The nature of a general partnership and its legal framework
The nature of a general partnership and its legal framework

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

  • The nature of a general partnership and its legal framework
  • Sources of partnership law
  • Definition of partnership
  • Determining who is a partner
  • Partners and employee/worker status
  • Holding out
  • A partner’s share
  • A partner’s authority
  • A partner’s liability
  • Relationship between partners
  • more

Sources of partnership law

The main body of law governing a general partnership formed under English law (as opposed to a limited liability partnership, limited partnership or a partnership incorporated under Scottish law) is the Partnership Act 1890 (PA 1890), which has survived largely intact for over a hundred years. However, it is not a complete code of partnership law and expressly preserves the rules of equity and common law applicable to partnerships, except where they are inconsistent with the express provisions of the PA 1890.

There will often be a written agreement between the partners setting out the rights and duties of the partners between themselves although this is not obligatory (see Practice Note: General partnership agreements). The PA 1890 sets out a number of provisions that will apply if no specific agreement is entered into. These default provisions, or any provision in a written agreement, may be varied by the consent of all the partners and such consent may be either express or inferred from a course of dealing.

Other legislation affecting partnerships includes the Companies Act 2006, which regulates partnership names and trading disclosures (see Practice Note: Forming a general partnership and continuing obligations), and the Insolvency Act 1986 which is applied to partnerships with modifications set out in the Insolvent Partnerships Order 1994, SI 1994/2421.