PARTNERSHIP LAW

PARTNERSHIP LAW

Definition :- 3(1) PA 1961- partnership is the relation which subsists between persons carrying on business in common with a view of profit.

Partnership must be registered under the Registration of Business Act 1956. However, it must be noted that even if the partnership is not registered, it does not automatically follow that there is no partnership.

3(2) Co-operative societies and companies excluded

Partnership can exist without registration.

Gulazam v Noorzaman- [1957] 23 MLJ 45-

business not registered - CT held: partnership existed.

Ratna Ammal v Tan Chow Soo-[1964] 30 MLJ 399 –

the word partnership was not used in the agreement- used the word syndicate- Ct held- partnership existed.

Chooi Siew Cheong v Lucky Height Development S/B- joint venture- not a partnership.

RELATIONS BETWEEN PARTNERS AND PARTIES

Section 7- one partner binds the rest of the partners.

Chan King Yue-v Lee & Wong [1962] MLJ 379-

Plaintiffs husband borrowed money from her to settle debts- the other partner denied liability- Ct held- partnership liable.

Sect 8- Partners bound by acts on behalf of firm.

Sect 9 – partner using money from firm for private purpose- firm not bound.

Sect –10- if 3rd party has notice of restriction -firm not bound.

Mercantile Credit Co v Garrod- partner sold car without authority-firm was liable.

LIABILITY OF PARTNERS

Contractual liability- firm bound- MK Varma v K.M Oli Mohamed p 425

Sect 12- liability of firm for wrongs- firm bound-
(1) must be in the ordinary course of business
(2) with the authority of his co-partners

Section 13- misuse of money- firm bound

CRIMINAL LIABILTY

Chung Shin Kian v PP

Although all partners are jointly liable in civil cases, they are not jointly liable in criminal cases.
Duration of liability.

Sect 19(1) (2) (3) not liable for debts of firm before joining the firm unless he agrees

Sect 16(1) Liability of persons holding out.

William Jacks & Co v Chan & Yong Trading Co-

liable – opened a bank account in the firms name- liable

Liability of retired partners-
Re Siew Inn Steamship Co-The retired partner was liable. Actual notice must be given.

RELATIONS OF PARTNERS TO ONE ANOTHER

Clifford v Timms – Guilty of professional misconduct