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PARTNERSHIP ACT 1890

PARTNERSHIP ACT 1890 - LONG TITLE

An Act to declare and amend the Law of Partnership.{1}
[14th August 1890]
Nature of PartnershipDefinition of partnership.

PARTNERSHIP ACT 1890 - SECT 1

1.(1) Partnership is the relation which subsists between persons
carrying on a business in common with a view of profit.

(2) But the relation between members of any company or association
which is

(a)Registered as a company under the Companies Act, 1862, or any
other Act of Parliament for the time being in force and relating
to the registration of joint stock companies; or

(b)Formed or incorporated by or in pursuance of any other Act of
Parliament or letters patent, or Royal Charter;

Rules for determining existence of partnership.

PARTNERSHIP ACT 1890 - SECT 2

2. In determining whether a partnership does or does not exist,
regard shall be had to the following rules:

(1)Joint tenancy, tenancy in common, joint property, common 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.

(2)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.

(3)The receipt by a person of a share of the profits of a
business is prima8 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

(a)The receipt by a person of a debt or other liquidated 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:

(b)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 business or liable as such:

(c)A person being the widow 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:

(d)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 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:

(e)A person receiving by way of annuity or otherwise a portion of
the profits of a business in consideration 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.

PARTNERSHIP ACT 1890 - SECT 3
Postponement of rights of person lending or selling in consideration
of share of profits in case of insolvency.

3. 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
foregoing section, or of any buyer of a goodwill in consideration
of a share of the profits of the business, being adjudged a
bankrupt, entering into an arrangement to pay his creditors less
than [100p] in the pound, or dying in insolvent circumstances, 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.

PARTNERSHIP ACT 1890 - SECT 4
Meaning of firm.

4.(1) 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.

Power of partner to bind the firm.

PARTNERSHIP ACT 1890 - SECT 5

5. 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 particular
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.

PARTNERSHIP ACT 1890 - SECT 6
Partners bound by acts on behalf of firm.

6. An act or instrument relating to the business of the firm 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.

PARTNERSHIP ACT 1890 - SECT 7
Partner using credit of firm for private purposes.

7. 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.

PARTNERSHIP ACT 1890 - SECT 8
Effect of notice that firm will not be bound by acts of partner.

8. 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 is binding
on the firm with respect to persons having notice of the agreement.

PARTNERSHIP ACT 1890 - SECT 9
Liability of partners.

9. 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, so far as they remain unsatisfied, but subject
in... Ireland to the prior payment of his separate debts.

PARTNERSHIP ACT 1890 - SECT 10
Liability of the firm for wrongs.

10. Where, by any wrongful act or omission of any partner acting
in the ordinary course of the business of the firm, or with the
authority of his co-partners, loss or injury is caused to any
person 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.

PARTNERSHIP ACT 1890 - SECT 11
Misapplication of money or property received for or in custody of
the firm.

11. In the following cases; namely

(a)Where one partner acting within the scope of his apparent
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;

Liability for wrongs joint and several.

PARTNERSHIP ACT 1890 - SECT 12

12. Every partner is liable jointly with his co-partners and also
severally for everything for which the firm while he is a partner
therein becomes liable under either of the two last preceding
sections.

PARTNERSHIP ACT 1890 - SECT 13
Improper employment of trust-property for partnership purposes.

13. 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 beneficially
interested therein:

Provided as follows:

(1)This section shall not affect any liability incurred by any
partner by reason of his having notice of a breach of trust; and

(2)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.

PARTNERSHIP ACT 1890 - SECT 14
Persons liable by ""holding out.''

14.(1) Every one who by word 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
partner 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.

(2) Provided that where after a partner's death the partnership
business is continued in the old firm's 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.

PARTNERSHIP ACT 1890 - SECT 15
Admissions and representations of partners.

15. An admission or representation made by any partner concerning
the partnership affairs, and in the ordinary course of its business,
is evidence against the firm.

PARTNERSHIP ACT 1890 - SECT 16
Notice to acting partner to be notice to the firm.

16. 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.

PARTNERSHIP ACT 1890 - SECT 17
Liabilities of incoming and outgoing partners.

17.(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
liabilities, 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.

PARTNERSHIP ACT 1890 - SECT 18
Revocation of continuing guaranty by change in firm.

18. A continuing guaranty or cautionary obligation 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 or obligation was given.

Variation by consent of terms of partnership.

PARTNERSHIP ACT 1890 - SECT 19

19. 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.

PARTNERSHIP ACT 1890 - SECT 20
Partnership property.

20.(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 purposes and in
the course of the partnership business, are called in this Act
partnership property, and must be held and applied by the partners
exclusively for the purposes of the partnership and in accordance
with the partnership agreement.

