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A partnership is a relationship which exists between persons carrying on a business with a view to profit. The following organisations usually operate by way of traditional partnerships:
We advise partners and partnerships on all aspects of a partnership life-cycle: upon commencement, advising on and drafting a business partnership agreement, the introduction and retirement of partners, sale and purchase of businesses, partnership mergers, incorporation (whether to LLP or a limited company) and dissolution of partnerships.
It has no separate legal personality. This means the partnership cannot own assets or property, grant security or contract with third parties in its own right.
Each partner is an agent of the firm for the purposes of the partnership business. The firm is therefore liable as the principal for agreements entered into by each partner in the course of the partnership business.
Whether partners are jointly, jointly and severally, or severally liable for each other’s acts will depend on the acts in question.
Partnerships are treated as transparent for most tax purposes meaning that the activities of the partnership are treated as carried on by individual partners and not by the partnership as a body. As such, it is the individual partners who are liable to pay tax on their share of the profits or losses.
Partnership property is property brought into the partnership for the purposes and in the course of the partnership business. As a partnership cannot own property in its own right, individual partners will own property on behalf of the partnership. It is important to set out clearly what property is owned by individual partners on behalf of the partnership and what property belongs to individual partners personally. This will be important on the insolvency of the partnership and/or the bankruptcy of individual partners.
Partners owe fiduciary duties to each other including a duty to act in the utmost good faith and honestly towards each other, and not to put themselves into a position where their duty to the firm and their own interests conflict. Additionally, a partner must account for all profits made by him from carrying on any business of the same nature as and competing with that of the firm, without the consent of the partners.
Although it is not a mandatory requirement, we advise that a partnership agreement is entered into between the partners otherwise default provisions may apply. Set out below are a number of areas which we recommend are dealt with when creating a partnership agreement:
We provide practical, commercial and coherent legal advice to achieve the best outcomes for our clients. As an all services law firm, we are able to deliver a complete service with support from our Employment, Commercial, Dispute Resolution and Private Client teams.
We work closely with our clients to ensure that we provide a bespoke service to meet their expectations both in terms of their objectives and in relation to costs. We understand that cost is one of the most important factors when it comes to the decision to take legal action.
As standard practice, we always give our clients an estimate of the costs involved in undertaking any piece of work from the outset. We can then provide costs updates on a regular basis.
In addition, where appropriate, we are happy to discuss other pricing models (for example, fixed fees and retainer arrangements) if that is helpful to you.
Home-grown or recruited from national, regional or City firms. Our specialists are experts in their fields and respected by their peers.
Mohammed Akeel Latif
Akeel is a Partner and Head of the Corporate Commercial department at Myerson
Scott is a Partner in our Corporate and Commercial department
Carla is a Partner in our Corporate Commercial department
Laura is an Associate in our Corporate Commercial department
Terry is a Senior Associate in our Corporate Commercial department
Joanna is a Solicitor in our Corporate Commercial department.