ABSTRACT
Partnership is the ‘relation which subsists between persons carrying on a business in common with a view of profit’ (Partnership Act 1890, s 1). The partners comprise what is known as the firm and, to a greater or lesser degree, each will provide capital for the business and share in the profits generated. Partnership is a relationship formed in contract even if the partners do not expressly agree terms; the Partnership Act 1890 and the common law will set any necessary terms in the absence of express agreement. Subject to agreement between the partners to the contrary, the Partnership Act 1890 provides that all profits and losses are shared equally between the partners; they do not receive interest on their capital and are not to be remunerated for acting on partnership business. Further, if any partner advances or lends money to the partnership in excess of his agreed capital contribution, interest will accrue on the advance or loan at 5% a year (Partnership Act 1890, s 24(3)). Although partners will share revenue and capital profits equally in the absence of any contrary agreement, unequal capital contributions do not alone imply that partners will share capital profits and losses in unequal shares.
