Solicitors: partnership law, agreements and partnerships: Humphreys & Co.

Solicitors here advise on partnership law and supply agreements and other documentation for partnerships. The Partnership Act 1890 defined partnership as "the relation which subsists between persons carrying on a business in common with a view to profit". Excluded from this definition is any company registered under the Companies Act, as these bodies have their own set of statutory rules. Persons who have entered into partnership with each other are collectively called a "firm".

There must be at least two people involved in a partnership (although not necessarily natural people as companies can be partners with natural people or with other companies). Also some element of agreement is involved. The agreement does not have to be in writing, however; indeed, it need not be verbal at all - it can be implied from conduct in the absence of any express agreements.

If there is any dispute about the existence of a partnership, it will be for those alleging that the partnership exists to prove that it does, and it may well be that the date stated in the written partnership agreement (if there is one) is the best available evidence.

The persons concerned in a partnership must be carrying on business "in common" and "with a view to profit". Thus, associations of persons formed for a non-profitmaking purpose cannot in law amount to partnerships. This rule affects associations formed for charitable purposes but is also important for members' clubs, which are often formed with the intention of covering their expenses but not of making a profit.

Establishing a partnership (or firm) is an attractive option for two or more people wishing to enter business together without starting up a new company. By comparison with other methods of arranging a business, a firm can begin trading very quickly, with fewer formalities and all partners working on a self-employed basis. The prudent course is to put in place a written partnership agreement when starting up a new firm. This allows the structure of the business relationship to be clearly determined, meaning that in the long term, things will run more smoothly.


	We are able to assist you in addressing issues such as: � the level of personal investment to be required from each partner; � the allocation of profits and losses between partners; � the procedure for making decisions at the firm and resolving disputes; � the procedure for admitting and removing partners; and � the procedure for dissolving the partnership.

It is important to bear in mind that a traditional partnership does not have a distinct legal identity. Instead, all partners must jointly bear the liability for debts the business incurs. This means that if you enter into a traditional partnership, your personal assets could be at risk for any unpaid debts incurred by you or your partners in the course of business.

A similar vehicle that for consideration, and which our lawyers are able to assist you in setting up, is a Limited Liability Partnership (LLP). This option is very similar to that of a traditional partnership and offers much of the same organisational flexibility, still with fewer formalities than a limited company will encounter. However, an LLP will have to deal with more paperwork than a traditional partnership. The application to register the LLP must be submitted to and approved by Companies House. As the name suggests, the LLP offers an important advantage, in that liability is borne by the LLP. The partners� personal assets are therefore only at risk to the extent that they have been invested into, or guaranteed to the LLP.

Our lawyers are available to guide you through every stage of the LLP registration process and can assist you in complying with the obligations that are legally imposed upon your LLP as the relationship subsists.

Partnership law