(2) Provided that the legal estate or interest in any land,...
which belongs to the partnership shall devolve according to the
nature and tenure thereof, and the general rules of law thereto
applicable, but in trust, so far as necessary, for the persons
beneficially interested in the land under this section.

(3) Where co-owners 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 co-owners 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.

PARTNERSHIP ACT 1890 - SECT 21
Property bought with partnership money.

21. Unless the contrary intention appears, property bought with money
belonging to the firm is deemed to have been bought on account of
the firm.

PARTNERSHIP ACT 1890 - SECT 22
Conversion into personal estate of land held as partnership property.

22. Where land or any heritable interest therein has become
partnership property, it shall, unless the contrary intention appears,
be treated as between the partners (including the representatives of
a deceased partner), and also as between the heirs of a deceased
partner and his executors or administrators, as personal or moveable
and not real or heritable estate.

PARTNERSHIP ACT 1890 - SECT 23
Procedure against partnership property for a partner's separate
judgment debt.

23.(1) . . . [An enforcement order shall not be made under [the
Judgments Enforcement (Northern Ireland) Order 1981]] against any
partnership property except on a judgment against the firm.

(2) [The Enforcement of Judgments Office] may, on the application...
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 which may be 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 may require.

(3) 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.

(4) This section shall apply in the case of a cost-book company as
if the company were a partnership within the meaning of this Act.

PARTNERSHIP ACT 1890 - SECT 24
Rules as to interests and duties of partners subject to special
agreement.

24. The interests of partners in the partnership property and their
rights and duties in relation to the partnership shall be
determined, subject to any agreement express or implied between the
partners, by the following rules:

(1)All the partners are entitled to share equally in the capital
and profits of the business, and must contribute equally towards the
losses whether of capital or otherwise sustained by the firm.

(2)The firm must indemnify every partner in respect of payments made
and personal liabilities incurred by him

(a)In the ordinary and proper conduct of the business of the firm;
or,

(b)In or about anything necessarily done for the preservation of the
business or property of the firm.

(3)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 five per
cent. per annum from the date of the payment or advance.

(4)A partner is not entitled, before the ascertainment of profits,
to interest on the capital subscribed by him.

(5)Every partner may take part in the management of the partnership
business.

(6)No partner shall be entitled to remuneration for acting in the
partnership business.

(7)No person may be introduced as a partner without the consent of
all existing partners.

(8)Any difference arising as to ordinary matters connected with the
partnership business may be decided by a majority of the partners,
but no change may be made in the nature of the partnership
business without the consent of all existing partners.

(9)The partnership books are to be kept at the place of business
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.

PARTNERSHIP ACT 1890 - SECT 25
Expulsion of partner.

25. No majority of the partners can expel any partner unless a
power to do so has been conferred by express agreement between the
partners.

PARTNERSHIP ACT 1890 - SECT 26
Retirement from partnership at will.

26.(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.

PARTNERSHIP ACT 1890 - SECT 27
Where partnership for term is continued over, continuance on old
terms presumed.

27.(1) Where a partnership entered into for a fixed term is
continued after the term has expired, and without any express 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 settlement
or liquidation of the partnership affairs, is presumed to be a
continuance of the partnership.

PARTNERSHIP ACT 1890 - SECT 28
Duty of partners to render accounts, &c.

28. Partners are bound to render true accounts and full information
of all things affecting the partnership to any partner or his legal
representatives.

PARTNERSHIP ACT 1890 - SECT 29
Accountability of partners for private profits.

29.(1) 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 connexion.

(2) 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, either by
any surviving partner or by the representatives of the deceased
partner.

PARTNERSHIP ACT 1890 - SECT 30
Duty of partner not to compete with firm.

30. 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.

PARTNERSHIP ACT 1890 - SECT 31
Rights of assignee of share in partnership.

31.(1) An assignment by any partner of his share in the
partnership, either absolute or by way of mortgage or redeemable
charge, does not, as against the other partners, entitle the
assignee, during the continuance of the partnership, to interfere in
the management or administration of the partnership business or
affairs, or to require any accounts 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.

(2) In case of a dissolution of the partnership, whether as
respects all the partners or as respects the assigning partner, the
assignee 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.

Dissolution by expiration or notice.

PARTNERSHIP ACT 1890 - SECT 32

32. 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:

(b)If entered into for a single adventure or undertaking, by the
termination of that adventure or undertaking:

(c)If entered into for an undefined time by any partner giving
notice to the other or others of his intention to dissolve the
partnership.

In the last-mentioned 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.

PARTNERSHIP ACT 1890 - SECT 33
Dissolution by bankruptcy, death, or charge.

