General partnership agreements

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • General partnership agreements
  • Default provisions
  • Common provisions in a partnership agreement
  • Parties
  • Partnership name
  • Nature and location of the partnership’s business
  • Commencement and duration
  • Capital
  • Partnership property
  • Profits and losses
  • More...

General partnership agreements

It will almost always be advisable for partners to enter into a partnership agreement in order to avoid application of any inappropriate default provisions in the Partnership Act 1890 (PA 1890) or to supplement the statutory provisions where they are insufficient.

Variation of the statutory rights and duties by the consent of all the partners is expressly envisaged in the PA 1890.

For an overview on the formation of a general partnership, see flowchart: Forming a general partnership—flowchart

Default provisions

There are key default provisions that will apply to the operation of a partnership in the absence of any specific agreement to the contrary:

  1. all partners are to share equally in the capital and profits and contribute equally to losses

  2. the partnership must indemnify any partner for payments and liabilities incurred in the ordinary and proper conduct of the partnership’s business

  3. every partner may take part in the management of the partnership business

  4. no partner is entitled to any remuneration for acting in the partnership business

  5. no person may be introduced as a partner without the consent of all existing partners

  6. any differences as to ordinary matters connected with the partnership business may be decided by majority vote but a change in the nature of the business requires unanimous consent

  7. no majority of the partners can expel any partner unless a power has been conferred by

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