The following Corporate guidance note provides comprehensive and up to date legal information covering:
This Practice Note discusses the conditions that need to be satisfied to form a general partnership under the Partnership Act 1890 (PA 1890). It also discusses the statutory restrictions relating to the partnership’s name, trading disclosures that partnerships must make and the obligation to produce and keep partnership accounts.
In order to form a partnership, it is not necessary to file any documents, to register any information anywhere or to complete any other formalities. Two people may form a partnership by simply starting to carry on a business together and sharing the profits, subject to fulfilling the requirements of the definition described below. For an overview of the formation of a partnership, see flowchart: Forming a general partnership—flowchart.
As regards the ways in which a partnership may be terminated, see Practice Notes: Ending a partnership—dissolution otherwise than by the court and Ending a partnership—dissolution by the court.
‘Partnership’ is defined in the PA 1890 as ‘the relation which subsists between persons carrying on a business in common with a view of profit’.
Considering each element of the statutory definition:
A partnership is a relationship between the partners based on contract: it is a precondition to the existence of a partnership that there is a binding contractual relationship between the partners (even if they may be unaware of it). The law will determine
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