A Partnership, is the relation which subsists between persons carrying on a business in common with a view of profit.
Partnerships are the most common form of business relationships which are usually entered in to informally by individuals. It is very common for individuals to enter into a business partnership purely on a ‘gentleman’s agreement’. The problems only start when the business relationship becomes strained and when you get embroiled in a bitter disagreement with the other/s in the business.
Disputes within partnerships are often much easier to resolve if there is a written partnership agreement and if drafted well, will cover most eventualities. In the absence of an agreement, profits, losses and management control are automatically shared equally between the partners and individual partners can be personally liable for partnership debts.
More so, the departure of a partner – for example, as the result of a partnership dispute - may automatically dissolve the partnership with important legal and tax consequences. This will mean an end to the business, the sale of its assets, the payment of its creditors and any monies left distributed amongst the partners. This certainly is pretty disastrous for the continuation of the business, if desired.
More problematic are therefore the disputes involving partnerships without any written agreement – which are governed by the 1890 Partnership Act.
If you are in disagreement with your business partner/s and need immediate advice, you can call our committed commercial litigation team on – details can be found on our website; www.duncanlewis.com or call to speak to one of our experienced lawyers on 020 7 923 4020.