Partnership Act 1963

This Act is the Partnership Act 1963.

The dictionary at the end of this Act is part of this Act.

Note 1 The dictionary at the end of this Act defines certain terms used in this Act, and includes references (signpost definitions) to other terms defined elsewhere in this Act.

For example, the signpost definition ‘incorporated limited partnership—see section 51.’ means that the term ‘incorporated limited partnership’ is defined in that section.

Note 2 A definition in the dictionary (including a signpost definition) applies to the entire Act unless the definition, or another provision of the Act, provides otherwise or the contrary intention otherwise appears (see Legislation Act, s 155 and s 156 (1)).

A note included in this Act is explanatory and is not part of this Act.

Note See Legislation Act, s 127 (1), (4) and (5) for the legal status of notes.

Other legislation applies in relation to offences against this Act.

Note 1 Criminal Code

The Criminal Code, ch 2 applies to all offences against this Act (see Code, pt 2.1).

The chapter sets out the general principles of criminal responsibility (including burdens of proof and general defences), and defines terms used for offences to which the Code applies (eg conduct, intention, recklessness and strict liability).

Note 2 Penalty units

The Legislation Act, s 133 deals with the meaning of offence penalties that are expressed in penalty units.

The rules of equity and the common law applying to partnership continue in force except as far as they are inconsistent with this Act.

However, except as provided (expressly or by necessary implication) under this or another Act, the law relating to partnership does not apply in relation to an incorporated limited partnership, the partners in an incorporated limited partnership or the relationship between an incorporated limited partnership and its partners.

Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).

Part 2 Nature of partnership

Partnership is the relation between people carrying on a business in common with a view of profit, and includes an incorporated limited partnership.

Note Partnership includes an external partnership in some stated provisions in part 6 (Incorporated limited partnerships).

The relation between members of a corporation (other than an incorporated limited partnership), whether formed or incorporated in or outside the ACT, is not a partnership under this Act.

In determining whether a partnership does or does not exist, regard shall be had to subsections (2) to (4).

Joint tenancy, tenancy in common, joint property or part ownership does not, of itself, create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use of the thing so held or owned.

The sharing of gross returns does not, of itself, create a partnership, whether the persons sharing the returns have or have not a joint or common right or interest in any property from which, or from the use of which, the returns are derived.

The receipt by a person of a share of the profits of a business is evidence that the person is a partner with respect to the business, but the receipt of such a share, or of a payment contingent on, or varying with, the profits of a business, does not, of itself, make the person a partner with respect to the business and, in particular—

the receipt by a person of a debt or other liquidated demand by instalments or otherwise out of the accruing profits of a business does not, of itself, make the person a partner with respect to the business or liable as a partner with respect to the business; and

a contract for the remuneration of an employee or agent of a person engaged in a business by a share of the profits of the business does not, of itself, make the employee or agent a partner in relation to the business or liable as a partner in relation to the business; and

a domestic partner or child of a deceased partner who receives, by way of periodical payment, a part of the profits made in a business is not, only because the domestic partner or child receives part of the profits, a partner in relation to the business or liable as a partner in relation to the business; and

the lending of money to a person engaged or about to engage in a business under a contract, made in writing with that person and signed by or on behalf of all the parties to the contract, by virtue of which the lender is entitled to receive a rate of interest varying with, or a share of, the profits arising from carrying on the business, does not, of itself, make the lender a partner with the person carrying on the business or liable as a partner with that person; and

a person who receives by way of periodical payment a portion of the profits of a business in consideration of the sale by the person of the goodwill of the business is not, by reason only of the receipt of that portion, a partner with respect to the business or liable as a partner with respect to the business.

This section does not apply in relation to an incorporated limited partnership.

Part 3 Relations of partners to persons dealing with them

A partner in a firm other than an incorporated limited partnership is the agent of the firm, and of the other partners in the firm, for the purposes of the firm’s business.

An act done by a partner in a firm other than an incorporated limited partnership, for carrying on in the usual way business of the kind carried on by the firm, binds the firm and the other partners in the firm unless—

the partner who does the act has in fact no authority to act for the firm in the particular matter; and

the person with whom the partner is dealing either knows that the partner has no authority or does not know or believe the partner to be a partner in the firm.

A general partner in an incorporated limited partnership is the agent of the partnership, and of the other general partners in the partnership, for the purposes of the partnership’s business.

An act done by a general partner in an incorporated limited partnership, for carrying on in the usual way business of the kind carried on by the partnership, binds the partnership and the other general partners in the partnership unless—

the general partner who does the act has in fact no authority to act for the partnership in the particular matter; and

the person with whom the general partner is dealing either knows that the general partner has no authority or does not know or believe the general partner to be a general partner in the partnership.

An act or instrument relating to the business of a firm other than an incorporated limited partnership is binding on the firm and all the partners in the firm if it is done or executed by a person authorised to do the act or execute the instrument (whether or not a partner in the firm)—

in the firm name; or

in any other way showing an intention to bind the firm.

An act or instrument relating to the business of an incorporated limited partnership is (subject to section 13 (5) (Liability of partner)) binding on the partnership and all the general partners in the partnership if it is done or executed by a person authorised to do the act or execute the instrument (whether or not a general partner in the partnership)—

in the firm name; or

in any other way showing an intention to bind the partnership.

This section does not affect a rule of law about the execution of deeds or negotiable instruments.

If a partner in a firm other than an incorporated limited partnership pledges the credit of the firm for a purpose apparently not connected with the ordinary course of the firm’s business, the firm is not bound unless the partner is in fact specially authorised by the other partners in the firm.

Subsection (1) does not affect a personal liability incurred by an individual partner.

If a general partner in an incorporated limited partnership pledges the credit of the partnership for a purpose apparently not connected with the ordinary course of the partnership’s business, the partnership is not bound unless the general partner is in fact specially authorised by the partnership.

Subsection (3) does not affect a personal liability incurred by an individual general partner.

If it has been agreed by the partners in a firm other than an incorporated limited partnership that restrictions are to be placed on the power of 1 or more of the partners to bind the firm, an act contravening the agreement is not binding on the firm in relation to a person with notice of the agreement.

If it has been agreed by the partners in an incorporated limited partnership that restrictions are to be placed on the power (if any) of 1 or more of the partners to bind the partnership, an act contravening the agreement is not binding on the partnership in relation to a person with notice of the agreement.

Each partner in a firm other than an incorporated limited partnership is liable jointly with the other partners in the firm for the debts and obligations of the firm incurred while the partner is a partner.

If the partner is an individual, after the partner’s death the dead partner’s estate is severally liable in the due course of administration for the debts and obligations of the firm incurred while the dead partner was a partner that remain unsatisfied, but subject to the earlier payment of the dead partner’s separate debts.

Each general partner in an incorporated limited partnership is liable jointly with the incorporated limited partnership for the debts and obligations of the partnership incurred while the general partner is a general partner.

If the general partner is an individual, after the general partner’s death the dead partner’s estate is severally liable in the due course of administration for the debts and obligations of the partnership incurred while the dead partner was a partner that remain unsatisfied, but subject to the earlier payment of the dead partner’s separate debts.

However, a general partner in an incorporated limited partnership is only liable for the debts and obligations of the partnership—

to the extent the partnership cannot satisfy the debts and obligations; or

to a greater extent provided by the partnership agreement.