Partnership Act 1891

This Act may be cited as the Partnership

Act 1891.

In this Act—

business includes any trade, occupation or profession;

Commission means the Corporate Affairs

Commission;

Court means the Supreme Court of South

Australia;

domestic partner means a person who is a domestic partner within the meaning of the Family Relationships Act 1975, whether declared as such under that Act or not;

external partnership means a partnership (or legal entity however described in the nature of a partnership) formed in accordance with a law of another State, a Territory or another country or jurisdiction, whether or not under that law the liability of any partner for the liabilities of the partnership (or entity) is limited and whether or not under that law the partnership (or entity) is incorporated or is otherwise a separate legal entity;

firm-name of—

an incorporated limited partnership—means the name of the partnership recorded in the Register; and

of an external partnership—means the name under which, in accordance with the law of the place in which it is formed, the partnership carries on the business of the partnership;

general partner—

in a limited partnership—means a partner in the limited partnership who is not a limited partner; and

in an incorporated limited partnership—means a person or partnership (including an external partnership) admitted as a partner in the incorporated limited partnership in accordance with the partnership agreement and who is not a limited partner;

incorporated limited partnership means an incorporated limited partnership formed in accordance with section 48(2);

liability includes any debt, obligation or liability of any kind, wherever and however incurred;

limited partner—

in a limited partnership—means a partner in the limited partnership whose liability for the liabilities of the partnership is limited in accordance with Part 3; and

in an incorporated limited partnership—means a person or partnership (including an external partnership) admitted and designated as a limited partner in the incorporated limited partnership in accordance with the partnership agreement;

limited partnership means a limited partnership formed in accordance with section 48(1);

partner in a limited partnership or incorporated limited partnership means a general partner or a limited partner;

Register means the Register of Limited

Partnerships and Incorporated Limited Partnerships kept under

Part

3;

registered particulars means particulars recorded in the Register;

spouse—a person is the spouse of another if they are legally married.

In this Act, a reference, in relation to an incorporated limited partnership, to the partnership or the firm is a reference to the incorporated limited partnership as a separate legal entity and not to the partners in that partnership.

Except so far as they are inconsistent with the express provisions of this Act, the rules of equity and common law relating to partnership will continue in force.

However, except as provided (whether expressly or by necessary implication) by this Act or any other enactment, the law relating to partnership does not apply to or in respect of an incorporated limited partnership, the partners in an incorporated limited partnership or to the relationship between an incorporated limited partnership and its partners.

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

But the relation between members of any company or association which is—

incorporated under the Corporations

Law; or

formed or incorporated by or in pursuance of any other Act of

Parliament, or letters patent, or Royal Charter:

is not a partnership within the meaning of this

Act.

In determining whether a partnership does or does not exist, regard must be had to the following rules:

joint tenancy, tenancy in common, joint property, common 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 property so held;

the sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or do not have 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

prima facie evidence that the person is a partner in 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 in the business; and, in particular—

the receipt by a person of a debt or other liquidated amount, by instalments or otherwise, out of the accruing profits of a business, does not of itself make the person a partner in the business or liable as such;

a contract for the remuneration of a servant or agent of a person engaged in a business, by a share of the profits of the business, does not of itself make the servant or agent a partner in the business or liable as such;

a person being the spouse, domestic partner or child of a deceased partner, and receiving by way of annuity a portion of the profits made in the business in which the deceased person was a partner, is not by reason only of such receipt a partner in the business or liable as such;

the advance of money by way of loan to a person engaged or about to engage in any business, on a contract with that person that the lender will receive a rate of interest varying with the profits, or will receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person or persons carrying on the business or liable as such if the contract is in writing and is signed by or on behalf of all the parties to the contract;

a person receiving, by way of annuity or otherwise, 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 such receipt a partner in the business or liable as such.

This section does not apply to or in respect of an incorporated limited partnership.

In the event of any person to whom money has been advanced by way of loan under a contract of a type mentioned in section 2, or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudicated insolvent or taking the benefit of any Act for the relief of insolvent debtors, or entering into an arrangement to pay the person's creditors less than one hundred cents in the dollar, or dying in insolvent circumstances, the lender of the loan is not entitled to recover anything in respect of the loan, and the seller of the goodwill is not entitled to recover anything in respect of the share of profits contracted for, until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money's worth have been satisfied.

Persons who have entered into partnership other than an incorporated limited partnership with one another are, for the purposes of this

Act, called collectively a firm, and the name under which their business is carried on is called the firm-name.

[Note: NoteOn the meaning of firm and

firm-name in relation to an incorporated limited partnership, see section 1B.]

Every partner in a partnership other than a firm that is a limited partnership or incorporated limited partnership is an agent of the firm and of the other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which the partner is a member bind the firm and the other partners, unless the partner so acting 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.

Every general partner in a limited partnership or incorporated limited partnership is an agent of the firm and of the other general partners for the purpose of the business of the partnership, and the acts of every general partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which the partner is a member, binds the firm and the other general partners, unless—

the general partner so acting has in fact no authority to act for the firm 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.

An act or instrument relating to the business of a firm other than an incorporated limited partnership and done or executed in the firm-name, or in any other manner showing an intention to bind the firm, by any person authorised, whether a partner or not, is binding on the firm and all the partners.

An act or instrument relating to the business of a firm that is an incorporated limited partnership, and done or executed in the firm-name, or in any other manner, showing an intention to bind the firm by any person authorised to bind the firm, whether a general partner or not, is (subject to section 9(3)) binding on the firm and all the general partners.

This section does not affect any general rule of law relating to the execution of deeds or negotiable instruments.

Where one partner pledges the credit of a firm other than a firm that is an incorporated limited partnership for a purpose apparently not connected with the firm's ordinary course of business, the firm is not bound, unless the partner is in fact specially authorised by the other partners; but this section does not affect any personal liability incurred by an individual partner.

Where one general partner pledges the credit of a firm that is an incorporated limited partnership for a purpose apparently not connected with the firm's ordinary course of business, the firm is not bound unless the general partner is in fact specially authorised by the firm, but this section does not affect any personal liability incurred by an individual general partner.

If it has been agreed between the partners that any restriction will be placed on the power of any one or more of them to bind a firm other than a firm that is an incorporated limited partnership, no act done in contravention of the agreement is binding on the firm with respect to persons having notice of the agreement.

If it has been agreed by the partners in an incorporated limited partnership that any restrictions are to be placed on the power (if any) of any one or more of them to bind the firm, no act done in contravention of the agreement is binding on the firm with respect to persons having notice of the agreement.

Every partner in a firm other than an incorporated limited partnership is liable jointly with the other partners for all debts and obligations of the firm incurred while the partner is a partner; and (if the partner is an individual) after the partner's death the partner's estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied, but subject to the prior payment of the partner's separate debts.

Every general partner in an incorporated limited partnership is liable jointly with the incorporated limited partnership for all debts and obligations of the partnership incurred while the general partner is a general partner; and (if the general partner is an individual) after the general partner's death the general partner's estate is also severally liable in a due course of administration for such debts or obligations so far as they remain unsatisfied but subject to the prior payment of the partner's separate debts.

Despite subsection (2), a general partner in an incorporated limited partnership is only liable for any debts or obligations of the incorporated limited partnership—

to the extent the incorporated limited partnership is unable to satisfy the debts and obligations; or

to a greater extent provided by the partnership agreement.