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Partnerships - Coggle Diagram

- - - - 24(1) partners entitled to share equally in profits and must share equally in losses
        24(6) not entitled to a salary
        24(8) decisions arising in the ordinary course of business are decided by a majority except for any change to the nature of the partnership which requires unanimity
        25 - partner cannot be expelled by majority vote unless previously agreed
        19 - partners' mutual rights and obligations can be varied at any time by unanimous consent
      - The partnership agreement
        
        PA 1980 provides fall-back framework
        S19 - partners' mutual rights and obligations
        can be varied at any time by unanimous consent,
        express or implied
        
        Name must not contain 'limited' 'ltd' or be offensive or name as a trademarked name, contain a sensitive word or suggest a connection to govt
        Place/nature of business should also be set out
        
        Commencement and duration
        Partnership will commence when s1(1) is satisfied but useful for agreement to set out a date that rights and obligations commence
        If partners work before this date, default PA provisions will apply
        S7 - if the agreement has a fixed term but partners continue after expiration without a new agreement, they are presumed to be partners on the same terms as before
        
        Expulsion/partner leaving
        S25 - cannot be expelled by majority vote unless all partners have prev expressly agreed to this strategy
        In absence of agreement, impossible to expel a partner unless they agree to it themselves
        Partners sound agree expulsion provisions in PA
        
        Property
        Each partner deemed to own a share in property
        belonging to the partnership
        Sensible for agreement as to which assets are partnership property
        S20 - all property brought into the partnership on account of the firm or for the purposes/in the course of business, is partnership property
        S21 - all property bought with partnership money is deemed to be the above
        
        Work input/roles/limits on authority
        S24(5) - every partner may take part in the management of the partnership but are not required to do so
        PA should set out requirements for each partner
        
        Drawings/salary
        S24(1) - partners entitled to share equally in capital and profits and contribute equally towards losses
        PA should also set out how much each partner may draw from income profits as a salary and if this is on top of profit share
        S24(5) - without an agreement, partners not entitled to salary
        
        Decision making
        S24 - decisions arising during the ordinary course of business are decided by a majority (except for S24(8) - changes to the business, S24(7) introducing a new partner or S19 - varying the rights/duties of partners)
        PA should deal with decision making/management
        
        Incoming partners
        S24 - no new person may be introduced without consent of all existing partners
        S24(7) - unanimous consent is required
        Still advisable to include express clause in PA
        
        Non-compete/restrictions
        S30 - duty not to compete with the firm
        If partner, without consent, carries on any business of the same nature and competing with that of the firm, they must account to the firm for all profits made
        No default clauses for restrictions on outgoing partners but these can be provided for in PA
- - - - However, firm will not be bound if the third party
        knew that the partner was not authorised to enter
        into the contract or the third party did not know or
        believe they were a partner