business partnership

What is the Advantage of a Partnership Agreement?

Cressida Johns Business Advice

Full article with thanks to: The principal law governing partnerships is set out in the Partnership Act 1890 (the “Act”) which defines a partnership as “the relation which exists between persons carrying on a business in common with a view to profit” (section 1 of the Act). The question of whether a partnership exists or not is therefore a matter of fact (not necessarily agreement). It is therefore not something that the parties can simply determine for themselves. While the relationship can be governed by a written partnership agreement, the essence of a partnership is the continuing relationship between two or more individuals, personal as well as commercial, with the contractual partnership agreement being only an indication of the relationship. The reason why it is important to have a written partnership agreement is that where there is no written agreement, the provisions set out in the Act (which is …