
nerships, two great safeguards would be ensured. The
one is, publicity—the fullest publicity. Ever such com-
pany would have to declare its capital, its pay rtners, and
the duration of the partnership: the same to be inserted
in a local register, free of access to"any one ; and some-
Tpsryway one
some-
thing might be added to the title of the firm by which
this persons might k
wouldnow whether
swh as
with
limitedh
t 4 or rnot
means o
In
f
and granted credip
judging for themselvesi how far it would be safe to give
themselves, and nott tuotiwt
an es ; and, if they erred in judgment,
credit to such corn
hieseplyr,ovthiseionbisaomfethmeulsatwa.ttacHcheatro,
penalties for any revsaf?guard consists in having adequate
lent act, or by
nonaston of the law, whether by a fradu-
two precautions womnpliance with its provisions, These
meet it very much bettertntelet the whole of the case, and
after this it be said that suchi'tnaanyn now in force. If
would prevail under limited 17adli
uch improper practices
very same thing may be done nowfiitY, I reply that the
facility, under the law of unlimited liability. even greater
heard it urged, as an
hat the e have
withdrawn after it was declared Wl, ital might be
now, and nobody be the wiser ?" He it torr) dewed
reply yes, but then the partnership would have rendered
him liable, while in the bill before them there was no
liability attaching to the party advancing the money.
(Hear, hear.) But to finish the extract:—" Cannot a
capitalist now advance money to a concern at a high rate
of interest, and when adverse eircoms4nees arise (of
which he would be sure to have early information) with-
draw it ; or, if he left it in the concern, he allowed to
rank on the estate with other creditors, who, perhaps,
trusted the house solely because they know it was backed
by a man of means (Hear, hear.) Could this happen
in a limited liability concern ? Certainly not. In
that ease the capital ad
v
the benefit auce w 90,41 an asset for
of the creditors, and not a. liability."
That was his first objection to
objection was that thoro was no notice of withdrawal