ABSTRACT
This chapter will take you through the concept of partnerships as a type of business structure, the forms that partnerships can take and the importance of the partnership agreement. It is central to note that a partnership has no separate legal personality, other than its members. Therefore, if company A were to sue company B (a partnership), company A would sue the individual partners of company B, rather than the company in its own right. Partnerships are similar to sole traders in the sense that they will be responsible for any debts that the business runs up, and partners will be liable for debts of the business. The role of the partners is particularly important, and for some companies which specialise in a particular business type, the partners would be expected to be experts within their fi elds, such as a partnership of doctors or solicitors. The relationships between the partners will be key and can lead to potentially complex scenarios, such as if one partnership buys another. Or, if a partner in company A is also a partner in company B, and there is the potential for the companies to compete for business. Even if there is not the potential to compete, being on the board of both companies can bring about its own diffi culties. Similarly, the relationship between partners and outside bodies is important. For example, if Clare signs a contract with ABC stationery suppliers to be the sole supplier of stationery to the partnership, this would effectively bind the other partners to the contract and they would need to abide by its terms. This chapter will also consider how partnerships can end. Most end amicably, but a partnership may also end if a court decrees that is should be dissolved. This could be due to capability, a breach of contract, or the business being undertaken at a loss. Usually such matters would be set out in the partnership agreement, and this would enable to dissolution to take place in a measured and planned manner.
