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. Formation 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 general partnership—dissolution otherwise than by the court and Ending a general 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

This Flowchart considers the conditions that need to be met and steps followed

A limited liability partnership (LLP) is a body corporate which is formed under the Limited Liability Partnerships Act 2000 (LLPA 2000). The majority of law applicable to LLPs is actually modified company law rather than partnership law (see Practice Note: The nature of a limited liability partnership and its legal framework). The requirements for incorporation are set out in the LLPA 2000 and the Companies Act 2006 (CA 2006), as modified by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, SI 2009/1804 (LLP (Application of CA 2006) Regs 2009) the Limited Liability Partnerships (Application of Company Law) Regulations 2024, SI 2024/234 and the Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025, SI 2025/1033. The process for incorporating an LLP is very similar to the procedure for company incorporation. How to incorporate an LLP There are three requirements for the incorporation of an LLP: • two or more persons associated for carrying on a lawful business with a view to profit must have subscribed their names to an incorporation document

This Flowchart considers the conditions that need to be met and steps followed

This Practice Note discusses the formation of a limited partnership under the Limited Partnerships Act 1907 (LPA 1907). It also covers, among other things, the requirements in relation to a limited partnership’s name, trading disclosures and accounts. With effect from 6 April 2017, LPA 1907 was amended by the Legislative Reform (Private Fund Limited Partnerships) Order 2017, SI 2017/514 (LRO). A draft of the LRO was first published in January 2017 by HM Treasury together with an accompanying explanatory document. The LRO was published further to a government consultation which commenced in July 2015 and concluded in October 2015 on proposed changes to UK limited partnership legislation to make such partnerships more effective vehicles for private equity and venture capital investments. These changes which were implemented by the LRO apply only to those limited partnerships which are designated as private fund limited partnerships (PFLPs). This Practice Note reflects therefore the provisions of LPA 1907 as amended by the LRO in respect of the inclusion of PFLPs in the English limited partnership regime. For

When forming a limited partnership in England under the Limited Partnerships Act 1907 (LPA 1907), consideration should be given as to whether the limited partnership will be designated as a private fund limited partnership (PFLP) or will not be designated as such a vehicle (non-PFLP). A PFLP is a type of limited partnership structure introduced into English law by the Legislative Reform (Private Fund Limited Partnerships) Order 2017, SI 2017/514 (LRO), aimed at making such partnerships more effective vehicles for private equity and venture capital investments. A limited partnership may only be a PFLP if it satisfies the following two conditions: • it is constituted by an agreement in writing—this should be easily satisfied as a limited partnership agreement is always put in place for private funds, and • it is a collective investment scheme for the purpose of section 235 of the Financial Services and Markets Act 2000 (FSMA 2000)—most private funds will be a collective investment scheme and even if such a fund has

View or print a full-size PDF versio

An agreement on the terms of a contract offer will only become a binding contract capable of being enforced if that offer has been accepted. This Practice Note considers what may amount to contractual acceptance, how it may be communicated and when it can be retracted. For guidance on understanding when an offer, capable of acceptance, has been made, see Practice Note: Forming enforceable contracts—offer. Note: Part 36 settlement offers made under CPR 36 operate outside the general rule of contract law and are governed by the specific regime set out in CPR 36. For guidance on accepting a CPR 36 offer, see Practice Note: Part 36 offers—how and when to accept a Part 36 offer. What do we mean by an acceptance of an offer? Acceptance is the final and unqualified expression of assent to the terms of a contract offer. Note: it is not possible to accept an offer which is no longer open for acceptance—for guidance, see Practice Note: Forming enforceable contracts—offer—How do you terminate an offer? The following will not

This Practice Note considers issues regarding an agent’s authority to contract on behalf of its principal and the related issue of which party to sue or which party can be sued where there is an agency scenario. For general guidance on the creation of an agency, see Practice Note: Nature and types of agency. Who is liable? Agent or principal—general position In Re Lendy, the judge summarised that with regard to agent and/or principal liability where an agent acts for their principal: • the general position is that the contract is that of the principal and only the principal can sue or be sued, but that this general position may be displaced if, having regard to the nature and terms of the contract and the surrounding circumstances, the intention of the parties is different • if the agent signs a contract as agent, they are deemed not to have contracted personally unless it is plain from other terms of the contract that the agent is to be bound by it, in which event, the agent

This Practice Note considers contracting authority under the law of England and Wales, which is an essential component of contract formation. It considers general principles of agency and contracting authority in the context of corporations generally, companies registered under the Companies Act 2006 (CA 2006), unregistered companies, overseas companies, limited liability partnerships, general partnerships, limited partnerships, unincorporated associations, incorporated charities (charitable companies and Charitable Incorporated Organisations) and unincorporated charities (charitable unincorporated associations and charitable trusts). Where an entity has separate legal status, it is possible to make a distinction between instruments executed by the entity itself (eg using its common seal where available) or on behalf of the entity (eg by a person acting under its authority). This Practice Note focuses on a person’s contracting authority where they are executing an instrument on behalf of the entity. It does not consider the various alternative methods of execution that may be available (eg using a common seal). For guidance on the separate issue of execution formalities and requirements and protections in respect of due execution, see the Practice Notes

In English law, there is a presumption that everyone has a capacity to contract. However, if you are a minor or you lack the necessary mental capacity or you are a drunken person, that presumption will generally be rebutted and the contract unenforceable. Capacity issues can also arise in relation to entities such, as for example, local authorities and their capacity to enter into certain kinds of transaction which may be confined by legislation. This Practice Note sets out the scope of the capacity doctrine. Capacity to contract—the general principle—presumption The law presumes that everyone has a capacity to contract. Any person seeking to rebut that presumption must strictly prove that they belong to one of three classes of individual: • a minor. For the purposes of the law of contract, a 'minor' is any person under 18 (section 1 of the Family Law Reform Act 1969) • a person lacking the requisite mental capacity • a drunken person In the case of mental incapacity, abnormal weakness of mind as prevents a person from understanding

The terms of an agreement may be so vague or uncertain as to be meaningless and therefore unenforceable. However, where parties have reached agreement, a court will strive to give that agreement meaning. This Practice Note sets out the nature of the certainty requirement and the ways in which courts have sought to limit its application. For guidance on the general approach when determining the existence of an enforceable contract and its terms, see Practice Note: Forming enforceable contracts—the court's general approach. Requirement of certainty—the basic principle A court will not enforce a contract to which no definite meaning can be given (G. Scammell & Nephew v Ouston). In Scammell, the House of Lords held that an agreement to acquire goods 'on hire-purchase' was too vague to be enforced because many kinds of hire-purchase existed on very different terms. As a result, it was impossible to ascertain on what terms the parties had agreed to contract. Parties must therefore take care to express the terms of their agreement in a way that is sufficiently