33.(1) Subject to any agreement between the partners, every
partnership 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
dissolved if any partner suffers his share of the partnership
property to be charged under this Act for his separate debt.

PARTNERSHIP ACT 1890 - SECT 34
Dissolution by illegality of partnership.

34. 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.

PARTNERSHIP ACT 1890 - SECT 35
Dissolution by the Court.

35. On application by a partner the Court may decree a dissolution
of the partnership in any of the following cases:

(a)When a partner is found lunatic by inquisition,... or is shown
to the satisfaction of the Court to be of permanently unsound mind,
in either of which cases the application 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)When a partner, other than the partner suing, becomes in any
other way permanently incapable of performing his part of the
partnership contract:

(c)When 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 calculated to prejudically affect the
carrying on of the business:

(d)When a partner, other than the partner suing, wilfully or
persistently commits a breach of the partnership agreement, or
otherwise so conducts himself in matters relating 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)When the business of the partnership can only be carried on at
a loss:

(f)Whenever in any case circumstances have arisen which, in the
opinion of the Court, render it just and equitable that the
partnership be dissolved.

PARTNERSHIP ACT 1890 - SECT 36
Rights of persons dealing with firm against apparent members of
firm.

36.(1) Where a person deals with a firm after a change in its
constitution 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 [Belfast Gazette] as to a firm
whose principal place of business is in Ireland, shall be notice as
to persons who had not dealings with the firm before the date of
the dissolution or change so advertised.

(3) 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
for partnership debts contracted after the date of the death,
bankruptcy, or retirement respectively.

PARTNERSHIP ACT 1890 - SECT 37
Right of partners to notify dissolution.

37. 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.

PARTNERSHIP ACT 1890 - SECT 38
Continuing authority of partners for purposes of winding up.

38. After the dissolution of a partnership the authority of each
partner 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 liability of any person who has after the bankruptcy represented
himself or knowingly suffered himself to be represented as a partner
of the bankrupt.

PARTNERSHIP ACT 1890 - SECT 39
Rights of partners as to application of partnership property.

39. 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
to the firm; and for that purpose any partner or his
representatives may on the termination of the partnership apply to
the Court to wind up the business and affairs of the firm.

PARTNERSHIP ACT 1890 - SECT 40
Apportionment of premium where partnership prematurely dissolved.

40. Where one partner has paid a premium to another on entering
into a partnership for a fixed term, and the partnership is
dissolved 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

(b)the partnership has been dissolved by an agreement containing no
provision for a return of any part of the premium.

PARTNERSHIP ACT 1890 - SECT 41
Rights where partnership dissolved for fraud or misrepresentation.

41. 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 liabilities, for
any sum of money paid by him for the purchase of a share in the
partnership and for any capital contributed by him, and is

(b)to stand in the place of the creditors of the firm for any
payments made by him in respect of the partnership liabilities, and

(c)to be indemnified by the person guilty of the fraud or making
the representation against all the debts and liabilities of the
firm.

PARTNERSHIP ACT 1890 - SECT 42
Right of outgoing partner in certain cases to share profits made
after dissolution.

42.(1) Where any member of a firm has died or otherwise ceased 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 representatives 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 five per cent. per annum on the amount
of his share of the partnership assets.

(2) Provided that where by the partnership contract an option is
given to surviving or continuing partners to purchase the interest
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.

PARTNERSHIP ACT 1890 - SECT 43
Retiring or deceased partner's share to be a debt.

43. 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.

PARTNERSHIP ACT 1890 - SECT 44
Rule for distribution of assets on final settlement of accounts.

44. 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 lastly, if
necessary, by the partners individually in the proportion in which
they were entitled to share profits:

(b)The assets of the firm including the sums, if any, contributed
by the partners to make up losses or deficiencies of capital, shall
be applied in the following manner and order:

1.In paying the debts and liabilities of the firm to persons who
are not partners therein:

2.In paying to each partner rateably what is due from the firm to
him for advances as distinguished from capital:

3.In paying to each partner rateably what is due from the firm to
him in respect of capital:

4.The ultimate residue, if any, shall be divided among the partners
in the proportion in which profits are divisible.

Definitions of "court" and "business."

PARTNERSHIP ACT 1890 - SECT 45

45. In this Act, unless the contrary intention appears,

The expression "court" includes every court and judge having
jurisdiction in the case:

The expression "business" includes every trade, occupation, or
profession.

PARTNERSHIP ACT 1890 - SECT 46
Saving for rules of equity and common law.

46. 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.

Ss.48, 49 rep. by SLR 1908

PARTNERSHIP ACT 1890 - SECT 50
Short title.

50. This Act may be cited as the Partnership Act, 1890.

Schedule rep. by SLR 1908